About California

The Golden State is the largest state in terms of population and the third most expensive state to live in, with a median home price above $800k. California has a lot to offer thanks to its large entertainment and fashion industry, beaches and parks, and many universities. It is also home to large cities, including Los Angeles, San Diego, San Jose, San Francisco, Fresno, and more.



Is California a good place to buy an investment property?

Though the California real estate market is very pricey, it's also incredibly strong. Property taxes remain low, while property appreciates constantly. This makes the Golden State a must for any investment portfolio.

Increasing Value of Property

Zillow notes that the average property value in California is $746,473, which is up 0.9% from last year. Sales prices have also experienced significant growth in the past year: according to Redfin, they are up 7% from 2022. The value appreciation presents a strong potential for building equity faster.

The median sale price is $799,500, and homes have sat on the market for eight days less than last year. At the same time, the sales inventory has shrunk by 7.1%, notating an excellent opportunity for developers.

Low Taxes (Proposition 13)

The long-standing Proposition 13 has kept property taxes incredibly low throughout California, as taxes are capped at 1% of the purchase price. The average percentage for most owners is just 0.76%. Compared to the average property tax in Illinois, a shocking 2.27%, this is an excellent deal.

Growing Job Market

California is the country's largest job market, employing 17.8 million workers in a huge variety of industries. The job market has grown by an amazing 3.5%. In fact, the state created 18% of jobs nationwide in January of this year. Steady minimum wage increases ensure that tenants can afford their long-term rentals, which keeps vacancy rates quite low. 



California Real Estate Market Overview

Home sales are slowing down: single-family home sales have dropped by 11.9% year-over-year, mostly due to a lack of inventory. Statewide, there has been a 27.2% decline from October 2022 to October 2023, thanks to a severe housing shortage. This has pushed prices up, with October being the most significant jump year-over-year again in the last 17 months.

Interest rates are dropping, which is great news for investors, but it's likely that many prospective homeowners will struggle thanks to a sharp increase in inflation. While California's economy has experienced only modest growth, and population growth has slowed because of the notorious California exodus, it's still a supercharged rental market for those who invest in real estate. 

Rental Properties in California

When buying rental property in California, you have numerous different choices, each of which can net you a tidy rental income. Both long-term and short-term rentals are a powerful option — let's take a look at each choice.

Vacation Property: 

California is a beloved vacation destination, from the warm surfing sites of Huntington Beach in southern California to majestic San Francisco in northern California, so you can be assured a great return on investment when you buy short-term rental property in the right area. Various groups contribute to the increased demand for vacation homes, from families visiting Anaheim for Disneyland to remote workers fleeing Silicon Valley for a comfortable Riverside County retreat.

Multi-unit Properties

Real estate investors love multiunit properties because they are generally a more stable investment: even if one unit remains vacant, you'll still be getting positive cash flows from your other tenants. They are also in high demand in prime locations like the Bay Area, where the median home price is far too high for most to purchase their own home, but the attractive lifestyle and high salaries are too good to pass up. 

Single-family Homes

While California is known for its major cities and their high-rises, there are also ample opportunities for one-unit rentals in the smaller towns. Because property values are so high, many younger families are pushed out of the housing market and are seeking affordable housing in small, safe areas like Douglas City. A three-bedroom can get you a median rent of $3,695, which can more than justify the price.


How California Investment Properties Differ From Other States

About 44.7% of California households are renters, compared to 34% nationwide, keeping rental demand high. California also has higher average rental rates and lower vacancy rates than the rest of the US.

The 2023 median gross rent in California was $2,795 across all property types, compared to the US median gross rent of $1,978. Additionally, the 2023 vacancy rate was 5.1%, which is 22.7% lower than the US national average.




California Investment Property Loans

At Visio Lending, we offer flexible 30-year loans for vacation properties and 1-4 unit single-family rental properties, including condos and townhomes, such as:

  • DSCR Loans – Approval based on potential rental income makes this a perfect choice for self-employed borrowers who want to buy rental property. We boast an 80% LTV for purchase and refinancing, commonsense underwriting, and loan amounts up to $2 million.
  • Rental Loans – We've helped thousands of real estate investors buy the property of their dreams, lending over $2.8 billion through our Rental360 Loans. We require no income verification, can lend through corporate entities, and offer up to 80% LTV on purchases and refinances.
  • Vacation Rental Home Loans – Since 2015, we have provided over $750 million to real estate investors through our vacation home loan program. This scalable, flexible program allows up to 80% LTV for purchase and refinancing, as well as a streamlined loan process that helps you quickly enter the real estate market.

