Investing in rental properties can be a lucrative endeavor, especially in California, where the real estate market has remained a hotspot for years. Whether you’re looking to start your property investment journey or expand your portfolio, California offers a variety of markets with strong rental demand and solid growth potential. Let’s explore the best places to buy rental property in the Golden State in 2025.
Current Market Overview in California?
California’s real estate market continues to attract investors due to its large population and booming rental market. In recent years, rental demand has surged, driven by a growing need for affordable housing.
As of 2025, California’s rental prices have increased significantly, with average rents in major cities like San Diego and Los Angeles jumping by 5-10% annually. According to Rentastic’s latest report, cities like Riverside, Fresno, and Bakersfield are seeing rapid growth, providing good opportunities for investors looking for high rental yields. The rental market is expected to remain strong due to continued population growth, economic recovery, and limited housing supply in key urban areas.
Forecast for 2025
The outlook for California’s real estate market in 2025 is promising. With interest rates remaining relatively stable and the demand for rental properties on the rise, investors can expect solid returns in the coming years. The state’s growing population, particularly in suburban areas, is expected to drive demand for single-family rentals.
The demand for affordable housing remains high, which is creating favorable conditions for rental property owners. In terms of rental yield, cities like Riverside and Sacramento are predicted to see a steady increase in rental income due to growing demand, while larger markets like Los Angeles may experience a slight cooling in rental price growth. Overall, 2025 is shaping up to be a good year for investors, particularly those interested in Bridge Loans for rental properties to secure prime deals quickly.
Multi-Axis City Swag Breakdown
When looking at California’s rental property market, it’s not just about the numbers. Each city has its own unique appeal that makes it attractive to potential tenants and investors alike. Cities like San Diego are known for their sunny weather and beach lifestyle, while Sacramento offers a more affordable cost of living with a growing job market. For real estate investors, understanding the local culture and lifestyle is just as important as knowing the financial stats.
A city’s vibe can heavily influence demand for rental properties, making some markets more desirable than others. In this breakdown, we’ll dive into 15 cities that stand out for their investment potential in 2025.
Top 15 Markets To Buy Rental Property In California
- 1. San Diego, CA
- 2. Los Angeles, CA
- 3. Sacramento, CA
- 4. Fresno, CA
- 5. Riverside, CA
- 6. Bakersfield, CA
- 7. Madera, CA
- 8. Santa Clarita, CA
- 9. Pomona, CA
- 10. Anaheim, CA
- 11. San Bernardino, CA
- 12. Modesto, CA
- 13. Oxnard, CA
- 14. Stockton, CA
- 15. Chula Vista, CA
1. San Diego, CA
San Diego remains one of the most desirable cities for real estate investors. With its coastal lifestyle, great schools, and year-round temperate climate, it’s no surprise that rental demand here is high. The average rent for a two-bedroom apartment in San Diego is around $2,400, with single-family homes fetching even higher prices. Investors can expect stable rental income and property appreciation in this thriving market. With plenty of job opportunities in tech, healthcare, and military sectors, the demand for rental housing is expected to stay strong, making it a great choice for those using Bridge Loans for rental properties.
Also Read: 6 Best Neighborhoods to Invest in San Diego, CA Real Estate
2. Los Angeles, CA
Los Angeles is a massive market with a diverse range of , from upscale areas like Beverly Hills to more affordable suburbs like Long Beach. The city’s average rent for a two-bedroom apartment hovers around $2,700, but prices vary depending on location. The constant influx of people due to the entertainment industry, tech startups, and international business keeps the rental market dynamic. Though property prices are high, investors can see long-term returns through both rental income and appreciation, especially in areas with steady tenant demand. With a wide range of rental property options, LA remains one of the top places to invest in California.
Also Read: 7 Best Neighborhoods to Invest in Los Angeles, CA Real Estate
3. Sacramento, CA
Sacramento, California’s state capital, has become increasingly attractive to renters and investors. Average rents in Sacramento are more affordable compared to cities like Los Angeles or San Francisco, with two-bedroom apartments averaging around $1,800. As the job market in the region expands, especially in government and healthcare sectors, rental demand is expected to rise. The lower cost of living combined with proximity to major Bay Area employers makes Sacramento a prime market for those seeking good rental yields with less risk.
4. Fresno, CA
Fresno’s real estate market has grown steadily, making it an ideal place for investors on a budget. With the average rent for a two-bedroom apartment around $1,300, Fresno offers some of the best rental yields in California. The city’s central location in the state makes it an attractive spot for families and working professionals. With ongoing urban development and a growing population, Fresno’s rental market is expected to perform well in the coming years.
5. Riverside, CA
Riverside has become a top choice for those looking to invest in California’s rental market, thanks to its affordable properties and proximity to Los Angeles. The average rent in Riverside is approximately $2,000 for a two-bedroom apartment. As more people move to Riverside to escape the higher costs of living in LA, the demand for rental properties continues to rise. With significant infrastructure improvements and a solid job market, Riverside is a promising market for real estate investors.
