CapRateCity · Vol. II No. 32Established 2025775 US Markets Tracked
CapRateCity
An independent investor's notebook on US rental markets.

Below 3% Cap Rate Cities

By Jake McEwen · Updated · 243 cities in this tier

Cities with cap rates below 3% — appreciation-driven markets where cash flow is difficult at median prices. We track 243 cities in this range.

Above 8%7% – 8%6% – 7%5% – 6%4% – 5%3% – 4%Below 3%
2.4%
Avg Cap Rate
$470K
Avg Price
$1,716/mo
Avg Rent
243
Cities

Understanding Below 3% Cap Rate Markets

Cities in the below 3% cap rate range represent appreciation-focused markets where cash flow is secondary to equity growth. The 243 cities in this tier have an average home price of $470K and average rents of $1,716/mo. Prices are 41% above the national average, reflecting the premium paid for markets with stronger fundamentals or growth prospects.

The top performer in this tier is Kahului, HI with a 3.0% cap rate at $990K. The most affordable entry is Tiffin, OH at $165K. For growth, Frisco, TX leads with 4.2% annual population growth.

Property taxes average 1.17% in this tier, in line with the 1.08% national average. Vacancy rates average 5.1%, and population growth averages 1.02% annually. Positive growth supports sustained rental demand and long-term appreciation.

Below 3% cap rates, the investment thesis shifts to appreciation and equity growth. If you invest in this tier, ensure you can sustain negative or minimal cash flow, or use strategies like house hacking to make the numbers work.

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How This Tier Compares

Tier
Cities
Avg Cap Rate
Avg Price
Below 3% (this tier)
243
2.4%
$470K
4% – 5%
157
4.4%
$260K
3% – 4%
227
3.4%
$332K

All 243 Cities (Below 3%)

