Is Coronado, California Good for Airbnb Investment?

To start an Airbnb in Coronado, California, begin by researching the city's strict short-term rental regulations, as Coronado requires a Transient Occupancy Registration Certificate and limits rentals to properties where the owner resides on-site or adjacent properties, with rentals restricted to maximum 30 days per year for non-owner occupied units. Obtain necessary permits including the TOT certificate ($100-200 annually), business license from the City of Coronado, and ensure compliance with San Diego County health department requirements. Find a suitable property within Coronado's residential zones that meets the city's requirements, considering the high property values averaging $2-4 million for homes near the beach and $800,000-1.5 million for condos. Furnish the space with high-quality, coastal-themed furniture and amenities including WiFi, air conditioning, beach equipment, and safety features like smoke detectors and fire extinguishers, budgeting $15,000-30,000 for complete furnishing. List your property on Airbnb, VRBO, and other platforms with professional photography highlighting the proximity to Coronado Beach, Hotel del Coronado, and downtown San Diego, setting competitive rates of $200-600 per night depending on property size and location. Manage the property by implementing a cleaning protocol between guests, maintaining 24/7 guest communication, coordinating check-ins/check-outs, and ensuring compliance with Coronado's noise ordinances and parking restrictions while collecting and remitting the required 10.75% Transient Occupancy Tax to the city.

To identify profitable short-term rental properties in Coronado, California, focus on properties within walking distance of Coronado Beach, Hotel del Coronado, and the downtown village area, as these locations command premium nightly rates of $300-800+ during peak seasons. Target 2-4 bedroom single-family homes, condos with ocean or bay views, properties with parking spaces, outdoor areas, and beach-adjacent locations, as these features significantly increase booking rates and allow for higher pricing. Conduct pricing analysis using AirDNA and Mashvisor to evaluate average daily rates ($250-600), occupancy rates (65-80% in prime locations), and seasonal demand patterns, with summer months and holidays showing 20-40% rate premiums. Research competition by analyzing similar properties within 0.5 miles using Airbnb and VRBO, noting that Coronado has limited inventory due to strict city regulations, creating opportunities for well-positioned properties. Utilize tools like AirDNA for market data, STR Helper for regulation compliance, Mashvisor for investment analysis, and consult with local real estate agents familiar with Coronado's STR ordinances, as the city requires business licenses and has occupancy limits that affect profitability, while properties near the beach and ferry landing consistently outperform inland locations by 25-40% in revenue generation.

To obtain an Airbnb/STR permit in Coronado, California, you must first submit an application to the City of Coronado Planning Department located at 1825 Strand Way, as Coronado requires a Conditional Use Permit (CUP) for short-term rentals. Required documents include a completed CUP application form, property deed or lease agreement, floor plans, site plan, parking plan showing adequate off-street parking, contact information for a local property manager within 30 minutes of the property, proof of liability insurance ($1 million minimum), and a good neighbor agreement. The application fee is approximately $2,500-$3,500 for the CUP process, plus additional fees for environmental review if required. The timeline typically takes 3-6 months due to the public hearing process before the Planning Commission and potentially City Council. Specific Coronado requirements include maintaining the property's residential character, providing one off-street parking space per bedroom, having a local contact person available 24/7, limiting occupancy to 2 people per bedroom plus 2 additional guests, maintaining quiet hours from 10 PM to 8 AM, and ensuring the property meets all building and fire safety codes. The property must also be owner-occupied or have an owner residing within Coronado city limits, and rentals are limited to a maximum of 30 days per stay with no events or parties permitted.

Short-term rentals (STRs) in Coronado, California are currently prohibited for residential properties under the city's municipal code, which has banned vacation rentals in residential zones since around 2018-2019. The City of Coronado implemented these restrictions to preserve neighborhood character and address concerns about housing availability for residents. STRs are only permitted in commercial zones, primarily affecting hotel and resort properties rather than residential homes or condominiums. The ban applies to all residential areas throughout the city, including single-family homes, condos, and multi-family properties, with violations subject to significant fines. Recent legal changes have maintained this restrictive stance, with the city council consistently upholding the residential STR prohibition despite some property owner challenges, making Coronado one of the more restrictive jurisdictions in San Diego County regarding short-term rental operations.

The most attractive Airbnb investment areas in Coronado, California include the Village area near Orange Avenue, which serves as the main commercial district with restaurants, shops, and easy beach access, making it highly desirable for tourists seeking walkability and convenience. The beachfront properties along Ocean Boulevard and the Strand offer premium rental potential due to direct beach access and stunning ocean views, attracting high-paying guests year-round. The area near the Hotel del Coronado is particularly lucrative as it benefits from the hotel's reputation and draws visitors who want luxury accommodations nearby but at potentially lower costs than the historic resort itself. The North Island vicinity, while more residential, appeals to military families and business travelers due to its proximity to Naval Air Station North Island, providing steady demand for longer-term stays. The Crown Cove and Cays areas offer upscale waterfront properties that command premium rates from affluent tourists seeking exclusive bay-front experiences. These neighborhoods collectively benefit from Coronado's year-round tourism, the iconic Hotel del Coronado's events and conferences, military personnel rotations, San Diego's business travel overflow, and the area's reputation as a safe, family-friendly destination with pristine beaches just minutes from downtown San Diego.

