Cap rate (capitalization rate) is net operating income divided by purchase price. It tells you the unleveraged return a property generates. A $300,000 property producing $18,000 NOI has a 6% cap rate. It's the most common metric for comparing rental properties because it strips out financing and gives you an apples-to-apples comparison.

What is a good cap rate for rental property?

For residential rentals, 5-8% is generally considered solid. Above 8% is excellent but often comes with higher risk (rougher neighborhoods, older buildings, declining markets). Below 5% is common in expensive metros where investors rely more on appreciation than cash flow.

How is cap rate different from cash-on-cash return?

Cap rate ignores financing — it measures the property's return as if you paid all cash. Cash-on-cash return measures your actual return on the cash you invested, factoring in your mortgage. A property with a 6% cap rate could yield a 12% cash-on-cash return with leverage.

What is the 1% rule in real estate?

The 1% rule says monthly rent should be at least 1% of the purchase price. A $200,000 property should rent for at least $2,000/month. It's a quick screening tool — many successful rentals don't pass the 1% rule, especially in higher-priced markets.

What is the BRRRR strategy?

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. You buy a distressed property below market value, renovate it, rent it out, then do a cash-out refinance based on the new appraised value to pull out most or all of your original capital and repeat the process.

Where does CapRateCity get its data?

Our city-level data draws from publicly available sources including U.S. Census Bureau population and income figures, Zillow Home Value Index for median prices, HUD Fair Market Rents, and state/county tax assessor records. Data is updated periodically.

Which city ranks #1 for best cities $250k-$350k?

Clewiston, FL tops this ranking with 6.6% cap rate. With a median home price of $275,000 and median rent of $1,990/mo, it offers strong cash flow fundamentals. The full Clewiston analysis page includes interactive calculators pre-filled with the city's medians.

How does this ranking compare to the national average?

Across these 30 cities, the average cap rate is 5.2% versus 3.8% nationally. Average median price is $273,333 (vs. $333,419 nationally) and average median rent is $1,659/mo. 0 of 30 cities on this list pass the 1% rule (monthly rent ≥ 1% of purchase price).

What's the lowest-ranked city on this list?

Daytona Beach, FL closes out the list at position #30 with 4.6% cap rate. Even cities at the bottom of a top-30 ranking still represent the strongest markets in their category nationally — the entire list is a curated subset of the 775+ US markets we track.

CapRateCity

The Rankings · Best Cities $250K-$350K

Best Rental Cities in the $250K-$350K Range (2026)

The $250K-$350K range puts you in established neighborhoods of growing metros — typically newer construction, better school districts, and higher-quality tenants. Cap rates are lower than bargain markets, but the stability premium is real.

By Jake McEwen·Updated April 26, 2026·30 cities analyzed

Best Cities $250K-$350K — top US rental markets ranked, with Clewiston, FL leading at 6.6% cap rate — Best Cities $250K-$350K — top markets card · CapRateCity

Key Takeaways

These 30 cities represent the top-performing markets based on cap rate. Clewiston, FL leads the ranking with 6.6% cap rate at a $275K median price. Even Daytona Beach, FL at #30 shows 4.6% — still a competitive market.

Across this ranking, the average cap rate is 5.22% (vs 3.81% nationally), average prices are $273K (vs $333K nationally), and average rents are $1,659/mo. Prices in this ranking are 18% below the national average — lower barriers to entry for new investors.

Geographic distribution: the South (25 cities), the Northeast (2 cities), the West (2 cities), the Midwest (1 cities). The South dominates this ranking — investors in other regions may need to look at out-of-state investing.

