I may have said cap rate, in reality I did a quick rule of thumb GRM (Gross Rent Multiplier).

In the OC, they matched up (GRM in the 8-13 range based on quality) for most of the 1990s.

In fact, the first townhome I bought in California, I bought at 8X the equivalent rent multiplier as a residence.

It’s a matter of time before rental properties fall back to fundamentals. The investment rental market has been distorted even more than the housing market by speculators thinking they’ll flip it in a year or two for mega profit.

Condo’s won’t continue to sell at $400K, in fact won’t sell for much more than $200K if they can be rented for $1200. Condos are just apartments that you’ve leased for 30 years where you get to do your own maintenance and taxes.