1
Kahului, HI3.0% cap rate
$990K median$3,510/mo rent0.28% tax0.2% growth
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2
Peoria, AZ3.0% cap rate
$445K median$1,720/mo rent0.62% tax1.8% growth
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3
Morehead City, NC3.0% cap rate
$465K median$1,870/mo rent0.78% tax1.5% growth
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4
Dublin, OH3.0% cap rate
$320K median$1,480/mo rent1.54% tax1.5% growth
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5
Greeneville, TN3.0% cap rate
$245K median$960/mo rent0.65% tax1.6% growth
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6
Williamsport, PA3.0% cap rate
$225K median$1,030/mo rent1.38% tax0.2% growth
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7
Monroe, MI3.0% cap rate
$260K median$1,210/mo rent1.46% tax0.3% growth
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8
Mesa, AZ3.0% cap rate
$445K median$1,720/mo rent0.63% tax1.6% growth
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9
St. Joseph, MO3.0% cap rate
$205K median$910/mo rent1.25% tax0.5% growth
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10
Tempe, AZ3.0% cap rate
$445K median$1,720/mo rent0.64% tax1.2% growth
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11
Phoenix, AZ2.9% cap rate
$445K median$1,720/mo rent0.62% tax1.5% growth
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12
Glendale, AZ2.9% cap rate
$445K median$1,720/mo rent0.64% tax1.2% growth
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13
Austin, MN2.9% cap rate
$195K median$830/mo rent1.12% tax0.5% growth
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14
Glens Falls, NY2.9% cap rate
$295K median$1,430/mo rent1.71% tax0% growth
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15
Warsaw, IN2.9% cap rate
$275K median$1,110/mo rent0.84% tax0.9% growth
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16
Boston, MA2.9% cap rate
$715K median$3,100/mo rent1.19% tax0.3% growth
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17
Lawrence, KS2.9% cap rate
$325K median$1,450/mo rent1.36% tax0.8% growth
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18
Mason City, IA2.9% cap rate
$190K median$880/mo rent1.51% tax0.4% growth
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19
Muscatine, IA2.9% cap rate
$190K median$880/mo rent1.51% tax0.4% growth
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20
Iowa City, IA2.9% cap rate
$290K median$1,320/mo rent1.48% tax0.6% growth
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21
Nacogdoches, TX2.9% cap rate
$210K median$1,010/mo rent1.72% tax1.8% growth
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22
Brockton, MA2.9% cap rate
$715K median$3,100/mo rent1.22% tax0.3% growth
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23
York, PA2.9% cap rate
$300K median$1,360/mo rent1.38% tax0.1% growth
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24
Norwich, CT2.9% cap rate
$400K median$1,880/mo rent1.63% tax0% growth
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25
Medford, OR2.9% cap rate
$430K median$1,740/mo rent0.92% tax1% growth
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26
Clinton, IA2.9% cap rate
$170K median$780/mo rent1.51% tax0.4% growth
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27
Lebanon, PA2.9% cap rate
$305K median$1,370/mo rent1.38% tax0.2% growth
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28
Elk Grove, CA2.9% cap rate
$575K median$2,210/mo rent0.72% tax1.2% growth
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29
Portland, ME2.9% cap rate
$520K median$2,250/mo rent1.3% tax0.6% growth
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30
Hudson, NY2.9% cap rate
$455K median$2,180/mo rent1.71% tax0% growth
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31
Columbus, OH2.9% cap rate
$320K median$1,480/mo rent1.56% tax1.2% growth
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32
Klamath Falls, OR2.9% cap rate
$305K median$1,230/mo rent0.94% tax1% growth
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33
Selinsgrove, PA2.9% cap rate
$230K median$1,030/mo rent1.38% tax0.2% growth
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34
Wilmington, NC2.9% cap rate
$435K median$1,690/mo rent0.76% tax1.8% growth
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35
Ontario, OR2.9% cap rate
$365K median$1,470/mo rent0.94% tax1% growth
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36
Frederick, MD2.9% cap rate
$570K median$2,330/mo rent1.02% tax1.2% growth
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37
