Abilene, TX Cap Rate: 7.24% — Rental Property Analysis
Abilene is a budget-friendly market in the South with a small but investable metro of 50,000. At a 7.24% estimated cap rate, this is a high-yield market where rents of $1,770/mo lag behind home prices. With a median home price of $205,000 and steady population growth supports long-term rental demand, Abilene stands out as a market worth serious analysis for rental investors.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
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Strong investment fundamentals
Based on $205,000 median price and $1,770/mo median rent
Est. Cap Rate
7.24%
1% Rule
0.86%
Fails
GRM
9.7x
Price / Income
3.2x
Market Data
Median Home Price$205,000
Median Monthly Rent$1,770
Property Tax Rate1.72%
Population50,000
Population Growth1.8% / yr
Median Household Income$63,735
Vacancy Rate5.8%
Annual Appreciation2.7%
2026 Market Update: Abilene
At a 0.9% rent-to-price ratio, Abilene falls just below the 1% rule threshold. A median-priced property at $205,000 with $1,770/mo rent yields approximately $1,237/mo in NOI — workable with favorable financing but not a slam-dunk cash flow market.
On a conventional loan with 20% down ($41K) at 7%, estimated monthly cash flow is $146 — a thin 4.3% cash-on-cash return. Investors should negotiate below asking price or target properties with above-median rents to build a meaningful cash flow buffer.
With 1.8% annual population growth paired with 2.7% home appreciation, Abilene offers a rare combination of current cash flow and future equity upside. The 9.7x gross rent multiplier suggests the market hasn't fully priced in this growth trajectory.
Cap Rate Calculator — Abilene
Pre-filled with Abilene medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
1.72% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
5.77%Moderate
Net Operating Income ÷ Purchase Price
NOI / Year
$11,836
net operating income
Gross Rent Multiplier
9.7x
Good (<15)
1% Rule
0.86%
✗ Fails
Monthly Cash Flow
$986
before debt service
Annual Breakdown
Gross Rental Income$21,240
Less Vacancy−$1,232
Effective Income$20,008
Less Operating Expenses−$8,172
Net Operating Income$11,836
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Factor in financing to see your actual return on invested capital in Abilene.
$
$51,250
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
0.52%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$57,400
$51,250 down + $6,150 closing
Monthly Mortgage
$1,002
on $154K loan
Monthly Cash Flow
$25
after all expenses
Annual Cash Flow
$296
before taxes
Cash Flow Breakdown
Monthly Rent$1,770
Less Expenses−$743
Less Mortgage−$1,002
Monthly Cash Flow$25
Is Abilene a Good Place to Invest in Rental Property?
Abilene, TX has a population of 50,000 and has been growing at 1.8% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $205,000 paired with median rents of $1,770/mo produces an estimated cap rate of 7.24%.
Property taxes at 1.72% are notably high and represent a significant drag on cash flow — model this expense carefully, as it can make or break a deal. The vacancy rate of 5.8% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 3.2x, homes cost about 3.2 times the local median income of $63,735. This relatively affordable ratio suggests a deep pool of renters who find buying out of reach, supporting rental demand. Home values have appreciated at roughly 2.7% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Abilene offers attractive fundamentals for rental investors. Strong population growth, and cap rates above 6% put it in the upper tier of investable markets.
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