Sounds like a losing proposition to me. 

I would also add that as you move up to the $1500 rent level you are also looking at individuals that have the resources to purchase a starter home so the value proposition for the renter has to be presented differently.  

We decided we'd like to transfer ownership to our children so we can help them avoid the new Proposition 19 law that requires property tax reassessment upon inheritance.

We decided we'd like to transfer ownership to our children so we can help them avoid the new Proposition 19 law that requires property tax reassessment upon inheritance.

California is saying they are entitled to income earned anywhere in the world.Saw some comments in reply about Proposition 19.  

Proposition 19 $1million exemption is owner to owner and that claim needs to be within a year which is ridiculous.  

Unless you are really banking on appreciation, which is a risky proposition at this point in the market, I'd look elsewhere. 

In November, Proposition 19 passed in California.

However familial transfers other than parents to children and grandparents to grandchildren are not exempt from reassessment (and further limited by Proposition 19).Assessor will review trusts. 

This is why people should read or understand the full propositions they vote for!