Cap Rate in San Francisco, CA

2026 Market Overview for Real Estate Investors

Avg Cap Rate

2.8%

#50 of 50 markets

Median Home Price

$1,200,000

Purchase price

Median Monthly Rent

$3,200

$38,400/yr gross

Rent-to-Price Ratio

0.27%

Below 1% rule

Cap Rate Rating

Low

Below average return. Common in high-appreciation markets. You are betting on property value growth, not cash flow.

Market Snapshot

Population	808,437
5-Year Population Growth	-2.5%
Median Household Income	$120,000
Vacancy Rate	6.0%
Property Tax Rate	0.68%($8,160/yr)

Investor Takeaway

San Francisco has the lowest cap rates in the country, reflecting its status as a premium global market. Rent control, high prices, and recent population decline make cash flow nearly impossible — this is purely an appreciation and wealth preservation play.

Quick Math

Estimated annual numbers for a median-priced property in San Francisco, CA before financing:

Annual Gross Rent$38,400

Less Vacancy (6.0%)($2,304)

Less Property Tax (0.68%)($8,160)

Less Est. Insurance + Maintenance($24,000)

Estimated NOI$3,936

Implied Cap Rate0.3%

Estimates based on median values. Insurance + maintenance estimated at 2% of home value. Actual results vary by property condition, neighborhood, and management.