Mansfield, OH2.9% cap rate
$190K median$890/mo rent1.58% tax0.2% growth
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38
Cary, NC2.9% cap rate
$430K median$1,650/mo rent0.77% tax2.4% growth
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39
Fremont, NE2.9% cap rate
$235K median$1,090/mo rent1.62% tax0.7% growth
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40
Fort Collins, CO2.9% cap rate
$545K median$1,970/mo rent0.5% tax1.5% growth
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41
Sacramento, CA2.9% cap rate
$575K median$2,210/mo rent0.74% tax1% growth
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42
Port Angeles, WA2.8% cap rate
$485K median$1,940/mo rent0.93% tax1.1% growth
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43
Yonkers, NY2.8% cap rate
$705K median$3,260/mo rent1.65% tax0.2% growth
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44
Raleigh, NC2.8% cap rate
$430K median$1,650/mo rent0.78% tax2.1% growth
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45
Omaha, NE2.8% cap rate
$300K median$1,390/mo rent1.65% tax0.8% growth
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46
Gillette, WY2.8% cap rate
$320K median$1,190/mo rent0.61% tax0.8% growth
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47
Pullman, WA2.8% cap rate
$320K median$1,270/mo rent0.93% tax1.1% growth
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48
Dickinson, ND2.8% cap rate
$310K median$1,250/mo rent0.98% tax1% growth
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49
Carson City, NV2.8% cap rate
$485K median$1,770/mo rent0.56% tax2.2% growth
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50
Pittsfield, MA2.8% cap rate
$375K median$1,580/mo rent1.19% tax0.3% growth
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51
Anchorage, AK2.8% cap rate
$410K median$1,680/mo rent1.04% tax0.1% growth
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52
Mount Vernon, OH2.8% cap rate
$275K median$1,270/mo rent1.58% tax0.2% growth
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53
Frankfort, IN2.8% cap rate
$215K median$840/mo rent0.84% tax0.9% growth
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54
Fairfield, IA2.8% cap rate
$180K median$810/mo rent1.51% tax0.4% growth
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55
Meridian, ID2.8% cap rate
$485K median$1,760/mo rent0.62% tax3.8% growth
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56
Boone, NC2.8% cap rate
$490K median$1,880/mo rent0.78% tax1.5% growth
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57
Holland, MI2.8% cap rate
$335K median$1,500/mo rent1.46% tax0.3% growth
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58
Albany, OR2.8% cap rate
$405K median$1,600/mo rent0.94% tax1% growth
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59
Wahpeton, ND2.8% cap rate
$215K median$860/mo rent0.98% tax1% growth
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60
Sonora, CA2.8% cap rate
$385K median$1,460/mo rent0.75% tax0.8% growth
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61
Aberdeen, SD2.8% cap rate
$230K median$960/mo rent1.2% tax1.4% growth
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62
Huntsville, TX2.8% cap rate
$270K median$1,260/mo rent1.72% tax1.8% growth
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63
Boise, ID2.8% cap rate
$485K median$1,760/mo rent0.63% tax2.5% growth
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64
Albany, NY2.7% cap rate
$350K median$1,610/mo rent1.68% tax0.2% growth
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65
Washington, DC2.7% cap rate
$570K median$2,330/mo rent1.1% tax0.9% growth
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66
Flagstaff, AZ2.7% cap rate
$615K median$2,250/mo rent0.66% tax1% growth
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67
Boise City, ID2.7% cap rate
$485K median$1,760/mo rent0.64% tax2.6% growth
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68
Gardnerville Ranchos, NV2.7% cap rate
$680K median$2,440/mo rent0.56% tax2.2% growth
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69
Honolulu, HI2.7% cap rate
$845K median$2,800/mo rent0.28% tax0.2% growth
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70
Urban Honolulu, HI2.7% cap rate
$845K median$2,800/mo rent0.28% tax0.2% growth
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71
Manhattan, KS2.7% cap rate
$260K median$1,110/mo rent1.34% tax0.6% growth
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72
Nampa, ID2.7% cap rate
$485K median$1,760/mo rent0.65% tax3.2% growth
