California Rental Yield

A typical home in California runs about $790,000, with 30-year fixed rates near 6.5%. That is 132% above the $340,000 median across the 50 states in this dataset. California's cost-of-living index runs 142 against a national baseline of 100, which shifts every other line in a household budget alongside housing.

Investment purchases in California generally require 20-25% down. At 25% down on $790,000, financing $592,500 at 6.5% costs about $3,745 a month in principal and interest before taxes, insurance, maintenance, vacancy, or management.

The old "1% rule" — monthly rent at 1% of purchase price — would call for $7,900 a month here. That is comfortably above the financing cost, which is the pattern in lower-priced markets where yields tend to pencil more easily. The rule is a screening heuristic from a lower-rate era, not an underwriting standard — treat it as a first filter only.

Gross yield ignores the costs that decide whether a rental actually earns. Property taxes, insurance, maintenance reserves, vacancy allowance, and management fees routinely consume 35-50% of gross rent. This repo holds no local rent or property-tax data, so enter your own figures above — a yield computed from real local rents and expenses is the only one worth acting on. Rates and prices shown are approximate planning defaults — confirm live figures with a lender.