Short-Term vs Long-Term Rentals in Coastal North County: What Works Best?

Short-Term vs Long-Term Rentals in Coastal North County: What Works Best?

If you own an investment property in Carlsbad, Encinitas, Cardiff, Solana Beach, Leucadia, or Del Mar, you’re probably asking yourself: Should I rent it short-term or long-term?

Each approach comes with its own perks and pitfalls, and the “right” answer often depends on your goals, your property type, and the specific community you're in.

Let’s walk through the real-world pros, cons, and considerations for both options so that you can make a more intelligent, more profitable decision for your North County San Diego investment.

What’s the Difference Between Short-Term and Long-Term Rentals?

Before we go deeper, let’s define what we’re talking about.

Short-Term Rental (STR)

Typically rented for fewer than 30 days at a time. Think Airbnb, Vrbo, and similar platforms.

Long-Term Rental (LTR)

Generally leased for six months to a year (or more), often to a resident or family.

The Case for Short-Term Rentals in Coastal North County

1. Higher Potential Income (But Not Guaranteed)

One of the main appeals of short-term rental (STR) is the potential for significantly higher income, especially in vacation-heavy coastal towns like Del Mar, Solana Beach, and Encinitas. During peak seasons (summer, holidays, local festivals), nightly rates can skyrocket.

Example

A Del Mar bungalow could fetch $400/night in July vs. $4,000/month in a long-term lease. But remember, occupancy isn’t guaranteed year-round. And off-season lulls can eat into your average.

2. More Flexibility

Want to use your property for a family getaway once in a while? With short-term rentals, you can block off dates whenever you need.

This is a big win for owners who aren’t ready to fully commit to leasing their property year-round.

3. Tax Perks for Part-Time STRs

If you rent your home for fewer than 14 days per year and use it personally the rest of the time, the Internal Revenue Service (IRS) lets you keep that rental income tax-free. Check with a CPA to ensure you meet the requirements.

4. STR Hot Spots: Where It Works Best

Short-term rentals thrive in:

• Del Mar: For race season, beachgoers, and festivals

• Encinitas and Cardiff: For yoga retreats, surf culture, and digital nomads

• Leucadia: Artsy, walkable, and highly desirable for boutique stays

• Solana Beach: Access to Cedros Design District and the beach trail

Downsides of Short-Term Rentals

1. More Work (Or More Management Fees)

STRs require constant turnover, guest communication, cleanings, restocking, and reviews. Most investors hire a property manager or risk burnout.

Tip

Use a North County San Diego property manager like Local Properties to handle the details without overpaying national STR platforms.

2. Tighter Regulation

Cities like Carlsbad, Encinitas, Del Mar have restrictions on STRs, including:

• Licensing and permits

• Occupancy limits

• Noise ordinances

• Cap on the number of STR units

Violations can lead to fines or permit revocation. Stay informed and compliant.

3. High Operating Costs

Expect to pay more for:

• Frequent cleanings

• Utilities (which owners often cover in STRs)

• Platform fees (Airbnb, Vrbo, etc.)

• Damage and insurance premiums

The Case for Long-Term Rentals in North County

1. Consistent Monthly Income

With a 12-month lease, you lock in predictable income. This is a massive benefit in non-peak months when STR bookings dip.

Example

A two-bedroom in Carlsbad might bring in $3,500–$4,200 per month, every month.

2. Lower Operating Costs

No weekly cleanings. No utility bills (most tenants pay their own). Fewer turnovers. That’s less wear and tear, less expense, and more peace of mind.

3. Easier Financing & Insurance

If you're using a mortgage, banks often prefer long-term leases for stability. Likewise, homeowners' insurance is simpler and cheaper compared to STR policies.

4. Tenant Stability and Community Contribution

In places like Encinitas, Cardiff, and Leucadia, many cities encourage long-term housing to support local workers, families, and year-round residents. Your property helps sustain the community, not just tourism.

Downsides of Long-Term Rentals

1. Less Flexibility

Once you sign a lease, you're committed. Want to sell or move back in? You’ll need to wait until the lease ends (unless you negotiate an early termination).

2. Lower Earning Ceiling

While consistent, long-term rental income typically doesn’t match peak STR rates. You're trading upside for stability.

3. Tenant Risk

A bad tenant can lead to payment issues, property damage, or drawn-out eviction processes. Proper screening is key, another reason to consider working with a local property manager.

Comparing Returns: Short-Term vs. Long-Term in North County

Note: Returns vary depending on location, property size, amenities, and management style.

What About the Laws? Key Legal Considerations

Local STR Restrictions (as of 2025)

• Del Mar: STRs limited in residential zones; permits required

• Carlsbad: STRs allowed in coastal zones but not in inland neighborhoods

• Encinitas: Must register and comply with Good Neighbor Policy

• Solana Beach: STR caps in place with lottery-based permits

Always check with city planning departments. Regulations change frequently.

Landlord/Tenant Laws

If you opt for long-term rentals, familiarize yourself with California’s tenant rights:

• Just Cause Eviction Rules

• Rent Control Laws

• Notice Requirements

• Security Deposit Limits

Consult a property management company that specializes in North County San Diego for compliance support.

Pro Tip: Hybrid Strategy

Some investors get the best of both worlds with a hybrid model:

• STR during peak season (summer)

• LTR during the off-season (Oct–May)

This can work well in Encinitas, Solana Beach, and Carlsbad, where both visitor traffic and year-round demand are substantial. You'll need flexible lease terms and a management partner who understands both sides.

How a Local Property Manager Helps

Whether you're renting short-term or long-term, a local expert makes a big difference.

What Local Properties Can Do for You

• Handle STR compliance, permits, and cleaning services

• Market and manage your long-term rental

• Offer tenant screening and lease enforcement

• Keep you updated on regulatory changes

• Maximize income while minimizing stress

Our team knows the nuances of Del Mar, Cardiff, Encinitas, Carlsbad, Leucadia, and Solana Beach, and we live here, too.

Which Rental Strategy Is Best for You?

There’s no one-size-fits-all answer.

• Want high income potential and flexibility? Short-term might be worth the effort.

• Prefer steady returns and less risk? Go long-term and sleep better.

• Torn? Try a seasonal hybrid strategy.

What matters most is aligning your rental strategy with your goals, local laws, and lifestyle.

Let’s Talk About Your Property

Thinking of renting your home in Carlsbad, Encinitas, Cardiff, Del Mar, Leucadia, or Solana Beach?

Whether you're curious about short-term rental income or want help managing your long-term lease, the team at Local Properties is here to help.

Contact us today to get expert advice tailored to your property and goals.

Let’s make your investment property work harder without the headache.