PBB, the one potential flaw is the use of OE Rent. It seems that the number may be influenced by what the owner thinks it’ll rent for and not what they are actually rented for.

For La Jolla, it wouldn’t surprise me that 17x-20X is normal. SFRs, particularly larger SFRs with yards are on the high end of the ratio anyway. The typical 8-13X is more appropriate for small multi-unit dwellings duplex,triplex, fourplex. SFRs are strange beasts since they really aren’t a consistent rental market.

The higher rate is justified by the perceived quality of the cash flow and potential upside or reduced downside of capital preservation and expenses. iow, you’re not expecting your La Jolla rental family to kick holes in the wall, get covered in graffiti or turn in to a meth lab.

On the other hand, I think Condos compete nicely and directly against larger apartment complex units. Hence a rental comparison is more appropriate.