San Mateo Rental Yield, and What a $1M Condo Actually Earns
San Mateo's price-to-rent ratio is 2.84%. A million-dollar San Mateo condo worked line by line — gross 4.08%, net 1.28%, and negative $47,000 a year with a mortgage.
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San Mateo's ratio of asking rent to mid-tier home value is 2.84% as of September 2026 — rent $3,968 a month against a value of $1,674,908. That is 65th of the 92 Bay Area cities here, well below the 3.40% median.
But the question people actually ask about San Mateo is not about the mid-tier house. It is about a condo at a round number. So here it is, in full.
A $1,000,000 San Mateo condo, worked line by line
The inputs, and where they come from. Purchase price $1,000,000 — the question's own premise, and a plausible one: Zillow's mid-tier condo value for San Mateo is $752,171, so a million dollars buys above the middle of the condo market. Rent $3,400 a month — below the city's all-home-types asking index of $3,968, because that index includes larger single-family houses and a condo rents for less. HOA $450 a month.
| Line | Amount / year | Basis |
|---|---|---|
| Gross rent | $40,800 | $3,400/mo × 12 |
| Property tax | $11,000 | 1.1% of the $1,000,000 purchase price |
| Insurance (HO-6 landlord) | $2,200 | estimated |
| Vacancy | $2,040 | 5% of rent, assumed |
| Maintenance | $4,080 | 10% of rent, assumed |
| Management | $3,264 | 8% of rent, assumed |
| HOA dues | $5,400 | $450/mo × 12 |
| Total costs | $27,984 | 68.6% of gross rent |
| Net operating income | $12,816 |
- Gross yield = $40,800 ÷ $1,000,000 = 4.08%
- Net yield = $12,816 ÷ $1,000,000 = 1.28%
Costs take just over two-thirds of the rent. The two largest lines are property tax ($11,000) and the HOA ($5,400) — together $16,400, which is more than the net operating income.
With a mortgage
25% down ($250,000), $750,000 borrowed at 7% over 30 years: $4,990 a month, $59,877 a year.
- Annual cash flow = $12,816 − $59,877 = −$47,061
- Cash in = $250,000 down + $20,000 closing (2%) = $270,000
- Cash-on-cash = −17.4%
One honest adjustment
The table above charges both a full 10% maintenance allowance and a $5,400 HOA. But the HOA already pays for the roof, the exterior, the common areas and usually water and rubbish — the very things the maintenance allowance is for on a detached house.
Charging maintenance at 4% of rent instead of 10%, on the basis that the association handles the building envelope, gives:
- Maintenance $1,632 instead of $4,080
- Total costs $25,536
- Net operating income $15,264
- Net yield 1.53% instead of 1.28%
That is the better figure for a condo, and the reason this site's standard city tables assume no HOA at all rather than trying to split the difference. See HOA fees and rental yield.
The mid-tier house, for comparison
Using the city-wide published figures — $1,674,908 and $3,968 a month, no HOA:
| Line | Amount / year |
|---|---|
| Gross rent | $47,616 |
| Property tax at 1.1% | $18,424 |
| Insurance | $2,200 |
| Vacancy at 5% | $2,381 |
| Maintenance at 10% | $4,762 |
| Management at 8% | $3,809 |
| Total costs | $31,576 (66.3% of rent) |
| Net operating income | $16,040 |
| Net yield | 0.96% |
The house at $1,674,908 yields 0.96% net; the condo at $1,000,000 yields 1.28%, or 1.53% on the adjusted maintenance. The condo wins, and it wins for one reason: $675,000 less capital for 86% as much rent.
That is the general shape of the condo-versus-house question on the Peninsula. The condo's HOA is a real cost, but it is smaller than the property tax on the extra $675,000 of house.
Why San Mateo's net yield is so much worse than its gross
2.84% gross to 0.96% net means costs took 66.3% of the rent. The reason is the property tax line, and the mechanism is on gross vs net rental yield: tax is charged on price while most other costs are charged on rent, so an expensive city is hit twice by the same fact.
In San Mateo, property tax alone is $18,424 against $47,616 of rent — 39% of gross rent on one line. In Oakley, the highest-yielding city in the dataset, the same line is 18% of rent.
And note the Prop 13 point, which matters more here than almost anywhere: your tax is 1.1% of what you paid, not of the seller's old assessment. On a $1,674,908 purchase from a 2005 owner, that is about $6,753 a year more than the seller's bill. See California property tax on a rental.
Related: Palo Alto rental yield for the extreme version of the same arithmetic, and fractional rental ownership if the capital requirement rather than the yield is the binding constraint.