California is among the most populous states in the US. And being the host of several Fortune 500 companies, the state has a flourishing economy. Over the years, California has attracted thousands of people, who have increased the demand for rentals.
In this guide, we will explore some of the top places in California you can consider buying rental property.
San Diego
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This city is the second-biggest in California and ranks eighth in the United States. San Diego boasts a population of more than 1.3 million. Over the last two years, the value of houses has surged by 11% and is expected to increase by 5.5% in the next year. As of January 2024, the average home price in San Diego is $938,000, and the expected rental income is $2,950.
Why San Diego stands out: Given its beautiful beaches, laid-back lifestyle, and mild climate, San Diego is a sought-after city to work, play, and live. The most popular physical activities here are boating and surfing.
Irvine
Irvine is one of the most family-friendly places in California. Moreover, the city is the home of the University of California. Irvine also hosts top companies like Verizon Wireless, Samsung, and Honda.
In the past year, home value has surged 13% and is projected to grow 8% in the next two years. About 60% of Irvine residents live in rental houses. This makes the city ideal for buying rental properties. Currently, the average home price in Irvine is $1.2 million, and the average rent is $3,150.
Why Irvine stands out: The job market in Irvine is strong. And considering that many people in this city prefer renting, Irvine offers an excellent opportunity for investors looking to buy rental properties.
Palo Alto
Palo Alto’s housing market is the fifth most expensive in the United States. The city houses one of the world’s leading learning institutions, Stanford University. The average cost of buying a house in Palo Alto is $3.1 million, while the average rental income is $3,750.
Why Palo Alto stands out: Palo Alto hosts several tech companies like Space System, HP, PARC, and VMware, thus offering a booming job market. Moreover, as a real estate investor, you will enjoy regular tax breaks.
Manhattan Beach
Over the past five years, home value in Manhattan Beach has grown at a yearly average of 4.8%. The city welcomes millions of visitors annually, making it ideal for investors looking to buy vacation rentals. The average house price is $2.9 million, and you can pocket about $1,500 in monthly rent.
Why Manhattan Beach stands out: The city is considered among the safest in California, making it a perfect choice for families. Moreover, Manhattan Beach houses some of the top schools in the US and several well-known companies.
Palm Springs
This area is ideal for anyone who desires to escape the busy city life. Palm Springs is popular among families and retirees. Its real market has been flourishing for years, offering various types of properties for sale. The average home price in Palm Springs is $647,000, while the average rent is $1,900.
Why Palm Springs stands out: The mid-century-modern architecture in Palm Springs has continued to attract design lovers. The rental income is also reasonable for investors.
Lake Forest
Lake Forest is a small but prosperous town known for its pristine neighborhoods and expansive parks. The most common outdoor activities here include golfing, hiking, and biking. The average home price in Lake Forest is $1.03 million, and the average rent stands at $2,400.
Why Lake Forest stands out: Given its quiet environment, Lake Forest is considered one of the best places in California for families to reside.
Conclusion
California offers several great places for buying rental property. However, before committing funds to buy any house, it’s crucial to consider the expected rental income and the growth of a particular city’s housing market. For this reason, we recommend you seek the guidance of a professional real estate agent.