California's 9 Best Places to Buy a Rental Property

As one of the most desirable states to live and vacation in, California housing is always in demand—no matter how costly it is. Even though the Golden State is the most rewarding in both short-term and long-term property investments, breaking into its housing market isn’t a piece of cake. Nevertheless, don’t be discouraged by the median home prices or the cost of living.

There are plenty of areas where you can invest in rental properties and set yourself up for financial success. The key is to look beyond the major cities of San Francisco and Los Angeles. Whether you’re looking to invest in a vacation home or host an Airbnb, here are the best places to buy a rental property in California. 

The Best Places To Buy An Investment Property In Northern California

1. Douglas City

Median home price: $317,404
Median rental price: $1,200

Douglas City, located in Trinity County about 45 minutes from Redding, often goes unnoticed but has recently emerged as one of California's prime spots for buying investment property. The cost-of-living index in Douglas City is above 100, making it more affordable than both the U.S. and California averages. Additionally, the area has experienced positive job growth, enhancing its appeal as a desirable location for investment.

The city's proximity to natural attractions adds to its charm. It is near the Whiskeytown National Recreation Area, offering opportunities to hike to vibrant waterfalls and enjoy views of dramatic peaks. A short drive north takes you to Shasta Lake and the Shasta-Trinity National Forest, both renowned for their stunning landscapes and recreational opportunities, making Douglas City not just a wise investment choice but also a gateway to Northern California's natural beauty.

2. Yuba City

Median home price: $437,498
Median rental price: $2,200

Yuba City is the 21st largest metropolitan area in the Golden State and is the county seat of Sutter County. The city is close to Sacramento, Folsom Lake State Recreation Area, and Lake Berryessa—one of the weirdest places to visit in California—making it one of the best places to buy a rental property.

The cost-of-living index in Yuba City is 114.1, which is slightly over the U.S. average. However, investing in a rental property here isn’t exactly a bad idea. Make your homestay a little more inviting, and you’ll certainly see a surge in Airbnb bookings. 

The Best Areas to Buy a Rental Property In Sacramento County

3. Elk Grove

Median home price: $575,486
Median rental price: $2,805

If you're considering investing in property in the Sacramento area, Elk Grove is an excellent choice. As the second-largest city in Sacramento County, Elk Grove experienced rapid growth in the mid-2000s, establishing itself as one of the fastest-growing cities in the country. The city is home to the largest school district in Northern California, the Elk Grove Unified School District, which also stands as the city’s second-largest employer.

Elk Grove's cost-of-living index is 138.7, and it's important to note that the average Airbnb rental prices significantly vary from typical rental rates. With its growing population and diverse amenities, Elk Grove is undoubtedly one of the top places to consider for purchasing vacation rental property in California.

4. Rancho Cordova

Median home price: $529,853
Median rental price: $2,650

Rancho Cordova is the best place to buy an investment property in the Sacramento region. As the state capital’s largest employment sub-center, the city attracts over 50,000 commuters. Whether you’re looking to host an Airbnb or rent out your property long-term, Rancho Cordova is the perfect place to invest in a second home. As for the job market, there has been a positive increase. Most residents here work in management, business, technology, and architecture. 

The Best Places To Buy A Rental Property In Southern California

5. Winchester

Median home price: $669,147
Median rental price: $3,133

If investing in rental property in Palm Springs, Los Angeles, and San Diego is too expensive for your taste, Winchester is the ideal middle ground. Situated in Riverside County, Winchester is one of the best places to buy a rental property in Southern California. Renting out your Airbnb here means an 74 percent occupancy rate. The job market in Winchester has increased over the last few years as well, with most people working in the computer industry, management, engineering, and business. 

6. Blythe

Median home price: $229,017
Median rental price: $1,350

Blythe is among the most affordable places to live in Southern California. With a 131.2 cost-of-living index and inexpensive home prices, the city is one of the best places to buy a vacation home in California. Investing in an Airbnb here is quite rewarding. 

Since Blythe is located in the Colorado Desert section of the Sonoran Desert, vacationing here means you get to enjoy summer all year long. You’re also within close proximity to Havasu Lake, Joshua Tree National Park, Anza-Borrego Desert State Park, and the desolate and mysterious Salton Sea. 

The Best Places to Buy a Rental Property In Los Angeles County

7. Hawthorne

Median home price: $870,144
Median rental price: $2,150

The hometown of rapper Tyler, the Creator and the iconic Beach Boys, Hawthorne is one of the best places to buy a rental property in California. The city has one of the highest renter-occupied household rates in the Golden State—over 70 percent of residents are renters. Although the median home price is rathercostly, it’s guaranteed that you’ll make your money’s worth, especially when you consider the fact that rent prices are constantly rising. 

8. Lake Los Angeles

Median home price: $873,790
Median rental price: $3,248

Investing in long-term rentals in Lake Los Angeles is quite profitable. Countless movies, TV shows, and commercials have been filmed here, so you know there’s always someone looking for somewhere to stay. The capitalization rate of traditional rental properties is 4.63 percent with a pretty decent cash-on-cash return, making it one of the best places to buy a rental property in Los Angeles County. 

Staying in Lake Los Angeles means you’ll get to enjoy many activities in the area without having to break the bank. You can reach Angeles National Forest in only 20 minutes away and San Bernardino National Forest in 30 minutes from Lake Los Angeles. 

The Best Place to Buy a Rental Property in Orange County

9. Stanton

Median home price: $751,694
Median rental price: $2,541

Offering a small-town feel to residents, Stanton was incorporated in 1956 and has greatly flourished and developed since then. The city is now home to over 39,000 people—with most residents renting their homes—and is the best place to buy a rental property in Orange County.

Stanton’s Airbnb occupancy rate is 87 percent. A four-room Airbnb can cost anywhere between $1,900 and $6,789. Traditional rent prices can reach up to $2,541. You’ll also find no shortage of adventures here—the town is less than 15 minutes from Anaheim and is roughly 30 minutes away from Long Beach, Huntington Beach, and Newport Beach.