Top Cities in California for Rental Property ROI (2020)

Which are the best California Cities for Investment Property?
Looking for an investment condo in the Golden State. A lot of property investors still are. California will be one of the top housing markets in 2020. Another year has passed and new communities are drawing the attention of buyers.

But after you see the high prices, high taxes, landlord restrictions, employment in different California cities, and the price to rent ratios, you’ll be wondering which cities offer the best rental properties in 2020.

California offers the widest variety of properties and perhaps the highest potential rental returns. However, the best property really depends on whether you’re looking to live in your investment, fix and flip, or use it as a long term rental or short term Airbnb type rental property.

Each community in California offers unique possibilities, dangers, and restrictions in this regard.

Price, lifestyle, amenities, price to rent ratio, taxes, commute distances, pollution, and growth all play into the buy decision. With a little research and a spreadsheet, you’re ready to narrow down your choices to the best California communities.

But for now, keep your mind open and explore each California city and community. We’ve got some helpful lists below of communities and cities below ranked by the experts.

These are communities offering the best neighborhood character, schools, safety, jobs, and other key factors for homeowners, investors as well as renters. Check out the rental property report for more info on US rental housing. and the best cities to buy rental property. Surprisingly, the experts pick Northern California cities as more desirable.

Here’s a look at the rental yields in major California metros:

City Annual Gross Rental Yield Predicted
San Francisco Oakland 4.1%
Santa Clara 3.6%
Los Angeles 4.9%
San Diego 5.5%
Sacramento 6.0%
Riverside 5.6%
San Bernardino 7.1%
Santa Barbara 6.6%
Ventura 5.0%
Solano 6.1%

Low-Risk High Return
Across the US, the question then, might be whether you trust the growth and sustainability of the economies of those cities in the south, desert states, and the midwest?

Capital appreciation and rent growth in cities such as Charlotte, Tampa, Atlanta, Greensboro, Orem, Columbia, Augusta, Jacksonville, Springfield, and others look very inviting with an annual gross rental yield of 11% to 14%. The best you might do in California’s housing market in 2019 might be 8%.

Yet, if the US economy should falter, will California’s cities will retain and regain their value and rent performance fastest? That’s the long term view.

You can see a fuller list of the best California cities here and in the California housing market report. Take a closer look at the Los Angeles housing market and the San Francisco housing market.

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