Why Published Rental Yield Figures Are Wrong, Including This Site's
Nearly every city-level rental yield figure divides one basket's rent by a different basket's price. Worked with real Zillow series, that error reads 6.33% where the honest answer is 2.84%.
On this page
A city-level rental yield is a fraction. The numerator comes from one dataset and the denominator from another, and almost nobody checks that the two describe the same kind of property. When they do not, the answer can be out by a factor of two — and it will look completely reasonable, because both inputs are real numbers from real sources.
This page shows the error with the actual series, then states exactly what is wrong with the figures on this site.
The error, with numbers
Zillow publishes a rent index and several home-value indices. Take San Mateo for September 2026:
- Zillow Observed Rent Index, all home types: $3,968 a month.
- Home Value Index, mid-tier single-family and condo: $1,674,908.
- Home Value Index, mid-tier condo only: $752,171.
Now the two fractions a writer might compute:
| Numerator | Denominator | Gross yield |
|---|---|---|
| Rent, all home types | Value, single-family + condo | 2.84% |
| Rent, all home types | Value, condo only | 6.33% |
Both use published Zillow data. Both are arithmetically correct. The second is nonsense, and it is more than twice the first.
The reason is that the condo value index describes small condos, while the rent index describes rents across all home types — including the three-bedroom single-family houses that command the high rents. Dividing a house's rent by a condo's price gives the yield of a property that does not exist.
What is wrong with this site's figures
The ratio this site publishes — 92 cities, rent index over mid-tier value index — has a smaller version of the same problem, and it is better to say so plainly than to be caught at it.
The rent index includes multifamily; the value index does not. Zillow's sfrcondomfr rent series covers single-family, condo and multifamily. The sfrcondo value series covers single-family and condo. So the numerator's basket contains apartment units whose equivalent is absent from the denominator.
Where that bites. It matters least in a city of detached houses and most in a city of apartments. The clearest case in the dataset is Emeryville, which tops the table at 8.68% against a region median of 3.40%. Emeryville is overwhelmingly condo and apartment stock; its mid-tier value is $429,369, the lowest of any city here, while its asking rents reflect a market of newer two-bedroom apartments. Some of that 8.68% is real — Emeryville genuinely is the highest-yielding city in the region, and it stays highest after HOA dues are subtracted — but some of it is the mix.
It is an asking-rent index, not a collected-rent index. ZORI tracks what landlords ask on new listings. In a city with rent stabilisation the rent a sitting tenant pays can be far below the asking rent, and a buyer inherits the tenancy, not the listing. This matters most in San Francisco, Oakland, Berkeley and East Palo Alto. See San Francisco rental yield.
The value index is not a transaction price. ZHVI is an estimate of what a mid-tier home is worth, published monthly, seasonally adjusted and smoothed. It is not an asking price and not a closing price.
So what is the figure good for?
It is good for comparing cities with each other, which is the one job it is asked to do here. Every city in the table is measured the same way by the same method in the same month, so the ranking and the spread between cities are meaningful even where the absolute level carries the mix error.
It is not good for underwriting a purchase. That needs the actual price, the actual achievable rent for that unit, the actual tax bill and the actual HOA. Which is why every city page on this site re-does the arithmetic from a stated price and a stated rent rather than quoting the ratio, and why the how to calculate rental yield worked example names its sources line by line.
A short checklist for any yield figure you read
- What is in the numerator's basket, and what is in the denominator's? If the answer is not the same, the figure is wrong by the difference.
- Asking rent or collected rent? They diverge most in exactly the markets people are most curious about.
- Is the price an estimate, an asking price or a sale price?
- Is it gross or net? If no cost lines are shown, it is gross, whatever it is called. See gross vs net.
- Does property tax come from the seller's assessment or the buyer's price? In California this is a large and systematic error. See California property tax on a rental.
- What month is it from? Rents and values both move; a figure without a date is not a figure.
Every number on this site is resolved from a dated published dataset when the page is built, and the method is on methodology.