What is the cap rate in San Diego, CA?

The median cap rate in San Diego, CA is 2.3%. This is based on HUD Fair Market Rents and current home values.

Is San Diego a good place to buy rental property?

San Diego has a cap rate of 2.3% and estimated cash flow of -$3,483/month. Cash flow is challenging at current prices. Median home price is $1,015,405 with average 3BR rent of $4,110/month.

What is the average rent in San Diego, CA?

The HUD Fair Market Rent for a 3-bedroom in San Diego, CA is $4,110/month. This represents the estimated rent for standard-quality housing in the area.

San Diego, CA — Rental Investment Analysis

🔴WEAK— appreciation play only

Data: HUD FMR FY2024 + Zillow ZHVI April 2026 + Freddie Mac rates. Last updated June 2026.

Investment Summary

As of 2026, San Diego, CA has a 2.3% cap rate, indicating limited cash flow potential at current prices of $1,015,405 median.

San Diego is primarily an appreciation play with limited cash flow potential. At $1,015,405 median home price, San Diego requires significant capital. A 20% down payment alone is $203,081. With 3-bedroom rents around $4,110/month, the 2.3% cap rate tells the story. Cash flow is deeply negative at -$3,483/month with standard assumptions. This market requires appreciation to justify the investment.

At 0.40% on the 1% rule, rents are low relative to purchase prices. You'd need a significant discount from asking price to make the numbers work. DSCR of 0.35 is below 1.0, meaning rental income doesn't cover the mortgage. DSCR lenders will likely decline this market at current prices.

Bottom line: At current valuations, San Diego doesn't make sense for rental investors focused on returns. Look at lower-cost markets unless you have specific local knowledge.

Data sources: HUD Fair Market Rents (FY2024), Zillow Home Value Index (April 2026), Freddie Mac Primary Mortgage Market Survey.

Cap Rate

2.3%

Below average

Monthly Cash Flow

-$3,483

After all expenses

Price-to-Rent

20.7

Overpriced for rent

DSCR

0.35

Fails

Key Metrics

Median Home Price: $1,015,405
Average Rent (3BR): $4,110/mo
Price-to-Rent Ratio: 20.7(high)
1% Rule: 0.40%(fails — need 1%+)
Cash-on-Cash Return: -17.9%
Vacancy Rate: 8.0%

Market Strength

Unemployment Rate: 5.3%(+1% vs national)
Rent Growth (YoY): +2.9%(national avg)
Population Growth: -1.2% YoY

Assumptions Used

20% down, 6.52% rate, 30yr, 8% vacancy, 10% maintenance

Customize these numbers →

Property Tax Rate

0.71%

of assessed value (CA avg)

Median Income

$84,097

household (CA avg)

Rent-to-Income

58.6%

Stretched

Section 8 Max Rent

$4,110/mo

3BR voucher payment

CA Investor Climate

Landlord Friendly

3/10

State Income Tax

Has state tax

Property Tax

0.71% effective

Population Trend

-1.2% (3yr)

Population Movement (Tax Year 2021→2022)

Net Migration

-4,947 households

SHRINKING

Total Inflow

1,395,572

households moved in

Avg Income (New Residents)

$115,923

per household

Where they're coming from:

1.San Diego Non-migrants, CA1,343,640 households · avg $116,194

2.Los Angeles, CA6,638 households · avg $134,443

3.Riverside, CA4,956 households · avg $74,120

4.Orange, CA3,940 households · avg $103,502

5.Santa Clara, CA1,755 households · avg $231,103

Where residents are leaving to:

1.San Diego Non-migrants, CA1,343,640 households

2.Riverside, CA7,496 households

3.Los Angeles, CA5,199 households

4.Orange, CA3,305 households

5.Maricopa, AZ2,519 households

Net outflow may indicate weakening demand — but can mean lower prices and higher cap rates.

Best Zip Codes in San Diego for Investors

92108

Cap Rate: 7.0%Cash Flow: +$292/mo$605,179

92101

Cap Rate: 5.6%Cash Flow: -$469/mo$734,029

92139

Cap Rate: 3.2%Cash Flow: -$1,986/mo$738,888

All Zip Codes in San Diego

Zip	Cap Rate	Cash Flow	Home Price	Rent (3BR)	DSCR
92108	7.0%	+$292	$605,179	$5,330/mo	1.09
92101	5.6%	-$469	$734,029	$5,460/mo	0.88
92139	3.2%	-$1,986	$738,888	$3,650/mo	0.49
92123	3.0%	-$2,717	$970,208	$4,660/mo	0.47
92124	3.0%	-$3,031	$1,080,016	$5,180/mo	0.47
92154	3.0%	-$2,079	$741,656	$3,560/mo	0.47
92128	2.9%	-$2,940	$1,015,405	$4,760/mo	0.46
92126	2.7%	-$3,069	$1,006,658	$4,530/mo	0.43
92122	2.7%	-$3,404	$1,102,514	$4,910/mo	0.42
92102	2.5%	-$2,374	$742,869	$3,210/mo	0.40
92113	2.5%	-$2,104	$656,594	$2,830/mo	0.40
92114	2.5%	-$2,396	$746,124	$3,210/mo	0.40
92105	2.5%	-$2,273	$693,872	$2,930/mo	0.38
92173	2.3%	-$2,362	$693,600	$2,820/mo	0.36
92121	2.3%	-$3,805	$1,114,542	$4,520/mo	0.36
92120	2.3%	-$3,610	$1,055,272	$4,270/mo	0.36
92110	2.3%	-$3,503	$1,018,699	$4,100/mo	0.35
92119	2.2%	-$3,462	$995,583	$3,960/mo	0.35
92115	2.1%	-$3,114	$870,875	$3,360/mo	0.33
92104	2.0%	-$3,483	$964,656	$3,680/mo	0.32
92103	2.0%	-$3,983	$1,091,171	$4,110/mo	0.31
92111	2.0%	-$3,573	$969,404	$3,610/mo	0.31
92116	1.8%	-$3,847	$1,012,604	$3,630/mo	0.29
92131	1.8%	-$5,813	$1,513,582	$5,350/mo	0.28
92117	1.7%	-$4,308	$1,106,525	$3,840/mo	0.27
92109	1.2%	-$6,490	$1,500,885	$4,420/mo	0.19
92129	1.1%	-$6,125	$1,384,637	$3,910/mo	0.17
92127	1.0%	-$7,400	$1,655,380	$4,580/mo	0.16
92107	0.9%	-$6,898	$1,517,667	$4,060/mo	0.15
92130	0.9%	-$9,755	$2,121,590	$5,540/mo	0.14
92106	0.6%	-$8,849	$1,825,355	$4,210/mo	0.09
92014	0.3%	-$14,796	$2,892,761	$5,730/mo	0.04
92037	0.1%	-$12,460	$2,380,587	$4,370/mo	0.02