California offers one of the most dynamic short-term rental markets in the country, with countless opportunities in destinations ranging from bustling cities to peaceful coastal villages. But, California is a big place, both in population and in size. With so many options, it's difficult to know where to invest. So we analyzed the numbers for the best Airbnb markets in California.
We looked at gross revenue, daily rates, occupancy trends, and market growth to identify the top-performing Airbnb markets in California. These locations combine profitability with demand, making them fantastic opportunities for hosts willing to put in the work.
Here are our picks for the best Airbnb markets in California:
- Oceanside: Best for luxury living
- Bakersfield: Best for high rental yields
- Redding: Best emerging market
- Oxnard: Best coastal investment
- Lake Isabella: Best affordable investment
- Manhattan Beach: Best for year-round occupancy
- Paso Robles: Best for cultural experiences
- Quincy: Best for nature lovers
How we picked the best Airbnb markets in California
California has a huge variety of options for potential hosts, but not every market is profitable or sustainable, especially when you factor in the state's high real estate prices. To create this list, we looked at a few factors and analyzed data from Forecast in SummerOS to determine the best short-term rental markets in California to invest in.
Here's the criteria we came up with:
- Revenue potential: Markets with strong gross revenue and competitive daily rates were prioritized, so you could see worthwhile returns.
- Occupancy trends: Locations with consistent year-round bookings stood out, meaning steady demand instead of seasonal spikes.
- Regulations: We focused on areas with clear, manageable short-term rental laws.
- Market growth: We also took a look at emerging markets or those showing upward trends in tourism, infrastructure, and demand.
- Initial investment: Property prices matter, so we highlighted areas where the cost of entry makes sense when looking at earning potential.
- Appeal: Finally, we looked at why each area was so great: whether it's outdoor activities, proximity to iconic landmarks, or cultural hotspots.
With these criteria, we created a well-balanced list from Forecast in SummerOS that we believe highlights the best of California this coming year. No matter if you're just starting out or you're already in the state of expanding your portfolio, these locations are worth considering for 2025.
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1. Oceanside: Best for luxury living
Oceanside is a coastal city in San Diego County that attracts travelers throughout the year to its sandy beaches, lively harbor, and landmarks like Mission San Luis Rey. Its relaxed yet refined atmosphere makes it an appealing destination for guests seeking a high-end stay by the ocean.
And the market data supports this appeal. Properties in Oceanside average $899,000 for a three-bedroom home, which is competitive for a California coastal market. Short-term rentals bring in an average annual revenue of $70,541, with daily rates around $335 and a solid 70% occupancy rate. This steady demand makes Oceanside a reliable market for investors targeting higher-end travelers.
Like most of California, hosting in Oceanside comes with specific regulations. Non-hosted rentals are restricted to the coastal zone, and all short-term rentals require an annual permit ($250) and a one-time inspection fee ($199). Hosts must also comply with the 10% Transient Occupancy Tax and occupancy limits, allowing two guests per bedroom plus two additional occupants, capped at ten.
But if you're willing to navigate these guidelines, Oceanside offers a great opportunity to combine solid rental income with a location that consistently draws guests looking for upscale stays along the coast.
2. Bakersfield: Best for high rental yields
Bakersfield, nestled in California's Central Valley, makes both Los Angeles and San Francisco fairly accessible, and it's a convenient stop along the way to either city.
For investors eyeing high rental yields, Bakersfield is compelling. With an average property price of $429,950 for a three-bedroom home, the entry cost is relatively low compared to other California markets.
Short-term rentals here generate an average gross revenue of $37,501 annually, with a daily rate of $167 and a 69% occupancy rate. The figures show a strong demand for affordable accommodations, meaning more favorable returns for you.
To operate in Kern County, which includes Bakersfield, hosts must obtain a Transient Occupancy Tax (TOT) certificate for each unit. But, this is where this gets muddy: Bakersfield isn't transparent about their regulations on short-term rentals, and–at least for incorporated areas like Bakersfield–Kern County leaves it up to the municipality. So, you'll need to contact the city itself to determine the specific regulations they impose on Airbnbs.
3. Redding: Best emerging market
With an average property price of $454,450 for a three-bedroom home (affordable for California) Redding is making waves as an emerging market for Airbnb hosts.
Tucked away in Northern California, this city is a gateway to some of the state's most beautiful outdoor attractions, like Shasta Lake, Lassen Volcanic National Park, and the Sacramento River.
While the average gross revenue of $40,078 and daily rate of $185 isn't as high as in more established markets, the steady 69% occupancy rate is an attractive incentive for potential investors.
And, with just 178 rental units and only 1% of those professionally managed, there's a lot of room for hosts to step in.
Unlike Bakersfield, operating in Redding comes with clear guidelines. The city requires short-term rental operators to obtain a permit, which includes a safety inspection and compliance with local occupancy rules. Hosts must also collect and remit Transient Occupancy Taxes. These regulations are straightforward, making Redding one of the most Airbnb-friendly cities in California.
For untapped potential, Redding stands out. It's affordable, demand is consistent, and competition is low. Combine that with the area's appeal, and you have a market poised for growth.
4. Oxnard: Best coastal investment
Oxnard might just be one of the state's best-kept secrets for coastal investments. Let's start with the numbers: the average property price of $850,000 is steep, but with gross revenues averaging $83,632 annually and daily rates at an impressive $522, the potential return speaks for itself.
