Baton Rouge, LA Cap Rate: 4.95% — Rental Property Analysis
Baton Rouge is a budget-friendly market in the South with a mid-sized city of 224,149. At a 4.95% estimated cap rate, this is a moderate market where rents of $1,350/mo lag behind home prices. With a median home price of $240,000 and population is roughly stable, Baton Rouge 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
◈
Moderate — source deals carefully
Based on $240,000 median price and $1,350/mo median rent
Est. Cap Rate
4.95%
1% Rule
0.56%
Fails
GRM
14.8x
Price / Income
5.0x
Market Data
Median Home Price$240,000
Median Monthly Rent$1,350
Property Tax Rate0.56%
Population224,149
Population Growth0.5% / yr
Median Household Income$48,200
Vacancy Rate6.5%
Annual Appreciation2.3%
2026 Market Update: Baton Rouge
Baton Rouge's 0.6% rent-to-price ratio is well below the 1% rule. At median prices of $240,000, the $1,350/mo rent produces only $990/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 ($48K at 7%) would result in approximately $-287/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 14.8x gross rent multiplier and 6.5% vacancy rate position Baton Rouge as a balanced market. With annual appreciation at 2.3%, total returns (cash flow + equity growth) run approximately 7.3% before financing leverage.
Cap Rate Calculator — Baton Rouge
Pre-filled with Baton Rouge medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
0.56% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
4.14%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$9,927
net operating income
Gross Rent Multiplier
14.8x
Good (<15)
1% Rule
0.56%
✗ Fails
Monthly Cash Flow
$827
before debt service
Annual Breakdown
Gross Rental Income$16,200
Less Vacancy−$1,053
Effective Income$15,147
Less Operating Expenses−$5,220
Net Operating Income$9,927
Sponsored
Analyze Deals Faster with DealCheck
Import any property, get instant investment analysis — cap rates, cash flow, rehab estimates, and offer calculations. Used by 350,000+ investors.
Factor in financing to see your actual return on invested capital in Baton Rouge.
$
$60,000
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-6.97%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$67,200
$60,000 down + $7,200 closing
Monthly Mortgage
$1,173
on $180K loan
Monthly Cash Flow
$-390
after all expenses
Annual Cash Flow
$-4,686
before taxes
Cash Flow Breakdown
Monthly Rent$1,350
Less Expenses−$567
Less Mortgage−$1,173
Monthly Cash Flow$-390
Is Baton Rouge a Good Place to Invest in Rental Property?
Baton Rouge, LA has a population of 224,149 and has been growing at 0.5% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $240,000 paired with median rents of $1,350/mo produces an estimated cap rate of 4.95%.
Property taxes at 0.56% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 6.5% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 5.0x, homes cost about 5.0 times the local median income of $48,200. This moderate ratio indicates a balanced rent-vs-buy market. 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: Baton Rouge presents moderate opportunities. Cap rates near 4.95% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.
Sponsored
Get AI-Powered Property Insights
Homesage.ai analyzes 140 million properties with AI — spot hidden deals, assess property condition, and find investment opportunities. Free to try.