10 Best Places to Buy Rental Property in California

A view of a city with palm trees and mountains, an iconic view for rental property in California.

Find the Perfect Golden State Rental Property for Your Next Investment

California’s laid-back, but vibrant energy paired with its stunning landscapes continue to attract both residents and tourists alike, making real estate here a potential goldmine for investors. The Golden State has consistently had one of the lowest rental vacancy rates in the US at 4.1%, which is even lower than New York. With a steady influx of population and a limited housing supply, rental property in California tend to get occupied relatively quickly, resulting in the potential for strong rental income. 

Whether you’re an experienced investor or just starting out, our guide explores 10 of the best places to buy a rental property in California using different factors like job growth, rental demand, and affordability. Before we begin, it’s important to note that the “best” place to buy a rental property in California will ultimately depend on your individual investment goals, personal preference, and budget – no one place in California is necessarily better than another. Now, let’s get into it! 

Pros and Cons of Buying Rental Property in California 

Just like any other investment decision you make, there are pros and cons to buying a rental property in California. Here are some to consider before taking the leap: 


  • High rental demand due to California’s rising population
  • Growing tourism rates create high demand for short-term rentals
  • California is home to many colleges and universities, boosting rental demand in college towns
  • The diverse economy keeps the job market strong, which attracts new residents
  • Potential property appreciation, resulting in long-term investment gains
  • The mild climate attracts renters and visitors all year round, minimizing vacancy periods


  • High cost of entry due to the expensive real estate market, could require a significant investment upfront
  • The competitive real estate market can make it challenging to find a good rental property
  • California property taxes are relatively high compared to other states, which could impact your investment’s cash flow

The Top 10 Hotspots for Rental Property in California

Now that we’ve covered the pros and cons of buying a rental property in California, let’s take a look at the top 10 California cities for an investment property. 

A sunset over San Diego, one of the top cities to buy rental property in California.

1. San Diego

San Diego’s stunning beaches, vibrant cultural scene, and thriving economy make it an excellent place to buy a rental property. The city attracts a diverse population thanks to its strong job market in various industries like technology, healthcare, and tourism. Its strong job market and the numerous universities located in the city fuel a steady demand for rental housing. San Diego’s mild climate and laid-back lifestyle make it a highly desirable place to live, helping to maintain low vacancy rates and potentially high rental income for investors. 

Pros: Steady job market, diverse economy, thriving tourism industry, high rental demand, and consistent appreciation.

Cons: High overall cost of living and competitive real estate market.

Sunset over Los Angeles, one of the best cities to buy rental property in California.

2. Los Angeles

As a global entertainment and business hub, Los Angeles offers a strong and dynamic rental market. The city is convenient for renters with many large companies headquartered there and an extensive public transportation network to take them all around the city. Beyond the downtown core, LA has many diverse neighborhoods that are home to people from a wide variety of demographics, from young professionals and families to artists and students. In addition to new residents, LA has a strong tourism industry that fuels short-term rentals. The mix of short-term and long-term rental opportunities ensures a robust rental market. 

Pros: Large and ever-growing population, strong job market, and high rental demand due to limited housing availability.

Cons: Competitive market, high cost of living, and can have stricter regulations for landlords.

An aerial view of Sacramento, one of the best cities to buy rental property in California.

3. Sacramento

Sacramento, the capital of California, has a promising rental property market. With a relatively affordable cost of living compared to the rest of the state and a growing economy, the city’s population is steadily increasing. Its revitalized downtown area and expanding suburbs are also beginning to attract more young professionals and families. Not to mention, its proximity to the Bay Area makes it a prime location to commute for those looking for an affordable alternative. 

Pros: State capital with a stable and growing job market, affordable housing market compared to coastal cities, and increasing rental demand.

Cons: Can have lower rental yields compared to coastal areas.

A view of Oakland and East Bay, some of the best cities to buy rental property in California.

4. Oakland/East Bay

The Oakland and East Bay areas are ideal locations for rental properties because of their proximity to San Francisco and Silicon Valley. Compared to San Francisco, these areas have lower costs of living, but still offer diverse, vibrant communities. For those commuters, East Bay’s top-tier public transportation network makes it easy to get to and from San Francisco. The area’s growing tech industry and various colleges and universities attract a steady stream of rental demand. 