Tucked along the Pacific in Ventura County, this city has beautiful beaches and a laid-back atmosphere that keeps visitors coming back. Its close proximity to major hubs like Los Angeles and Santa Barbara makes it an ideal weekend escape for guests who need a quiet stay along the coast, which is evidenced by its occupancy rate of 59%.
With only 115 rental units in the area, the market isn't oversaturated unlike other coastal cities, like San Diego.
To host in Oxnard, you'll need to obtain a Short-Term Rental permit, complete safety inspections, and follow occupancy rules. Additionally, a 10% Transient Occupancy Tax will be collected and remitted, and the city enforces restrictions on how close rentals can be to one another in residential neighborhoods.
5. Lake Isabella: Best affordable investment
Just a few miles northeast of Bakersfield is Lake Isabella. Located in the Kern River Valley, it's a hidden gem for outdoor enthusiasts and investors on a budget. South of the Sequoia National Forest and beside Isabella Lake, this small town attracts visitors looking for peaceful outdoor adventures, like fishing, boating, and hiking.
Lake Isabella is hard to beat in terms of affordability. With an average property price of $255,000, it's one of the most cost-effective markets in California.
While the average gross revenue of $22,232 and daily rate of $169 is modest, the low property costs balance this out, making it a great choice for those starting out or looking to expand their portfolio without overextending. And, with only 21 rental units in the area, competition is minimal.
Another plus is that short-term rental regulations in Lake Isabella are relatively lenient. As an unincorporated area in Kern County, potential hosts need a Transient Occupancy Tax Certificate for each unit and are responsible for collecting and remitting the 6% TOT to the county every quarter.
Investing here is a unique opportunity: not only is it affordable with a lot of room to grow, but it has lenient regulations, low competition, and a steady stream of nature-loving travelers that take advantage of its budget-friendly daily rates.
6. Manhattan Beach: Best for year-round occupancy
Manhattan Beach is a jewel in Los Angeles County. Known for its trendy dining scene, boutique shopping, and beautiful stretches of sand, this vibrant beach city attracts visitors year-round. Its proximity to Los Angeles makes it extremely popular, and a fantastic place to invest–if you can afford the upfront price.
Like the rest of the county, properties here come with a significant price tag–averaging $3,899,000–but it's still one of the most profitable Airbnb locations in California. A gross revenue of $112,810 annually and a very healthy occupancy rate of 74% reflect consistent bookings, especially when compared to other high-end coastal areas.
As you can expect, regulations here are strict: short-term rentals (less than 30 days) are largely prohibited in Manhattan Beach's residential zones. That said, properties located in the Coastal Zone are an exception, where short-term rentals are permitted.
Hosts in these areas must secure a business license and remit a 14% Transient Occupancy Tax, ensuring compliance with city rules. While these restrictions limit availability, they also reduce competition, making legally operated rentals even more desirable.
7. Paso Robles: Best for cultural experiences
Paso Robles, located in California's Central Coast region, has become synonymous with wine and the arts. With over 200 wineries in the area and a bustling downtown filled with art galleries, unique shops, and restaurants, this small city is packed with culture.
Paso Robles is also a fascinating market. The average property price of $749,000 makes it a mid-tier option compared to other areas in California, and short-term rentals earn an average gross revenue of $58,570 annually.
With a daily rate of $365, properties in Paso Robles attract high-value bookings, especially during peak seasons. However, the 50% occupancy rate also suggests the market is seasonal.
When it comes to regulations, Paso Robles has clear rules for short-term rentals. Non-hosted rentals are currently capped, meaning new permits are issued only as existing ones become available.
On the other hand, homeshare permits, where the owner resides on the property, remain uncapped, offering flexibility for those looking to enter the market. Regardless of the type, all rentals require permits and compliance with city guidelines.
Paso Robles stands out as a place where hosts can connect with culturally-minded travelers willing to pay a premium for more unique stays.
And, if the seasonality of Paso Robles doesn't appeal to you, we highly recommend investing in other areas of California with year-round tourism, like in areas near Anaheim.
8. Quincy: Best for nature lovers
Quincy is the kind of place where nature takes center stage. Nestled in the American Valley and surrounded by the Plumas National Forest, this mountain town offers a quiet retreat for travelers who love exploring the great outdoors.
Quincy also offers a unique opportunity in the short-term rental market. Homes here average $335,000, making it an affordable choice. The average gross revenue of $33,844, daily rate of $176, and 62% occupancy rate reflect a steady demand for accommodations. With only 23 rental units currently listed, there's little competition.
Operating a short-term rental in Quincy requires compliance with Plumas County regulations, including registering the property and collecting a TOT on stays of 30 days or less. Hosts must also file quarterly tax returns.
What city in California is best for Airbnb?
Choosing the right market in California for your next Airbnb really comes down to what you're hoping to achieve. Remember, there's no universal answer, and it's all about finding the market that fits your strategy and long-term goals.
Once you've narrowed down your objectives, Summer Forecast can help you refine your search. Built specifically for property managers and investors, Forecast gives you the insights and tools to make smarter, better decisions. Whether you're comparing properties, analyzing market trends, or projecting revenue, Forecast helps you focus on opportunities that align with your goals.
Check out Forecast and see how it can help you build a portfolio designed to grow your revenue.
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