Brownsville, TX Cap Rate: 5.33% — Rental Property Analysis
Brownsville is a budget-friendly market in the South with a mid-sized city of 189,000. At a 5.33% estimated cap rate, this is a moderate market where rents of $1,420/mo lag behind home prices. With a median home price of $205,000 and steady population growth supports long-term rental demand, Brownsville 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 $205,000 median price and $1,420/mo median rent
Est. Cap Rate
5.33%
1% Rule
0.69%
Fails
GRM
12.0x
Price / Income
5.3x
Market Data
Median Home Price$205,000
Median Monthly Rent$1,420
Property Tax Rate1.64%
Population189,000
Population Growth0.8% / yr
Median Household Income$38,400
Vacancy Rate6.5%
Annual Appreciation2%
2026 Market Update: Brownsville
Brownsville's 0.7% rent-to-price ratio is well below the 1% rule. At median prices of $205,000, the $1,420/mo rent produces only $911/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 ($41K at 7%) would result in approximately $-180/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.
Property taxes consume 20% of gross rent here — one of the highest ratios in our dataset. This significantly compresses margins and makes Brownsville a market where tax-conscious underwriting is essential. Every deal should be stress-tested with potential assessment increases.
Cap Rate Calculator — Brownsville
Pre-filled with Brownsville medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
1.64% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
4.24%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$8,684
net operating income
Gross Rent Multiplier
12.0x
Good (<15)
1% Rule
0.69%
✗ Fails
Monthly Cash Flow
$724
before debt service
Annual Breakdown
Gross Rental Income$17,040
Less Vacancy−$1,108
Effective Income$15,932
Less Operating Expenses−$7,248
Net Operating Income$8,684
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Factor in financing to see your actual return on invested capital in Brownsville.
$
$51,250
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-3.73%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
$-178
after all expenses
Annual Cash Flow
$-2,140
before taxes
Cash Flow Breakdown
Monthly Rent$1,420
Less Expenses−$596
Less Mortgage−$1,002
Monthly Cash Flow$-178
Is Brownsville a Good Place to Invest in Rental Property?
Brownsville, TX has a population of 189,000 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 $205,000 paired with median rents of $1,420/mo produces an estimated cap rate of 5.33%.
Property taxes at 1.64% 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 6.5% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 5.3x, homes cost about 5.3 times the local median income of $38,400. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 2% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Brownsville presents moderate opportunities. Cap rates near 5.33% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.
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