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73
St. George, UT2.7% cap rate
$525K median$1,870/mo rent0.55% tax3.5% growth
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74
Breckenridge, CO2.7% cap rate
$975K median$3,440/mo rent0.51% tax1.3% growth
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75
Richmond, KY2.7% cap rate
$260K median$990/mo rent0.81% tax0.8% growth
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76
Kennewick, WA2.7% cap rate
$435K median$1,680/mo rent0.9% tax1.5% growth
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77
Rock Springs, WY2.7% cap rate
$285K median$1,030/mo rent0.61% tax0.8% growth
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78
Roseburg, OR2.7% cap rate
$340K median$1,320/mo rent0.94% tax1% growth
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79
New York, NY2.7% cap rate
$705K median$3,260/mo rent1.71% tax0% growth
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80
Emporia, KS2.7% cap rate
$180K median$770/mo rent1.38% tax0.7% growth
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81
Schenectady, NY2.7% cap rate
$350K median$1,610/mo rent1.7% tax0.1% growth
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82
Torrington, CT2.7% cap rate
$405K median$1,820/mo rent1.63% tax0% growth
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83
La Grande, OR2.7% cap rate
$320K median$1,230/mo rent0.94% tax1% growth
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84
Chambersburg, PA2.7% cap rate
$280K median$1,200/mo rent1.38% tax0.2% growth
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85
Key West, FL2.6% cap rate
$935K median$3,530/mo rent0.86% tax1.9% growth
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86
Bismarck, ND2.6% cap rate
$345K median$1,330/mo rent0.96% tax1% growth
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87
Walla Walla, WA2.6% cap rate
$405K median$1,540/mo rent0.93% tax1.1% growth
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88
Greeley, CO2.6% cap rate
$495K median$1,710/mo rent0.52% tax1.8% growth
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89
St. Cloud, MN2.6% cap rate
$305K median$1,210/mo rent1.12% tax0.5% growth
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90
Mount Vernon, WA2.6% cap rate
$575K median$2,180/mo rent0.93% tax1.1% growth
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91
Corvallis, OR2.6% cap rate
$545K median$2,060/mo rent0.94% tax0.5% growth
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92
Frisco, TX2.6% cap rate
$360K median$1,630/mo rent1.8% tax4.2% growth
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93
Olympia, WA2.6% cap rate
$525K median$1,990/mo rent0.94% tax0.8% growth
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94
McKinney, TX2.6% cap rate
$360K median$1,630/mo rent1.78% tax3.5% growth
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95
Des Moines, IA2.6% cap rate
$290K median$1,260/mo rent1.52% tax0.7% growth
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96
Denton, TX2.6% cap rate
$360K median$1,630/mo rent1.76% tax2.8% growth
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97
Bennington, VT2.6% cap rate
$360K median$1,550/mo rent1.59% tax0.3% growth
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98
Lincoln, NE2.6% cap rate
$295K median$1,290/mo rent1.62% tax0.9% growth
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99
Williston, ND2.6% cap rate
$340K median$1,300/mo rent0.98% tax1% growth
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100
Shelton, WA2.6% cap rate
$445K median$1,670/mo rent0.93% tax1.1% growth
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101
Plano, TX2.6% cap rate
$360K median$1,630/mo rent1.82% tax1.6% growth
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102
Minot, ND2.6% cap rate
$260K median$990/mo rent0.98% tax1% growth
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103
Yakima, WA2.6% cap rate
$345K median$1,290/mo rent0.93% tax1.1% growth
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104
Idaho Falls, ID2.5% cap rate
$405K median$1,410/mo rent0.64% tax1.8% growth
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105
Fort Worth, TX2.5% cap rate
$360K median$1,630/mo rent1.79% tax2.4% growth
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106
Arlington, TX2.5% cap rate
$360K median$1,630/mo rent1.77% tax1.3% growth
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107
Owatonna, MN2.5% cap rate
$290K median$1,130/mo rent1.12% tax0.5% growth
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108
Dallas, TX2.5% cap rate
