Commitment to our readers

The GOBankingRates editorial team is committed to providing you with unbiased reviews and information. We use data-driven methods to evaluate financial products and services – our ratings and reviews are not influenced by advertisers. Learn more about our editorial policies and product and service rating methodology here.

20 years
We help you live richer

Trust from
Millions of readers

Many believe the West Coast is the best coast, but not all cities are the same when it comes to rental properties. If you’re looking to invest in the Golden State (or its neighboring states), you need to be strategic about where you buy.

GOBankingRataes spoke to experts to bring you the best vacation home markets in this region.

Here are the 7 best vacation home rental markets on the West Coast.

San Diego: sun, surf and steady income

San Diego tops the list for many reasons. John Stevenson, retirement and investment expert at annuity.org, explains why. “San Diego offers year-round warm weather, beautiful beaches, and numerous attractions like the San Diego Zoo, SeaWorld, and Balboa Park (one of my personal favorites). The city attracts a steady stream of tourists, making it a great market for vacation rentals.”

As for rental potential, Stevenson said, “High occupancy rates due to consistent demand and a strong short-term rental market, especially in coastal areas like La Jolla, Pacific Beach and Mission Beach, (are a huge advantage). Little Italy is also one of my personal favorites and commands high rents for that location.”

Santa Barbara, California: Luxurious living and high returns

If you’re looking to get into the luxury market, Santa Barbara is an excellent choice. Stevenson described the city as “known for its Mediterranean climate, stunning coastal views, and vineyards.” Plus, it’s close to Los Angeles, making it an excellent option for weekend getaways for wealthy Los Angeles residents.

The rental potential here is significant. “(There are) high rents, particularly for luxury properties. The market is competitive but the return on investment can be significant,” Stevenson added.

Lake Tahoe, California/Nevada: Year-round appeal

Lake Tahoe offers a unique opportunity for investors as it is attractive all year round. Boating in the summer and skiing in the winter – what more could you want?

Stevenson, who lives in the area, shares his insider perspective: “Lake Tahoe is a year-round destination, popular for both winter sports and summer activities such as hiking and boating. The scenic beauty and outdoor recreation opportunities make it a top choice for vacationers.”

G. Brian Davis, co-founder of SparkRental, shares this opinion but urges caution. “The Lake Tahoe area offers excellent winter sports, summer and fall hiking, and swimming and boating. However, beware of high prices and do not buy until you have triple-checked occupancy and cash flow projections for the full year.”

Big Bear Lake, California: Mountain home close to town

Big Bear Lake is another year-round destination that has caught the attention of investors. Stevenson explained the lake’s appeal, saying, “Big Bear Lake is a popular destination for outdoor enthusiasts, offering skiing, hiking and lake activities. It is within driving distance of major cities like Los Angeles, making it a good weekend destination.”

The rental potential is particularly high during peak season. “High occupancy rates during the winter and summer seasons. The market is particularly favorable for cabins and mountain homes,” Stevenson said.

Cannon Beach, Oregon: Coastal charm in the Pacific Northwest

For those looking to invest in the Pacific Northwest, Cannon Beach offers a unique (and beautiful) opportunity. Stevenson described its charm this way: “Known for its iconic Haystack Rock, beautiful coastline and charming small-town atmosphere, Cannon Beach is a popular spot for tourists seeking a tranquil beach getaway in the Pacific Northwest.”

Rental potential is high, especially in the warmer months. “Strong demand in the summer months and consistent interest year-round. Holiday homes here are often sought after for their scenic views and proximity to the beach,” added Stevenson.

Wine regions: A toast to year-round tourism

Wine lovers and investors should definitely consider the vacation-friendly wine regions along the west coast.

“Vineyard regions see consistent traffic year-round, with an additional spike at harvest time,” Davis said. “Look at the Central Coast and Paso Robles wine regions in California, Walla Walla and Columbia Valley in Washington, and Willamette Valley in Oregon.”

Anaheim, California: The Magic of Disney-Driven Demand

If you’re looking for a market with virtually guaranteed demand, consider Anaheim. Seamus Nally, CEO of TurboTenant, explains, “Anaheim is home to Disneyland, which means tourism there is incredibly high year-round.”

He also said that if you rent a vacation rental in the area, you have to be able to guarantee “consecutive guests” even if you charge a high price.

More from GOBankingRates