Are you looking to invest in real estate in California? With its diverse industries, breathtaking landscapes, and bustling cities, California offers a myriad of opportunities for investment properties. Whether you're interested in traditional rentals or Airbnb properties, this guide will help you find the best places to invest in California.
Is the California Real Estate Market Worth Investing In?
Before we dive into the best locations, let's explore why investing in California real estate is a good idea:
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Strong job market: California is home to many Fortune 500 companies, such as Apple, Google, and Intel. With a thriving economy and high employment rate, there will always be a demand for rental properties.
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Low property taxes: Despite high property taxes in Silicon Valley, California's overall property taxes are below average. This means that real estate investors can enjoy a higher return on investment.
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High rental demand: Whether it's for work opportunities, outdoor activities, or favorable weather, California continues to attract a large number of people. As a result, the demand for rental properties remains high.
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Increasing home values: The California Association of Realtors predicts that the median home price will increase in 2021. With low inventory levels, the housing market is expected to remain a seller's market.
Effects of COVID-19 on the California Real Estate Market
Like most states, the California real estate market was heavily impacted by the COVID-19 pandemic. The housing market experienced a slump, with decreased demand and dropping prices. However, with the release of the Coronavirus vaccine, the market is expected to fully recover in 2021.
Best Places to Invest in California Real Estate
California offers lucrative opportunities for both traditional rentals and Airbnb investments. Here are the top cities recommended for 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%
Caption: Airbnb rental properties in California with high cash on cash return and occupancy rates
In Conclusion
These are the best places to invest in California, according to Mashvisor's real estate data analysis. Whether you're considering traditional rentals or Airbnb properties, be sure to conduct thorough research and analysis using Mashvisor's investment property calculator. With the right tools and insights, buying a rental property in California can be a stress-free and profitable venture.
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