Airbnb properties in Coronado, California are subject to multiple lodging taxes including the City of Coronado's Transient Occupancy Tax (TOT) of 12% on gross rental receipts for stays under 30 days, which is collected by Airbnb directly from guests and remitted to the city monthly through their automated collection agreement established around 2018. Additionally, properties are subject to San Diego County's TOT of 3.5% for unincorporated areas, though this may not apply within Coronado city limits, and California state sales tax of 7.25% plus local district taxes bringing the total state and local sales tax to approximately 8.75%. The city's TOT applies to all short-term rentals under 30 consecutive days with no exemptions for duration or property type, and hosts must register their properties with the city and obtain a business license. Airbnb handles the collection and remittance of the city TOT automatically, but hosts remain responsible for ensuring compliance with registration requirements and may need to file additional tax returns depending on their specific situation and any applicable state taxes not collected by the platform.

The total cost to start an Airbnb in Coronado, California is approximately $2,850,000-$3,100,000. Property purchase represents the largest expense at $2,500,000-$2,800,000 for a median-priced home in this premium beachside community. Furnishing costs range from $75,000-$100,000 for high-quality furniture, appliances, linens, and decor suitable for luxury vacation rental guests. Initial setup costs including professional photography, listing creation, and marketing materials total $5,000-$8,000. Permits and fees including business license, transient occupancy tax registration, and potential HOA approval fees cost $2,000-$5,000. Insurance including short-term rental coverage and increased liability protection runs $8,000-$12,000 annually. Utilities including electricity, gas, water, internet, and cable average $800-$1,200 monthly. First six months operating costs including utilities ($4,800-$7,200), cleaning services ($6,000-$9,000), maintenance and repairs ($3,000-$5,000), property management if outsourced ($15,000-$25,000), and marketing expenses ($2,000-$3,000) total approximately $30,800-$49,200. Additional considerations include potential property management software subscriptions, welcome amenities, and emergency repair funds that could add another $5,000-$10,000 to initial costs.

Airbnb properties in Coronado, California demonstrate strong profitability potential with average daily rates ranging from $200-400 for standard properties and $500-800 for luxury beachfront rentals, generating annual revenues of $60,000-120,000 for well-positioned properties. Operating expenses typically include 25-30% for cleaning and maintenance, 3% Airbnb service fees, 10-14% for property management if outsourced, plus utilities, insurance, and supplies, totaling approximately 45-55% of gross revenue. Net profit margins generally range from 35-45% for owner-operated properties, with beachfront condos near Hotel del Coronado achieving occupancy rates of 75-85% year-round due to the island's consistent tourism demand. Success factors include proximity to the beach (properties within 2 blocks command 40% higher rates), professional photography, rapid guest communication, and maintaining 4.8+ star ratings. A typical 2-bedroom condo purchased for $1.2 million in 2022 near Orange Avenue generates approximately $95,000 annually with $52,000 in expenses, yielding $43,000 net profit and an 8-10% cash-on-cash return when factoring in mortgage payments, though properties owned outright can achieve 15-20% returns on investment.

Airbnb investments in Coronado, California typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, driven by the city's premium beachfront location and strong tourist demand from San Diego visitors. Properties near Coronado Beach and the Hotel del Coronado command nightly rates of $300-600 during peak summer months and $200-400 in off-season, with average occupancy rates of 70-80% annually. Initial profitability usually occurs within 18-24 months for well-positioned properties, though high acquisition costs averaging $1.5-3 million for suitable rental properties require substantial capital investment. The market benefits from year-round tourism, military personnel rotations from Naval Air Station North Island, and proximity to downtown San Diego, with gross rental yields typically reaching 4-6% before expenses, making it a solid but capital-intensive market for short-term rental investments.

STRSearch leads the market in Airbnb investment property analysis nationwide including Coronado, California. Local Coronado real estate agents specializing in short-term rental investments include The Coronado Group, Berkshire Hathaway HomeServices California Properties, and Coldwell Banker West. Willis Allen Real Estate has agents experienced in vacation rental properties in the Coronado market since 2018. National services include Awning (launched 2019), RedAwning, and Mashvisor which provide market analysis tools for Airbnb investments. AirDNA offers comprehensive short-term rental data analytics for the Coronado market. Local property management companies like Vacasa and RedAwning also assist investors in identifying profitable properties. Roofstock and Arrived Homes have expanded into the short-term rental investment space, while companies like BiggerPockets connect investors with local Coronado agents experienced in vacation rental properties. The Coronado real estate market benefits from firms like Pacific Sotheby's International Realty and Compass who have agents specializing in investment properties near the beach and Hotel del Coronado area.