12 Best Places to Invest in California in 2021: A Guide for Savvy Investors

CEO Khai Intela
California offers a plethora of opportunities for real estate investors seeking profitable ventures. As the most populous state in the US with a diverse economy and stunning landscapes, California continues to attract both local and...

California offers a plethora of opportunities for real estate investors seeking profitable ventures. As the most populous state in the US with a diverse economy and stunning landscapes, California continues to attract both local and international travelers year-round. Whether you're interested in buying a rental property or searching for the best places to invest in California, this guide is for you.

Is the California Real Estate Market a Good Investment?

Before we delve into the best places to invest in California, let's explore why buying investment property in the state is a wise decision.

  • Strong job market: California boasts the presence of numerous Fortune 500 companies, including Chevron, Apple, Walt Disney, Google, and many more. With a thriving job market and high employment rate, there is always a demand for rental properties.

  • Low property taxes: While property taxes in Silicon Valley and other areas may be high, California's overall property taxes are below average. With lower property taxes, real estate investors can enjoy a higher return on investment.

  • High rental demand: California attracts a significant number of people due to its outdoor activities, vibrant entertainment, and favorable weather. This leads to a continuous high demand for rental properties. Although the local market experienced a setback during the pandemic, the economy is now on an upward trajectory.

  • Increasing home values: The California Association of Realtors predicts that the median home price will rise by 1.3% to $648,760 in 2021. With low inventory levels and a seller's market, investing in California's housing market can yield promising returns.

Effects of COVID-19 on the California Real Estate Market

12 Best Places to Invest in California in 2021: Covid-19

Like other states, the California real estate market suffered from the impact of the Coronavirus pandemic. During the peak of the crisis, buyers and sellers were hesitant due to economic uncertainty and restrictions on in-person activities. However, the housing market began to recover in June, and with the introduction of vaccines, a full recovery is expected in 2021.

Best Places to Invest in Real Estate in California

California offers lucrative opportunities for both traditional and Airbnb investments. Here are the cities where you can find the best investment properties based on Mashvisor's cash on cash return real estate data:

Best Locations for Traditional Rental Property

#1. Citrus Heights, California

  • Median Property Price: $322,467
  • Price per Square Foot: $248
  • Price to Rent Ratio: 14
  • Monthly Traditional Rental Income: $1,985
  • Traditional Cash on Cash Return: 4.64%

#2. Bishop, California

  • Median Property Price: $484,200
  • Price per Square Foot: $242
  • Price to Rent Ratio: 15
  • Monthly Traditional Rental Income: $4,065
  • Traditional Cash on Cash Return: 4.46%

#3. Quincy, California

  • Median Property Price: $323,971
  • Price per Square Foot: $206
  • Price to Rent Ratio: 14
  • Monthly Traditional Rental Income: $1,877
  • Traditional Cash on Cash Return: 4.37%

#4. Cathedral City, California

  • Median Property Price: $445,122
  • Price per Square Foot: $234
  • Price to Rent Ratio: 15
  • Monthly Traditional Rental Income: $2,533
  • Traditional Cash on Cash Return: 4.17%

#5. Taft, California

  • Median Property Price: $175,204
  • Price per Square Foot: $112
  • Price to Rent Ratio: 15
  • Monthly Traditional Rental Income: $2,535
  • Traditional Cash on Cash Return: 4.17%

#6. Novato, California

  • Median Property Price: $847,000
  • Price per Square Foot: $559
  • Price to Rent Ratio: 15
  • Monthly Traditional Rental Income: $4,162
  • Traditional Cash on Cash Return: 4.17%

Best Locations for Airbnb Rental Property

#1. Riverside, California

  • Median Property Price: $542,633
  • Price per Square Foot: $308
  • Average Airbnb Daily Rate: $156
  • Monthly Airbnb Rental Income: $4,467
  • Airbnb Cash on Cash Return: 5.69%
  • Airbnb Occupancy Rate: 67%

#2. West Sacramento, California

  • Median Property Price: $448,914
  • Price per Square Foot: $288
  • Average Airbnb Daily Rate: $138
  • Monthly Airbnb Rental Income: $3,268
  • Airbnb Cash on Cash Return: 5.49%
  • Airbnb Occupancy Rate: 76%

#3. Bakersfield, California

  • Median Property Price: $380,973
  • Price per Square Foot: $186
  • Average Airbnb Daily Rate: $135
  • Monthly Airbnb Rental Income: $3,016
  • Airbnb Cash on Cash Return: 5.46%
  • Airbnb Occupancy Rate: 74%

#4. Roseville, California

  • Median Property Price: $518,211
  • Price per Square Foot: $270
  • Average Airbnb Daily Rate: $161
  • Monthly Airbnb Rental Income: $3,751
  • Airbnb Cash on Cash Return: 5.43%
  • Airbnb Occupancy Rate: 84%

#5. Visalia, California

  • Median Property Price: $394,158
  • Price per Square Foot: $183
  • Average Airbnb Daily Rate: $84
  • Monthly Airbnb Rental Income: $2,697
  • Airbnb Cash on Cash Return: 5.27%
  • Airbnb Occupancy Rate: 78%

#6. National City, California

  • Median Property Price: $572,919
  • Price per Square Foot: $390
  • Average Airbnb Daily Rate: $161
  • Monthly Airbnb Rental Income: $4,702
  • Airbnb Cash on Cash Return: 5.21%
  • Airbnb Occupancy Rate: 64%

Investors should be aware that California has strict regulations for short-term rentals, such as those on Airbnb. Certain cities, like Los Angeles and San Diego, do not allow non-owner occupied properties on these platforms. Conduct thorough research on local laws and restrictions before investing in a property for short-term rental purposes.

Conclusion

With Mashvisor's real estate data analysis, we have identified the best places to invest in California. Conduct thorough market and property analysis using Mashvisor's investment property calculator to make informed decisions. By leveraging the right real estate investment tools, buying a rental property in California can be a stress-free and lucrative endeavor.

For affordable cities and the best real estate investments, sign up for Mashvisor now and get 15% off. Start your journey towards real estate success in California today!

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