Daly City Investment Property Loans
Daly City is a dense, fog-belt city of single-family houses on small lots, and much of it was built for households that needed a second income rather than for a rental market. The median home value is $1,115,941 and the median rent is $2,962, a 3.19% gross yield that supports a 0.41 DSCR at 20% down. A purchase here is a low-leverage hold. The rent has to come from more than one unit on the lot.
Median home value
$1,115,941
Median rent
$2,962/mo
Gross yield
3.19%
DSCR at 20% down
0.41
Modelled at 7.11% on a 30-year fixed. Sources: Zillow ZHVI, August 2026; Zillow ZORI, August 2026; Freddie Mac PMMS 30-year fixed, week of November 12, 2026. Taxes and insurance modelled at 1.25% of value a year.
Daly City prices the lot, and the rent does not follow
Daly City sits directly south of San Francisco, and its housing stock shows it. The city filled in through the middle of the last century with small houses packed close together, many on lots carved out for a garage and a narrow side yard. Density here is not a new planning goal. It is how the city was built, and it is why a buyer can find two households on a parcel that was permitted for one.
At the median the arithmetic is blunt. A $1,115,941 value against $2,962 of monthly rent is a 3.19% gross yield. At the model rate of 7.11%, 20% down means a $223,188 down payment and an $892,753 loan. Principal and interest is $6,006. Taxes and insurance add $1,162. The all-in payment is $7,168, and the rent covers $2,962 of it, so the owner funds $4,206 a month before vacancy, maintenance or HOA dues.
Run the same leverage here and the ratio comes out to 0.41. At 35% down it is 0.49. Neither is close to the 0.75 that most DSCR programs want, and no rate buydown repairs a gap that wide. Reaching 0.75 takes about 62.9% down. Reaching 1.00 takes about 76.0%.
Read those figures as a description of the market rather than a verdict on it. Daly City is not a place where a leveraged single-family purchase pays for itself on one rent. It is a place where the buyer arrives with real equity and a plan for the space below the house.
Daly City turns on the in-law unit, permitted or not
Daly City has a long tradition of converted in-law units, and that is the reason a house here can produce more rent than its price suggests. Lower-level space, a finished garage, a rear addition: the shape of the city's older houses makes a second unit easy to imagine and, in plenty of cases, easy to build without anyone recording it.
An appraiser counts income that is documented and defensible. A unit rented for years under a lease, with its own entrance and its own kitchen, is a different conversation from a room with a hot plate and a curtain. The first can add rent to the appraisal. The second is a liability with a tenant in it.
Whether the unit is legal belongs to the city and the county, not to the listing. Daly City and San Mateo County each have their own rules for second units, and those rules have changed more than once. Before you underwrite a converted unit as income, ask the city whether the work was permitted, what the space is approved for, and what the county records show. Do not take the seller's account of it.
The risk runs the other way too. An unpermitted unit can collect rent for years and can also be ordered vacated, and the cost of bringing it into compliance lands on the owner. Price that possibility into the offer instead of finding it after closing.
Daly City finances on two rents or a large down payment
Take a house at the median with a legal second unit. The main house rents near the citywide median and the second unit adds a smaller amount. If the two together produce $5,376 a month, the property reaches 0.75 at 20% down. That is the rent the model says the payment requires, and it is a little under twice the median rent for a single household.
The distance between $2,962 and $5,376 is the work. It is why a two-unit property, or a house with a unit an appraiser will count, is the version of Daly City that finances. The stock supports it. The prices do not make it automatic.
Small multifamily works the same way at a larger scale. A two-to-four unit building spreads one purchase price across several leases, and the loan is underwritten on the combined rent rather than the largest unit. Those buildings trade less often than houses and the competition for them is local and steady.
The appraisal is where these files are won or lost. A DSCR lender uses the appraiser's opinion of market rent, not your lease, so two units rented below market can appraise at an income the building does not actually collect. That flatters the ratio and hides a real monthly shortfall. Underwrite the collected rent first and treat the appraisal as a second opinion.