6. Bakersfield, CA
Bakersfield is another city that offers strong rental yields, making it an attractive option for investors. Average rents for a two-bedroom apartment in Bakersfield are around $1,200, making it one of the most affordable cities in California. The city’s growing agricultural industry and affordable housing options create a steady stream of tenants looking for affordable rental homes. With low property prices and rising rental demand, Bakersfield is a solid market for new and seasoned investors alike.
Also Read: 10 Best Neighborhoods to Invest in Bakersfield, CA Real Estate
7. Madera, CA
Madera, located in the heart of California’s Central Valley, is another affordable option for real estate investors. Average rent for a two-bedroom apartment is around $1,150. The city’s proximity to major agricultural and manufacturing hubs makes it attractive to renters seeking affordable housing. With a low cost of living and steady job growth, Madera is quickly becoming a top choice for those looking to enter the rental property market without breaking the bank.
8. Santa Clarita, CA
Santa Clarita offers a blend of suburban living with easy access to Los Angeles, making it a desirable spot for renters. The average rent for a two-bedroom apartment in Santa Clarita is approximately $2,400. As one of the fastest-growing cities in California, Santa Clarita’s rental market is expected to continue flourishing, with a steady demand for single-family homes and apartments. Investors can expect solid returns, especially as the area develops and attracts more residents.
9. Pomona, CA
Pomona, located in the Inland Empire, has become an attractive market for investors seeking rental properties with strong returns. The average rent for a two-bedroom apartment is about $1,800, and the city’s proximity to both Los Angeles and San Bernardino creates a high demand for rental properties. With ongoing development and a diverse job market, Pomona is one of the best places for long-term real estate investment in California.
10. Anaheim, CA
Anaheim, home to Disneyland and a growing number of tech companies, has a strong rental market. Average rent for a two-bedroom apartment is around $2,500. As tourism continues to drive the local economy, the demand for both short-term and long-term rental properties remains high. With a solid economy and continued population growth, Anaheim remains a top spot for rental property investors.
11. San Bernardino, CA
San Bernardino offers great potential for rental property investors looking for high returns. The average rent for a two-bedroom apartment is approximately $1,700. Over the past five years, the city has experienced a 5.5% population growth, and rental vacancy rates have dropped to around 4.2%. With new investments in public transportation, housing development, and downtown revitalization, the city’s infrastructure is improving rapidly. San Bernardino’s affordability compared to nearby markets like Los Angeles and Riverside continues to attract renters and long-term tenants, making it a promising area for stable rental income and future appreciation. great potential for rental property investors looking for high returns.
12. Modesto, CA
Modesto is a rapidly growing city with affordable property prices and strong rental demand. The average rent for a two-bedroom apartment is about $1,500. The city has seen a 7% population increase over the past five years and maintains a rental vacancy rate of just 3.8%. With a diversified economy rooted in agriculture, healthcare, and manufacturing, Modesto continues to attract a stable tenant base. Infrastructure upgrades and city investments in downtown revitalization have also contributed to a rise in property values. For investors seeking high yields with low entry costs, Modesto offers solid potential.
13. Oxnard, CA
Oxnard offers a coastal lifestyle with more affordable property prices than cities like Santa Barbara. Average rent for a two-bedroom apartment is approximately $2,200. The city has experienced steady population growth and boasts a rental occupancy rate of around 94%. Oxnard’s economy is powered by agriculture, international trade through its port, and a strong retail sector. With its proximity to the beach and a growing job market, Oxnard remains a popular spot for renters, making it an attractive market for property investors looking to diversify their portfolios.
14. Stockton, CA
Stockton has become a sought-after city for investors seeking high rental yields in California. The average rent for a two-bedroom apartment is around $1,500. Over the past five years, Stockton’s population has grown by over 6%, and the city continues to benefit from its location as a more affordable alternative to the Bay Area. Vacancy rates remain low, typically under 4%, which signals strong rental demand. With recent investments in downtown redevelopment and improvements in public infrastructure, Stockton’s economy is steadily growing, driven by logistics, healthcare, and education sectors.
15. Chula Vista, CA
Chula Vista offers affordable living with easy access to San Diego. The average rent for a two-bedroom apartment is about $2,200. The city has seen a population growth of nearly 8% over the past five years, and rental occupancy rates remain high—hovering around 95%. With a growing local economy supported by healthcare, education, and retail sectors, Chula Vista presents strong potential for steady rental income. As one of the fastest-growing cities in San Diego County, it’s a smart pick for investors aiming for long-term gains and consistent tenant demand.
Conclusion
California remains one of the best states for real estate investment, with a wide range of cities offering strong rental demand and growth potential. Whether you’re looking for a bustling urban market or a more affordable suburban option, there’s a city in California that can provide the right investment opportunity.
At RTI Bridge Loans, we specialize in helping investors secure the financing they need to quickly capitalize on the best rental properties. For more information or to get started on your next investment, contact us today at (562) 857-2285.