Cap rates 6.0–7.0% · Median price $310,000 · Median rent $1,500/mo · Population 400K
Bakersfield offers the highest cap rates in California, driven by oil industry employment, affordable prices, and a large workforce housing demand base. Best California market for cash flow — though it lacks the appreciation of coastal markets.
Here's what the numbers look like on a typical Bakersfield rental at current market rates (20% down, 7.5% rate, standard expenses):
| Metric | As-Is (Current Rents) | Stabilized (Market Rents) |
|---|---|---|
| Purchase Price | $310,000 | $310,000 |
| Down Payment (20%) | $62,000 | $62,000 |
| Monthly Rent | $1,350 | $1,500 |
| Monthly Mortgage | $1,734 | $1,734 |
| Monthly OpEx (est 35%) | $472 | $525 |
| Est. Monthly Cash Flow | $-857/mo | $-759/mo |
| Cap Rate | 3.4% | 3.8% |
* Estimates only. Uses 20% down, 7.5% rate, 30yr term, 35% expense ratio, 5% vacancy. Run your own numbers with the calculator below.
Best for cash flow: Focus on workforce housing in established neighborhoods with strong employer anchors. Avoid chasing the highest raw yield numbers — the 10% cap rate in a declining neighborhood often means vacancy and management headaches that destroy returns.
Best for appreciation: Target neighborhoods within 2 miles of job centers, universities, or transit that are in the early stages of gentrification. Look for the coffee shop / yoga studio signal — amenities follow renters, and renters follow amenities.
Best for STR: Check local STR regulations carefully before investing. Some {name} neighborhoods have restrictions on short-term rentals.
DSCR Loans: Most Bakersfield properties qualify for DSCR financing with a 1.0+ ratio. Use our DSCR Calculator to check qualification before making an offer.