Last month a buyer sent me a duplex listing a few blocks east of Coast Highway in South O with one line: "This pays for itself, right?" It was listed around $1.4 million. Two units, two bedrooms each, and a shared yard that photographed beautifully.
I ran the numbers with them at my kitchen table. Here's roughly how it looked.
Put 20% down and you're borrowing about $1.12 million. At a rate in the mid-6s, principal and interest lands around $7,000 a month. Add property taxes (call it $1,300 a month in San Diego County at that price) and insurance, and you're near $8,600 before anything breaks.
Comparable two-bedrooms in that part of South O have been renting for somewhere near $2,900, based on what I've seen in the MLS this year. Two units gets you about $5,800.
That's close to $2,800 a month out of your pocket. And I haven't set aside a dollar for vacancy, a water heater, or the roof.
This is where I disagree with a lot of the investor talk online. Coastal Oceanside duplexes rarely cash flow as pure rentals right now, and I don't think you should pretend they do by plugging in short-term rental income. The city has its own rules for short-term rentals, and they've changed before. If your plan only works at nightly rates, you don't have a plan. You have a bet on a permit.
So why do I still like some of these properties?
Because the version that works is the one where you live in one unit. Same building, same numbers, but now the $2,900 from your tenant offsets your own housing cost. You're paying roughly $5,700 a month to live a short walk from the beach while someone else pays down part of your loan. Owner-occupied financing also opens up lower down payment options, which changes the math again.
That buyer ended up moving into the front unit. Their tenant in the back has been there since spring.
For sellers, this matters too. If you own a duplex in South O or the Eastside neighborhood, your best buyer probably isn't the investor with a spreadsheet. It's the person who wants to live there and rent the other side. Market it that way. Show the second unit as income that softens a mortgage, not as a return on capital.
If you've got a specific property in mind, send the address to mayra@blacklabelrealty.com and I'll run the real numbers with you. Bring your own assumptions. I'll tell you which ones I'd change.