Sometimes Zillow is woefully inaccurate
I recently purchased a rental for under $35K. I'm just now starting to rehab it. I'll likely put about $15K into it and rent it for $750. Anyway, I was looking at it on Zillow yesterday and the zestimate was for over $152K. Rental estimate was for $890.
Still I find zillow a valuable tool since it is much less clunky than the MLS and it usually provides excellent sold information. However, you have to take the zestimate with a grain of salt, sometimes a huge grain of salt.
The rental estimate also was significantly more in error than Zillow normally is. I've found that Zillow is usually fairly accurate in rental amounts, but this one was 20% off of the mark.
Bottomline- Don't base any investment decisions on zillow simply use it as a one tool among several (MLS being the best) to help determine value.