Top 5 California Cities for Rental Property Investments in 2024

Top 5 California Cities for Rental Property Investments in 2024

Investing in rental properties in California can be highly rewarding if you pick the right location. Here are five top cities for 2024, with insights into property types, expected rental returns, and investment strategies.

1. Santa Clarita – Strong Rental Demand

Santa Clarita's family-friendly atmosphere, quality schools, and strong economy make it a great place for rental investments. The city has experienced consistent growth, leading to high rental demand, particularly for single-family homes and townhouses.

• Property Example: A three-bedroom single-family home priced around $700,000.
• Expected Rental Income: Approximately $3,500 to $4,000 per month.
• ROI Expectations: With strong rental demand, investors can expect a gross rental yield of 5-6%, and property appreciation potential adds to long-term gains.

2. Pomona – Affordability and Growth

Pomona offers a more budget-friendly entry point for investors compared to other California cities. With several colleges nearby, including Cal Poly Pomona, rental demand remains high, especially for multi-family units and student housing.

• Property Example: A duplex priced at $550,000 with two units.
• Expected Rental Income: $1,800 to $2,000 per unit per month, totaling $3,600 to $4,000.
• ROI Expectations: Pomona’s lower prices can lead to a higher rental yield, around 6-7%. The market is growing, making it a great choice for long-term appreciation.

3. Palm Springs – Vacation Rental Paradise

Palm Springs is well-known for its tourism appeal, attracting visitors year-round with its resorts, golf courses, and festivals. Short-term vacation rentals like Airbnbs are especially lucrative here, but it’s important to comply with local regulations on short-term rentals.

• Property Example: A two-bedroom vacation home near downtown, priced at $650,000.
• Expected Rental Income: $250 to $400 per night, potentially $5,000 to $7,500 monthly during peak seasons.
• ROI Expectations: Gross rental yields can exceed 10% during high-demand months, but income can fluctuate with seasonality.

4. San Bernardino – Low-Cost Investment

San Bernardino offers one of the lowest property costs among these top cities, ideal for new investors or those seeking more affordable opportunities. With ongoing revitalization and affordable housing demand, single-family homes and multi-family units perform well.

• Property Example: A three-bedroom single-family home priced at $400,000.
• Expected Rental Income: Around $2,000 to $2,400 per month.
• ROI Expectations: Investors can see gross rental yields of 6-8%, with the potential for future appreciation as the city continues its development initiatives.

5. Burbank – High Rental Income Potential

Burbank stands out due to its proximity to Hollywood and the entertainment industry, attracting tenants who are professionals in the film, television, and tech sectors. High rental demand for both single-family homes and multi-family units makes it a premium market.

• Property Example: A two-bedroom apartment building near studios, priced at $950,000.
• Expected Rental Income: Each unit could generate $2,800 to $3,500 monthly, depending on location and amenities.
• ROI Expectations: With strong demand, rental yields can range from 5-7%, but higher property prices mean a larger upfront investment. However, long-term appreciation and premium rents make Burbank a worthy consideration.

What Does It Take to Get Started?

To invest in these cities, you'll need a clear understanding of your budget, financing options, and rental strategy. Be prepared to navigate local regulations, especially in areas with short-term rental restrictions like Palm Springs. Conduct thorough due diligence on market trends and expected rental yields, and consider partnering with a local real estate agent to maximize your investment’s potential.

Ready to Invest?
For more information on investing in these top California markets, reach out to us or visit our Invest in Real Estate page. Let us help you find the perfect investment opportunity tailored to your goals!