Best Cities to Buy Rental Property in California for Long-Term ROI

If you’re looking to build wealth in real estate, one thing’s for sure: location is everything. And when it comes to long-term rental property ROI, California still reigns as one of the most dynamic investment arenas in the U.S.

With over 12 years of flipping, remodeling, and evaluating market trends, Ali Shariat has helped investors identify top-performing markets that don’t just cash flow—they appreciate. So if you’re searching for the best cities to buy rental property in California, this guide breaks it down city by city.

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TLDR – Quick Guide

• Best ROI: Riverside, Sacramento, Bakersfield
  
• Most Stable Markets: San Diego, Irvine
  
• Emerging Opportunities: Fresno, Stockton
  
• High-Rent Demand: Los Angeles, San Jose
  
• Top Pick for Remodel Flips: Anaheim

Implementation Tactics

1. Riverside – The Underrated ROI Champion

Riverside is booming thanks to low entry costs and proximity to L.A. Rental demand has surged with remote work allowing urban sprawl, and the ROI potential here is consistently strong.

• Median Home Price: ~$600K
  
• Rental Yield: 5–7%
  
• Why It Works: Lower taxes and better affordability compared to L.A.
  

More on Riverside market trends

2. Sacramento – State Capital, Stable Income

Sacramento offers a solid mix of government jobs, universities, and stable rent growth. Its lower prices and dependable tenant base make it a reliable performer.

• Median Home Price: ~$500K
  
• Rental Yield: 4.5–6%
  
• Why It Works: Long-term tenants and strong public sector employment
  

3. Bakersfield – High Yield, Low Entry

Often overlooked, Bakersfield has become a favorite for investors aiming for high cap rates. It’s one of the few cities in California where positive cash flow is still easy to achieve.

• Median Home Price: ~$380K
  
• Rental Yield: 6–8%
  
• Why It Works: Blue-collar economy with growing logistics and oil sectors
  

4. San Diego – Premium Rents Meet Steady Growth

Though more expensive, San Diego offers consistent appreciation, strong job growth, and rental demand that rarely dips—even during economic uncertainty.

• Median Home Price: ~$900K
  
• Rental Yield: 3.5–4.5%
  
• Why It Works: Diverse economy, lifestyle appeal, top schools
  

5. Fresno – Budget-Friendly With Room to Grow

Fresno has quietly transformed into an investor-friendly market. It offers affordability and increasing demand as Bay Area residents migrate inland.

• Median Home Price: ~$450K
  
• Rental Yield: 5–6%
  
• Why It Works: High affordability, population growth, and lower competition
  

6. Irvine – Stability and High-Tier Tenants

If you’re investing for long-term appreciation and premium tenants, Irvine is your go-to. Though not the cheapest, it offers very low vacancy rates.

• Median Home Price: ~$1.3M
  
• Rental Yield: 3–4%
  
• Why It Works: Safe, affluent, and anchored by tech and healthcare sectors
  

7. Anaheim – A Flip-and-Hold Goldmine

Known for Disneyland, Anaheim is also popular among flippers and rental investors alike. With the right remodel (Ali’s specialty), the ROI potential is excellent.

• Median Home Price: ~$800K
  
• Rental Yield: 4–5%
  
• Why It Works: Tourist-driven demand, short-term rental flexibility
  

8. Stockton – Risk, Reward, and Rising Appeal

Stockton is regaining momentum with rising home values and an influx of renters priced out of the Bay Area. Riskier than others—but the payoff can be substantial.

• Median Home Price: ~$475K
  
• Rental Yield: 5–6.5%
  
• Why It Works: Strong upside, especially for cash buyers or BRRRR strategy
  

9. Los Angeles – Always in Demand

While pricey, L.A. remains a stable bet due to its sheer size, rental demand, and diversification of neighborhoods. It’s ideal for investors with capital seeking scale.

• Median Home Price: ~$950K
  
• Rental Yield: 3–4%
  
• Why It Works: Population density, job market, global appeal
  

10. San Jose – Tech Giants, Rental Giants

Located in the heart of Silicon Valley, San Jose guarantees a steady stream of high-income renters. Long-term, this is a capital appreciation play more than a cash flow one.

• Median Home Price: ~$1.4M
  
• Rental Yield: 2.5–3.5%
  
• Why It Works: High job security, demand for quality rentals

Key Takeaways

• Bakersfield, Riverside, and Fresno offer the best cash flow opportunities.
  
• Irvine, San Diego, and San Jose are stable bets with high appreciation.
  
• Ali Shariat’s remodeling expertise makes Anaheim and Sacramento ideal flip-to-rent markets.
  
• Each city offers unique advantages depending on your investment goals.

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