Auburn, AL Cap Rate: 4.20% — Rental Property Analysis
Auburn is a mid-range market in the South with a small but investable metro of 50,000. At a 4.20% estimated cap rate, this is a moderate market where rents of $1,640/mo lag behind home prices. With a median home price of $340,000 and steady population growth supports long-term rental demand, Auburn offers opportunities for investors who source deals carefully.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
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Moderate — source deals carefully
Based on $340,000 median price and $1,640/mo median rent
Est. Cap Rate
4.20%
1% Rule
0.48%
Fails
GRM
17.3x
Price / Income
6.9x
Market Data
Median Home Price$340,000
Median Monthly Rent$1,640
Property Tax Rate0.42%
Population50,000
Population Growth0.8% / yr
Median Household Income$49,614
Vacancy Rate6.4%
Annual Appreciation2.3%
2026 Market Update: Auburn
Auburn's 0.5% rent-to-price ratio is well below the 1% rule. At median prices of $340,000, the $1,640/mo rent produces only $1,189/mo in NOI. Investors here need to target below-median properties or pursue value-add strategies to make the numbers work.
At current rates, a 20% down conventional loan ($68K at 7%) would result in approximately $-620/mo cash flow — negative at median prices. Larger down payments, seller financing, or buying 15–25% below median are strategies to turn the numbers positive.
The 17.3x gross rent multiplier and 6.4% vacancy rate position Auburn as a balanced market. With annual appreciation at 2.3%, total returns (cash flow + equity growth) run approximately 6.5% before financing leverage.
Cap Rate Calculator — Auburn
Pre-filled with Auburn medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
0.42% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
3.56%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$12,096
net operating income
Gross Rent Multiplier
17.3x
High (>15)
1% Rule
0.48%
✗ Fails
Monthly Cash Flow
$1,008
before debt service
Annual Breakdown
Gross Rental Income$19,680
Less Vacancy−$1,260
Effective Income$18,420
Less Operating Expenses−$6,324
Net Operating Income$12,096
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Factor in financing to see your actual return on invested capital in Auburn.
$
$85,000
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-8.97%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$95,200
$85,000 down + $10,200 closing
Monthly Mortgage
$1,662
on $255K loan
Monthly Cash Flow
$-711
after all expenses
Annual Cash Flow
$-8,537
before taxes
Cash Flow Breakdown
Monthly Rent$1,640
Less Expenses−$689
Less Mortgage−$1,662
Monthly Cash Flow$-711
Is Auburn a Good Place to Invest in Rental Property?
Auburn, AL has a population of 50,000 and has been growing at 0.8% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $340,000 paired with median rents of $1,640/mo produces an estimated cap rate of 4.20%.
Property taxes at 0.42% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 6.4% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 6.9x, homes cost about 6.9 times the local median income of $49,614. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. Home values have appreciated at roughly 2.3% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Auburn presents moderate opportunities. Cap rates near 4.20% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.
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