Our investment property loans for rented or rent-ready real estate throughout California are tailored to investors with:

  • No income verification or DTI calculations
  • 5/6 ARM, 7/6 ARM, and 30-year fixed-rate structures
  • IO and no DSCR option available
  • The ability to finance through an LLC and protect your personal assets


Major California Cities for Investment Properties 

California boasts many hot long-term rental markets, including Oakland, Douglas City, Sacramento, Santa Barbara, Long Beach, and Fresno. With all of its natural beauty and tourist attractions, California is also a great state to buy vacation rental property and has many vacation rental-friendly cities. 

In fact, AirDNA ranked several California cities as the Hottest Short-Term Rental Cities in the US in 2023, including San Diego and Anaheim, which are in the top 20. Other popular options include Palm Springs, South Lake Tahoe, and Big Bear Lake. 


Best Long-Term Rental Markets in California

Santa Barbara

Despite the fact that median home prices are well over $1 million, Santa Barbara has a lot to love for long-term renters: the many cultural attractions, excellent schools, and diverse array of employment opportunities make it one of the best cities in California for young families as well as retirees. Home values have appreciated by over 200% in the past decade, and rent prices are a very impressive $2,836.


This cooler California real estate market is an excellent choice for newer investors who aren't quite ready for places like Orange County or Los Angeles County. California's capital has a 16% lower cost of living than the rest of the state. At the same time, its growing economy has added over 24,000 jobs in the past year. The modest home price of $467,948 is paired with a respectable average rent of $1,856, assuring a good return on investment.


Fresno is also a very well-priced local market with an average home price of $363,928, resulting in average rents of $1,547; properties have appreciated by 223% in the past decade, and market trends suggest that this is likely to continue. The low cost of living — 24% below the state average — has led to a steady influx of new residents, with the city growing by 1.15% since 2022.


Best Vacation Rental Markets in California

The entire state has a strong demand for short-term rentals, as the tourism industry is very well-developed. While a short-term rental real estate investment will do well in nearly any area of California, these three are the proven winners in the Golden State thanks to certain key factors: timeless appeal, a steady stream of tourists, and robust economies built on leisure.

Palm Springs

This sunny city is close to the Joshua Tree National Park and the world-famous Coachella Valley, netting it a huge volume of tourists per year. In addition to concertgoers and adventure buffs, many snowbirds take advantage of its warm climate to vacation over the winter. Other investors have found meteoric success here: short-term rental income is $38,900 annually, with nightly rates of $325 and a 40% occupancy rate. The median home price in Palm Springs is $896,000.

South Lake Tahoe

South Lake Tahoe is perennially beautiful — and popular. Short-term rental demand is high here, thanks to the fact that over 15 million people visit Lake Tahoe every year. South Lake Tahoe isn't quite as productive as Palm Springs, making an annual revenue of $33,200 and a nightly rate of $291, but the properties are also a little cheaper, with a median home price of $723,500.

Big Bear Lake

Big Bear Lake is a very popular spot for people from Los Angeles County, Orange County, and even Las Vegas, and it also has very low property taxes. Over 3 million people visit this small town every year to enjoy the dramatic Sierra Nevada mountain range and the relaxing atmosphere, many of whom choose to stay the night. The median home price is a reasonable $650,000, making it a very well-priced investment.

While the annual vacation rent revenue is a bit lower at $27,800, the nightly rate is higher than South Lake Tahoe at $313. This suggests that, with the help of a competent property management company, you can boost the profitability of your investment property well above this median.

 See how we’ve helped Californians across the state close their loans!


Why Californians Should Partner with Visio



Headquartered in Austin, Texas, Visio Lending has over a decade of experience in real estate and finance. We’ve closed hundreds of DSCR loans in California over the past several years.

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Visio's loans were designed with investors in mind, offering full 30-year terms and LTVs up to 80% on purchases and rate and term refinances, and LTVs up to 75% on cash-out refinances.

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Our loan process is fast, simple, and dependable with no tax returns or DTI calculations.

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Rental Loans

Long-term financing for single family residential rental properties

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Vacation Rentals

30-year loans for vacation rentals, no personal income statements

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