$360K median$1,630/mo rent1.8% tax1.8% growth
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109
Warwick, RI2.5% cap rate
$505K median$2,090/mo rent1.4% tax0.1% growth
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110
Santa Fe, NM2.5% cap rate
$545K median$1,940/mo rent0.75% tax0.4% growth
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111
Gainesville, TX2.5% cap rate
$310K median$1,380/mo rent1.72% tax1.8% growth
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112
Providence, RI2.5% cap rate
$505K median$2,090/mo rent1.42% tax0.2% growth
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113
Cranston, RI2.5% cap rate
$505K median$2,090/mo rent1.44% tax0.2% growth
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114
Sparks, NV2.5% cap rate
$560K median$1,890/mo rent0.58% tax1.5% growth
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115
Reno, NV2.5% cap rate
$560K median$1,890/mo rent0.6% tax1.8% growth
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116
Angola, IN2.4% cap rate
$305K median$1,100/mo rent0.84% tax0.9% growth
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117
North Platte, NE2.4% cap rate
$215K median$920/mo rent1.62% tax0.7% growth
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118
Salem, OR2.4% cap rate
$445K median$1,640/mo rent0.95% tax0.8% growth
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119
Tiffin, OH2.4% cap rate
$165K median$710/mo rent1.58% tax0.2% growth
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120
Spokane Valley, WA2.4% cap rate
$410K median$1,490/mo rent0.92% tax1.5% growth
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121
Stamford, CT2.4% cap rate
$655K median$2,730/mo rent1.55% tax0.3% growth
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122
Camden, NJ2.4% cap rate
$375K median$1,860/mo rent2.28% tax0.1% growth
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123
Kalispell, MT2.4% cap rate
$625K median$2,170/mo rent0.76% tax1.5% growth
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124
Lakewood, CO2.4% cap rate
$565K median$1,840/mo rent0.5% tax0.8% growth
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125
Centralia, WA2.4% cap rate
$425K median$1,540/mo rent0.93% tax1.1% growth
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126
Lancaster, PA2.4% cap rate
$375K median$1,510/mo rent1.35% tax0.4% growth
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127
Stephenville, TX2.4% cap rate
$330K median$1,440/mo rent1.72% tax1.8% growth
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128
Denver, CO2.4% cap rate
$565K median$1,840/mo rent0.51% tax1.1% growth
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129
Spokane, WA2.4% cap rate
$410K median$1,490/mo rent0.94% tax1.2% growth
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130
Jersey City, NJ2.4% cap rate
$705K median$3,260/mo rent2.08% tax0.8% growth
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131
Norwalk, CT2.4% cap rate
$655K median$2,730/mo rent1.58% tax0.2% growth
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132
Red Wing, MN2.4% cap rate
$315K median$1,190/mo rent1.12% tax0.5% growth
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133
Sandpoint, ID2.4% cap rate
$630K median$2,100/mo rent0.64% tax2.6% growth
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134
Oxnard, CA2.4% cap rate
$870K median$3,010/mo rent0.75% tax0.8% growth
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135
Aurora, CO2.4% cap rate
$565K median$1,840/mo rent0.52% tax1.3% growth
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136
Sioux Falls, SD2.4% cap rate
$335K median$1,290/mo rent1.22% tax1.8% growth
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137
Nashua, NH2.4% cap rate
$715K median$3,100/mo rent1.82% tax0.6% growth
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138
Eureka, CA2.4% cap rate
$425K median$1,460/mo rent0.75% tax0.8% growth
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139
Wenatchee, WA2.4% cap rate
$510K median$1,820/mo rent0.93% tax1.1% growth
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140
Clifton, NJ2.4% cap rate
$705K median$3,260/mo rent2.12% tax0.2% growth
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141
Billings, MT2.3% cap rate
$400K median$1,360/mo rent0.74% tax1% growth
→
142
Ames, IA2.3% cap rate
$260K median$1,050/mo rent1.5% tax0.8% growth
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143
Bay City, TX2.3% cap rate
$200K median$860/mo rent1.72% tax1.8% growth
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144
Provo, UT2.3% cap rate
$540K median$1,730/mo rent0.56% tax1.8% growth