The third version is the large down payment. At 62.9% down the median property reaches 0.75 on its own rent, with no second unit in the file. A buyer with that much equity, often from a sale or an exchange, does not need the extra lease. Most Daly City buyers are not that buyer, which is why the second unit conversation comes first.
Daly City carries costs after closing that the model leaves out
The model on this page uses principal, interest, taxes and insurance. HOA dues are not in the denominator, and neither is vacancy. A condominium or townhouse with a monthly assessment changes the ratio before the rent is counted, and a unit that sits empty for a month changes the cash flow. Both belong in your own underwriting even though the page excludes them.
Taxes are the next line that moves. Proposition 13 caps the growth of an assessed value until a sale, and a sale reassesses at the price you paid. A house held by one family for decades carries a tax bill with no relation to what you will owe. Underwrite the post-sale number and expect a supplemental assessment in the first year.
Insurance has repriced across California, and the fog belt is not an exemption from it. Older houses with original wiring, a low roof or a finished lower level are exactly the properties a carrier asks questions about. Get a bound quote during diligence rather than a verbal estimate, then run the payment again with it.
Condition is the last item. The stock here is old enough that a kitchen is not the issue. Foundation work on a sloping lot, a sewer lateral, a roof at the end of its life and a garage conversion finished without permits are the things that decide whether the deal you bought is the deal you underwrote.
The Daly City deal, worked through
A median-priced Daly City rental bought with a DSCR loan at 7.11% and 20% down. Every figure below is arithmetic on the two measured values above, not a quote from a lender.
| Purchase price (median home value) | $1,115,941 |
|---|---|
| Down payment at 20% | $223,188 |
| Loan amount | $892,753 |
| Principal and interest | $6,006/mo |
| Taxes and insurance at 1.25% | $1,162/mo |
| All-in monthly outlay | $7,168/mo |
| Median rent collected | $2,962/mo |
| Monthly cash flow | -$4,206/mo |
| DSCR | 0.41 |
What clears 0.75 in Daly City
At 7.11%, a median-priced Daly City rental needs 62.9% down to reach a 0.75 ratio. Keeping 20% down instead, the rent has to be $5,376 a month rather than $2,962.
What clears 1.00 in Daly City
A full 1.00 ratio takes 76.0% down at the median, or $7,168 a month in rent at 20% down. That is the gap between a Daly City deal that finances and one that waits.
Model assumptions: 7.11% 30-year fixed, 1.25% of value a year for taxes and insurance, no HOA, no vacancy or maintenance in the ratio. A lender uses the appraiser's market rent and adds any HOA dues, so a real file will move.
Where the Daly City rental stock actually sits
Citywide medians hide the decision. These are the areas Daly City investors ask about most, and what to underwrite before you commit to one.
Westlake
A planned district built around a retail core, with houses and small apartment buildings on tightly spaced streets. The fog is a daily fact and the housing is mid-century. Buyers come for the square footage and the freeway access, and they should look at the roof, the windows and whether the lower level was finished with permits.
Broadmoor
A small county pocket inside the Daly City grid, with narrow streets, small lots and a denser feel than the blocks around it. The housing is modest and old and turnover is low. Because it is not administered by the city, the rules for a conversion or an addition are not the ones a Daly City buyer assumes. Ask which jurisdiction you are in.
Original Daly City
The flat, older streets near the Mission corridor, where the city began and the stock is oldest. Single-family houses and small multifamily buildings share the same blocks, often with a unit tucked into the lower level. This is where the two-rent math is easiest to find and where the permit history is most likely to be complicated.
Bayshore
The eastern flat along the freeway, with a mix of older houses, small buildings and industrial edges. It feels less residential than the rest of the city, and it is where a property priced below the citywide median is most likely to appear. Check the noise, the soil and the zoning on the parcel next door before assuming the rent will hold.
