Bakersfield, CA Cap Rate: 4.01% — Rental Property Analysis
Bakersfield is a higher-priced market in the West with a mid-sized city of 410,647. At a 4.01% estimated cap rate, this is a moderate market where rents of $1,760/mo lag behind home prices. With a median home price of $360,000 and steady population growth supports long-term rental demand, Bakersfield 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 $360,000 median price and $1,760/mo median rent
Est. Cap Rate
4.01%
1% Rule
0.49%
Fails
GRM
17.0x
Price / Income
6.3x
Market Data
Median Home Price$360,000
Median Monthly Rent$1,760
Property Tax Rate0.72%
Population410,647
Population Growth0.9% / yr
Median Household Income$56,800
Vacancy Rate5.8%
Annual Appreciation2.6%
2026 Market Update: Bakersfield
Bakersfield's 0.5% rent-to-price ratio is well below the 1% rule. At median prices of $360,000, the $1,760/mo rent produces only $1,202/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 ($72K at 7%) would result in approximately $-713/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 17.0x gross rent multiplier and 5.8% vacancy rate position Bakersfield as a balanced market. With annual appreciation at 2.6%, total returns (cash flow + equity growth) run approximately 6.6% before financing leverage.
Cap Rate Calculator — Bakersfield
Pre-filled with Bakersfield medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
0.72% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
3.35%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$12,059
net operating income
Gross Rent Multiplier
17.0x
High (>15)
1% Rule
0.49%
✗ Fails
Monthly Cash Flow
$1,005
before debt service
Annual Breakdown
Gross Rental Income$21,120
Less Vacancy−$1,225
Effective Income$19,895
Less Operating Expenses−$7,836
Net Operating Income$12,059
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Factor in financing to see your actual return on invested capital in Bakersfield.
$
$90,000
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-8.80%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$100,800
$90,000 down + $10,800 closing
Monthly Mortgage
$1,760
on $270K loan
Monthly Cash Flow
$-739
after all expenses
Annual Cash Flow
$-8,870
before taxes
Cash Flow Breakdown
Monthly Rent$1,760
Less Expenses−$739
Less Mortgage−$1,760
Monthly Cash Flow$-739
Is Bakersfield a Good Place to Invest in Rental Property?
Bakersfield, CA has a population of 410,647 and has been growing at 0.9% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $360,000 paired with median rents of $1,760/mo produces an estimated cap rate of 4.01%.
Property taxes at 0.72% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 5.8% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 6.3x, homes cost about 6.3 times the local median income of $56,800. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. Home values have appreciated at roughly 2.6% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Bakersfield presents moderate opportunities. Cap rates near 4.01% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.
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