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145
Prineville, OR2.3% cap rate
$465K median$1,650/mo rent0.94% tax1% growth
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146
San Luis Obispo, CA2.3% cap rate
$890K median$3,020/mo rent0.75% tax0.8% growth
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147
Dubuque, IA2.3% cap rate
$265K median$1,080/mo rent1.51% tax0.4% growth
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148
Salinas, CA2.3% cap rate
$835K median$2,830/mo rent0.75% tax0.8% growth
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149
Janesville, WI2.3% cap rate
$280K median$1,230/mo rent1.88% tax0.5% growth
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150
Warrensburg, MO2.3% cap rate
$275K median$1,060/mo rent1.25% tax0.5% growth
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151
Ogden, UT2.3% cap rate
$510K median$1,640/mo rent0.59% tax1.2% growth
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152
Elizabeth, NJ2.3% cap rate
$705K median$3,260/mo rent2.15% tax0.3% growth
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153
Racine, WI2.3% cap rate
$300K median$1,340/mo rent1.92% tax0.1% growth
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154
Mitchell, SD2.3% cap rate
$250K median$940/mo rent1.2% tax1.4% growth
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155
Barre, VT2.3% cap rate
$380K median$1,540/mo rent1.59% tax0.3% growth
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156
Bridgeport, CT2.3% cap rate
$655K median$2,730/mo rent1.63% tax-0.1% growth
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157
Santa Maria, CA2.3% cap rate
$975K median$3,280/mo rent0.75% tax0.8% growth
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158
Santa Rosa, CA2.3% cap rate
$780K median$2,620/mo rent0.75% tax0.8% growth
→
159
Boulder, CO2.3% cap rate
$715K median$2,240/mo rent0.51% tax1.3% growth
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160
Helena, MT2.3% cap rate
$460K median$1,530/mo rent0.76% tax1.5% growth
→
161
Jefferson City, MO2.2% cap rate
$265K median$1,010/mo rent1.25% tax0.5% growth
→
162
Paterson, NJ2.2% cap rate
$705K median$3,260/mo rent2.18% tax0.2% growth
→
163
Fargo, ND2.2% cap rate
$315K median$1,110/mo rent0.98% tax1.5% growth
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164
Newark, NJ2.2% cap rate
$705K median$3,260/mo rent2.21% tax0.4% growth
→
165
Wisconsin Rapids, WI2.2% cap rate
$220K median$950/mo rent1.88% tax0.5% growth
→
166
Concord, NH2.2% cap rate
$470K median$1,990/mo rent1.84% tax0.3% growth
→
167
Bremerton, WA2.2% cap rate
$575K median$1,980/mo rent0.93% tax1.1% growth
→
168
Laramie, WY2.2% cap rate
$360K median$1,140/mo rent0.61% tax0.8% growth
→
169
Longview, WA2.2% cap rate
$415K median$1,420/mo rent0.93% tax1.1% growth
→
170
Durango, CO2.2% cap rate
$660K median$2,020/mo rent0.51% tax1.3% growth
→
171
Rapid City, SD2.2% cap rate
$365K median$1,330/mo rent1.18% tax1% growth
→
172
Barnstable Town, MA2.2% cap rate
$735K median$2,690/mo rent1.19% tax0.3% growth
→
173
Pocatello, ID2.2% cap rate
$345K median$1,080/mo rent0.64% tax2.6% growth
→
174
Astoria, OR2.1% cap rate
$500K median$1,700/mo rent0.94% tax1% growth
→
175
Hays, KS2.1% cap rate
$235K median$890/mo rent1.38% tax0.7% growth
→
176
Oak Harbor, WA2.1% cap rate
$625K median$2,100/mo rent0.93% tax1.1% growth
→
177
Glenwood Springs, CO2.1% cap rate
$960K median$2,880/mo rent0.51% tax1.3% growth
→
178
Menomonie, WI2.1% cap rate
$300K median$1,260/mo rent1.88% tax0.5% growth
→
179
Vancouver, WA2.1% cap rate
$540K median$1,780/mo rent0.9% tax1.5% growth
→
180
Manchester, NH2.1% cap rate
$505K median$2,080/mo rent1.86% tax0.5% growth
→
181
Fredericksburg, TX2.1% cap rate
$495K median$2,010/mo rent1.72% tax1.8% growth
→
182
Rolla, MO2.1% cap rate
$225K median$820/mo rent1.25% tax0.5% growth
→
183
Urbana, OH2.1% cap rate
$240K median$950/mo rent1.58% tax0.2% growth
→
184
Bend, OR2.0% cap rate
$660K median$2,140/mo rent0.9% tax2.5% growth
→
185
Portland, OR2.0% cap rate
$540K median$1,780/mo rent0.93% tax0.4% growth
→
186
Gettysburg, PA2.0% cap rate
$325K median$1,210/mo rent1.38% tax0.2% growth
→
187
Bozeman, MT2.0% cap rate
$690K median$2,130/mo rent0.76% tax3.5% growth
→
188
Oceanside, CA2.0% cap rate
$930K median$2,870/mo rent0.74% tax0.8% growth
→
189
Stevens Point, WI2.0% cap rate
$305K median$1,260/mo rent1.88% tax0.5% growth
→
190
Maryville, MO2.0% cap rate
$215K median$770/mo rent1.25% tax0.5% growth
→
191
Brainerd, MN2.0% cap rate
$345K median$1,180/mo rent1.12% tax0.5% growth
→
192
Napa, CA2.0% cap rate