Serramonte
Planned tract streets from the postwar build-out, with houses and townhomes on curving roads and a retail core at the center. The stock is more uniform here than elsewhere in the city, and the HOA line appears as soon as you look at a townhouse. Read the association budget and rental rules before you price the unit.
St. Francis Heights
A mid-century district of small houses on regular lots, near the city's southern edge and its commute routes. The houses were built for families and many have been added to over the decades. Look for a legal second unit and for additions that were never recorded, and check the sewer line on the older parcels.
Financing that fits Daly City
DSCR loans
Qualify on the rent a Daly City appraiser supports, not your tax returns.
Fix and flip
Rehab money for Daly City acquisitions, drawn against the work.
Portfolio loans
Blanket several Daly City units under one note instead of one loan each.
Bridge loans
Short-term capital to close a Daly City property before the long-term debt.
Not sure which one fits? Run your Daly City numbers, or send the scenario and Wendy will tell you where a Daly City lender will actually land.
Daly City investment property questions
What is the median home value in Daly City?
The median home value is $1,115,941 and the median rent is $2,962 a month, which is a 3.19% gross yield. Both figures are Zillow's median series for the city. At the 7.11% model rate, that combination produces a 0.41 DSCR at 20% down.
What down payment does a Daly City DSCR loan need?
At the model rate of 7.11% on a median-priced property, 0.75 takes about 62.9% down and 1.00 takes about 76.0%. That is the arithmetic of a $1,115,941 value against $2,962 of rent. A two-unit property with more rent per dollar of price needs less.
What does a Daly City rental cost per month at 20% down?
Principal and interest is $6,006, taxes and insurance add $1,162, and the all-in payment is $7,168 against $2,962 of rent. Cash flow is negative $4,206 a month. The down payment is $223,188 and the loan is $892,753. HOA dues and vacancy sit outside those figures.
Why is the DSCR only 0.41 in Daly City?
Because a 3.19% gross yield cannot carry a 7.11% loan at ordinary leverage. The median rent is $2,962 against an all-in payment of $7,168, so the property runs a $4,206 monthly deficit. The ratio describes the price level, not a flaw in the house.
How much rent does a Daly City property need at 20% down?
At 20% down the property needs $5,376 a month to reach 0.75 and $7,168 to reach 1.00. The citywide median rent is $2,962, so a single rent does not get close. Two units on one lot, or a much larger down payment, is how the gap closes.
Does an in-law unit count as income for a Daly City DSCR loan?
It can, if the unit is permitted and separately leased at a rent the appraiser can support with nearby comparables. A converted space with no permit may still collect rent, but lenders treat it differently and some will not count it at all. Verify the permit history before you offer.
How do I check whether a Daly City in-law unit is legal?
Ask the City of Daly City and San Mateo County for the permit history on the address, and ask what the space is approved for. Rules for second units have changed repeatedly, so an older conversion is neither automatically legal nor automatically a violation. Get the answer in writing before you underwrite the rent.
Do Daly City condos and townhomes work for DSCR?
Sometimes, but the HOA changes the math. Dues enter the DSCR denominator, so an assessment lowers the ratio before rent is considered. The project also has to be acceptable to the lender, and rental caps or pending litigation can narrow the list. Read the association's budget and rules first.
Is Daly City a cash flow market or an appreciation market?
It is an equity market. At the median, the all-in payment is $7,168 against $2,962 of rent, a gap of $4,206 a month at 20% down. Buyers here are placing capital and holding, often with a second unit covering part of the payment. A property that must pay for itself from day one is a different search.
Which costs sit outside these figures?
HOA dues and vacancy stay out of the denominator here, as do maintenance, management and any utility the owner carries. Principal and interest, taxes at 1.25% of value a year and insurance at the same rate are what these figures include. Your property's actual assessment, tax bill and vacancy will move the ratio.
Ready to put a Daly City deal in front of a lender?
Daly City rewards the buyer who counts the second unit before the view. Send the address, the rent each unit collects, and the cash you have, and the model behind this page will show what the property carries at your down payment. On this city's lots, the extra unit matters more than the listing photos.
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