Legal Question in Real Estate Law in California

That is an AWFULLY broad question. Income tax on the rental income? Property taxes and exemptions? Capital gains on the two properties? Taxes to your estate/heirs when you pass on? You really need to be more specific, or just go see a tax accountant and ask all the questions you want.

If you can afford a second home, I'd recommend hiring a good tax advisor and/or a retirement financial planner. Basically, owning and renting a house is a business, and requires keeping books and filing tax returns showing the income and expenses. However, beyond that, there are many practical questions you need to consider, such as whether you can rent for a rate that'll be cash-flow neutral or better, how to handle all the problems of landlording, and so forth. In addition to retaining tax and financial advisors, you might want to obtain and peruse one or more of the paperback self-help books on "how to be a landlord." Get one oriented toward California; check the Nolo Press titles.