1

Clewiston, FL6.6% cap rate

$275K median$1,990/mo rent6.6% cap rate1.9% growth

→

2

Safford, AZ6.0% cap rate

$295K median$1,920/mo rent6.0% cap rate1.6% growth

→

3

Hinesville, GA5.8% cap rate

$255K median$1,710/mo rent5.8% cap rate0.9% growth

→

4

Duluth, MN5.8% cap rate

$250K median$1,680/mo rent5.8% cap rate0.2% growth

→

5

New Orleans, LA5.6% cap rate

$255K median$1,580/mo rent5.6% cap rate0.4% growth

→

6

Columbia, SC5.6% cap rate

$250K median$1,540/mo rent5.6% cap rate0.8% growth

→

7

Cullman, AL5.6% cap rate

$250K median$1,510/mo rent5.6% cap rate0.8% growth

→

8

Punta Gorda, FL5.6% cap rate

$295K median$1,870/mo rent5.6% cap rate1.9% growth

→

9

Homosassa Springs, FL5.5% cap rate

$270K median$1,690/mo rent5.5% cap rate1.9% growth

→

10

Fairbanks, AK5.4% cap rate

$295K median$1,900/mo rent5.4% cap rate0.1% growth

→

11

Lakeland, FL5.4% cap rate

$295K median$1,830/mo rent5.4% cap rate2.1% growth

→

12

Blacksburg, VA5.4% cap rate

$280K median$1,730/mo rent5.4% cap rate0.7% growth

→

13

Warner Robins, GA5.4% cap rate

$250K median$1,570/mo rent5.4% cap rate1% growth

→

14

New Bern, NC5.3% cap rate

$255K median$1,550/mo rent5.3% cap rate1.5% growth

→

15

Sanford, NC5.2% cap rate

$290K median$1,720/mo rent5.2% cap rate1.5% growth

→

16

Hoover, AL5.1% cap rate

$255K median$1,410/mo rent5.1% cap rate1.2% growth

→

17

Ocala, FL5.1% cap rate

$270K median$1,600/mo rent5.1% cap rate2.4% growth

→

18

Marion, NC5.0% cap rate

$250K median$1,440/mo rent5.0% cap rate1.5% growth

→

19

Birmingham, AL5.0% cap rate

$255K median$1,410/mo rent5.0% cap rate0.3% growth

→

20

Elizabeth City, NC4.9% cap rate

$260K median$1,490/mo rent4.9% cap rate1.5% growth

→

21

Fayetteville, NC4.9% cap rate

$255K median$1,480/mo rent4.9% cap rate0.8% growth

→

22

Lake City, FL4.9% cap rate

$265K median$1,520/mo rent4.9% cap rate1.9% growth

→

23

Calhoun, GA4.9% cap rate

$275K median$1,610/mo rent4.9% cap rate0.9% growth

→

24

Pensacola, FL4.8% cap rate

$305K median$1,720/mo rent4.8% cap rate1% growth

→

25

East Stroudsburg, PA4.8% cap rate

$300K median$1,850/mo rent4.8% cap rate0.2% growth

→

26

Odessa, TX4.8% cap rate

$250K median$1,610/mo rent4.8% cap rate1.8% growth

→

27

Cookeville, TN4.7% cap rate

$285K median$1,550/mo rent4.7% cap rate1.6% growth

→

28

Syracuse, NY4.7% cap rate

$250K median$1,620/mo rent4.7% cap rate-0.2% growth

→

29

Palm Bay, FL4.6% cap rate

$340K median$1,890/mo rent4.6% cap rate2.2% growth

→

30

Daytona Beach, FL4.6% cap rate

$325K median$1,790/mo rent4.6% cap rate1.5% growth

→

Sponsored · Want to analyze a specific property? DealCheck imports real listing data and runs the full analysis for you.

Try Free →

How to Use This Ranking

These 30 markets represent the strongest cash flow opportunities in our database of 775+ cities. High cap rate markets typically feature lower home prices (avg $273K here vs $333K nationally), which means lower barriers to entry — but they often come with slower appreciation and may require more active management. The sweet spot is cities that combine strong cap rates with positive population growth, suggesting sustained tenant demand.

Next steps: Click any city above to see its full analysis page with interactive cap rate and cash-on-cash calculators pre-filled with local data. Browse our full markets index, or explore the interactive cap rate map to visualize these markets geographically.

For a comprehensive market selection framework, read our guide on how to analyze a rental property in 15 minutes or what makes a good cap rate.

Frequently Asked Questions

How is this ranking calculated?

This ranking is based on cap rate calculated from median home prices, rents, property taxes, insurance, maintenance, and vacancy rates for each city. We track 300+ US markets and rank them using publicly available housing data. Cap rate = Net Operating Income / Purchase Price. All calculations assume standard expense ratios and can be customized on each city's page.

Which city ranks #1?

Clewiston, FL tops this ranking with 6.6% cap rate. With a median home price of $275K and rent of $1,990/mo, it offers strong cash flow fundamentals. Visit the Clewiston page for a full analysis with interactive calculators.

Should I invest in the #1 ranked city?

Not necessarily. Rankings show which cities have the strongest metrics, but the best investment depends on your strategy, budget, risk tolerance, and whether you're investing locally or remotely. A city that ranks #1 on cap rate might have slower growth or higher management challenges. Use this ranking as a starting point, then dive into individual city pages to model specific deals.

How often is this data updated?

Our data reflects 2026 estimates based on the latest available median prices, rents, and economic indicators. Market conditions change — use the interactive calculators on each city page to input current asking prices and rents for any property you're evaluating. The rankings are recalculated with each site update.

More Rankings

Highest Cap Rate Cities →Best Cash Flow Cities →Cheapest Rental Markets →Fastest Growing Markets →Lowest Property Tax Cities →Lowest Vacancy Cities →

The CapRateCity Report

Weekly market analysis: highest cap rate cities, emerging markets, and deal breakdowns. Free, no spam.