Pros: More affordable alternative to San Francisco with a growing job market, diverse population, and increasing rental demand.

Cons: Potential for higher earthquake risk.

An aerial view of Orange County, one of the best areas to buy rental property in California.

5. Orange County

Orange County is famously known for its affluent suburbs, beaches, and theme parks. Residents get to enjoy a high quality of life with plenty of job opportunities in a wide variety of industries and excellent schools. This combination of features makes this area popular for families and professionals, keeping the rental market steady. The diverse economy and consistent demand for rental properties make Orange County a potentially lucrative location for investors. 

Pros: Strong job market fueled by tech and professional services, affluent population, and high rental demand.

Cons: High cost of living and competitive market for property acquisition.

A "Fresno" sign in Fresno, one of the best cities to buy rental property in California.

6. Fresno

Fresno is a city located in California’s Central Valley with a diverse economy boosted by agriculture, healthcare, and education. The lower cost of living in Fresco attracts a mix of young professionals, families, retirees, and students. The stable job market results in a growing population, but the city provides a unique opportunity for rental properties since real estate prices are still relatively affordable here.

Pros: Up-and-coming market with a growing economy, job market diversification, and increasing rental demand. Still a relatively affordable housing market.

Cons: Can have lower rental yields compared to coastal cities.

A street in San Jose, one of the best cities to buy a rental property in California.

7. San Jose

Seen as the heart of Silicon Valley, San Jose attracts tech professionals from around the world. The tech industry here keeps the economy robust and the influx of top talent moving into the city drives a strong rental market. With major companies like Google, Apple, and Facebook located in San Jose, the demand for rental properties remains consistently high. On top of that, the diversity, along with desirable amenities like schools and parks, make it an appealing city for renters. San Jose’s relatively high median income and solid job market lead to stable rental income for investors. 

Pros: Major tech hub with a strong job market, high median incomes, and consistent rental demand.

Cons: High cost of living and competitive market for buying property.

A sunset view of Long Beach, one of the best cities to buy a rental property in California.

8. Long Beach

Long Beach presents a unique rental property market with its coastal location and diverse economy, spanning from its thriving port to its growing tech sector. The wide variety of job opportunities here attracts many new residents who become renters. Not to mention, the city is home to California State University, Long Beach, which adds to the rental demand with its student population. Long Beach’s mix of vibrant downtown energy and its laid-back beachfront lifestyle appeals to long-term and short-term tenants alike. 

Pros: Coastal city with a diverse economy, growing job market, and increasing rental demand. More affordable alternative to Los Angeles.

Cons: Competitive rental market and potential for higher earthquake risk.

A clock tower in Bakersfield, one of the best cities to buy rental property in California.

9. Bakersfield

Located in California’s Central Valley, Bakersfield is an attractive city for a rental property investment because of its affordable real estate market and growing economy. The city’s job market is stable thanks to the diverse industries here, from agriculture to oil production. The lower cost of living in Bakersfield draws those who are looking for more affordable housing compared to larger, coastal California cities. The city’s expanding infrastructure and population growth keep the rental demand steady, making it a promising investment location. 

Pros: Relatively affordable housing market with a growing job market in the energy and agriculture sectors. Decent rental yields.

Cons: Lower median income.

A sunset view of Stockton, one of the best cities to buy rental property in California.

10. Stockton

Similar to Bakersfield, Stockton offers affordable housing with a diverse economy. The city’s ongoing revitalization efforts, like improving its downtown area and waterfront, continues to make it even more appealing for residents. Stockton also has major transportation routes close by to quickly bring residents to more expensive nearby areas, like San Francisco. The city’s growth paired with lower cost of living lead to a steady demand for rental properties. 

Pros: Up-and-coming market with a growing job market, revitalization efforts underway, and still affordable housing market.

Cons: Can have lower rental yields compared to coastal cities.

For more information on lending for rental properties, check out the following guides:


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