$885K median$2,750/mo rent0.75% tax0.8% growth
→
193
Cullowhee, NC2.0% cap rate
$400K median$1,250/mo rent0.78% tax1.5% growth
→
194
Blackfoot, ID2.0% cap rate
$375K median$1,110/mo rent0.64% tax2.6% growth
→
195
Garden City, KS2.0% cap rate
$225K median$820/mo rent1.38% tax0.7% growth
→
196
San Diego, CA2.0% cap rate
$930K median$2,870/mo rent0.75% tax0.8% growth
→
197
Brenham, TX1.9% cap rate
$365K median$1,440/mo rent1.72% tax1.8% growth
→
198
Bellingham, WA1.9% cap rate
$605K median$1,920/mo rent0.92% tax1% growth
→
199
Logan, UT1.9% cap rate
$460K median$1,320/mo rent0.57% tax2% growth
→
200
Rexburg, ID1.9% cap rate
$425K median$1,240/mo rent0.64% tax2.6% growth
→
201
Salt Lake City, UT1.9% cap rate
$560K median$1,600/mo rent0.58% tax1.4% growth
→
202
Coeur d'Alene, ID1.9% cap rate
$585K median$1,700/mo rent0.64% tax2.6% growth
→
203
Ellensburg, WA1.9% cap rate
$480K median$1,520/mo rent0.93% tax1.1% growth
→
204
Los Angeles, CA1.9% cap rate
$955K median$2,880/mo rent0.75% tax0.8% growth
→
205
Edwards, CO1.9% cap rate
$1.3M median$3,630/mo rent0.51% tax1.3% growth
→
206
Dayton, OH1.9% cap rate
$250K median$960/mo rent1.6% tax-0.1% growth
→
207
Vermillion, SD1.9% cap rate
$280K median$950/mo rent1.2% tax1.4% growth
→
208
Palmdale, CA1.9% cap rate
$955K median$2,880/mo rent0.76% tax0.8% growth
→
209
Ashland, OH1.9% cap rate
$235K median$890/mo rent1.58% tax0.2% growth
→
210
Santa Cruz, CA1.8% cap rate
$1.1M median$3,360/mo rent0.75% tax0.8% growth
→
211
Steamboat Springs, CO1.8% cap rate
$1.1M median$3,010/mo rent0.51% tax1.3% growth
→
212
Milwaukee, WI1.8% cap rate
$370K median$1,480/mo rent1.91% tax0.4% growth
→
213
Beaver Dam, WI1.8% cap rate
$310K median$1,220/mo rent1.88% tax0.5% growth
→
214
Wausau, WI1.8% cap rate
$255K median$1,000/mo rent1.88% tax0.5% growth
→
215
Madison, WI1.7% cap rate
$435K median$1,660/mo rent1.85% tax1.2% growth
→
216
Austin, TX1.7% cap rate
$425K median$1,560/mo rent1.68% tax2.8% growth
→
217
Seattle, WA1.7% cap rate
$740K median$2,180/mo rent0.92% tax0.8% growth
→
218
Fond du Lac, WI1.7% cap rate
$280K median$1,070/mo rent1.88% tax0.5% growth
→
219
Round Rock, TX1.7% cap rate
$425K median$1,560/mo rent1.74% tax3.1% growth
→
220
Oshkosh, WI1.6% cap rate
$290K median$1,100/mo rent1.88% tax0.5% growth
→
221
San Francisco, CA1.6% cap rate
$1.1M median$3,100/mo rent0.75% tax0.8% growth
→
222
Tacoma, WA1.6% cap rate
$740K median$2,180/mo rent0.96% tax0.6% growth
→
223
Jackson, WY1.6% cap rate
$1.4M median$3,620/mo rent0.61% tax0.8% growth
→
224
Laconia, NH1.6% cap rate
$490K median$1,790/mo rent1.84% tax0.5% growth
→
225
La Crosse, WI1.5% cap rate
$320K median$1,190/mo rent1.88% tax0.5% growth
→
226
Moscow, ID1.5% cap rate
$465K median$1,200/mo rent0.64% tax2.6% growth
→
227
Missoula, MT1.5% cap rate
$560K median$1,500/mo rent0.78% tax1.2% growth
→
228
Appleton, WI1.5% cap rate
$335K median$1,220/mo rent1.85% tax0.6% growth
→
229
Hood River, OR1.5% cap rate
$670K median$1,890/mo rent0.94% tax1% growth
→
230
Alexandria, MN1.5% cap rate
$330K median$980/mo rent1.12% tax0.5% growth
→
231
Hailey, ID1.4% cap rate
$1.0M median$2,530/mo rent0.64% tax2.6% growth
→
232
Eau Claire, WI1.4% cap rate
$310K median$1,120/mo rent1.88% tax0.5% growth
→
233
Manitowoc, WI1.4% cap rate
$250K median$900/mo rent1.88% tax0.5% growth
→
234
Heber, UT1.4% cap rate
$1.1M median$2,710/mo rent0.57% tax2% growth
→
235
Greenville, OH1.3% cap rate
$205K median$680/mo rent1.58% tax0.2% growth
→
236
Baraboo, WI1.3% cap rate
$325K median$1,150/mo rent1.88% tax0.5% growth
→
237
Watertown, WI1.2% cap rate
$350K median$1,210/mo rent1.88% tax0.5% growth
→
238
Whitewater, WI1.2% cap rate
$395K median$1,340/mo rent1.88% tax0.5% growth
→
239
Green Bay, WI1.1% cap rate
$330K median$1,100/mo rent1.88% tax0.5% growth
→
240
San Jose, CA0.9% cap rate
$1.6M median$3,430/mo rent0.75% tax0.8% growth
→
241
Sheboygan, WI0.9% cap rate
$310K median$970/mo rent1.88% tax0.5% growth
→
242
Watertown, SD0.8% cap rate
$330K median$820/mo rent1.2% tax1.4% growth
→
243
Ocean City, NJ0.3% cap rate
$765K median$2,200/mo rent2.18% tax0.3% growth
→

By Region

West (103)
Midwest (74)
Northeast (39)
South (27)

Below 3% Cities by State

Washington (20)Wisconsin (20)California (17)Texas (16)Oregon (13)Idaho (12)Colorado (11)Ohio (9)Iowa (8)Pennsylvania (7)New Jersey (7)Arizona (6)North Carolina (6)Minnesota (6)New York (6)North Dakota (6)South Dakota (6)Utah (6)Missouri (5)Kansas (5)Connecticut (5)Montana (5)Massachusetts (4)Nebraska (4)Wyoming (4)Nevada (4)New Hampshire (4)Hawaii (3)Indiana (3)Rhode Island (3)Michigan (2)Vermont (2)Tennessee (1)Maine (1)Maryland (1)Alaska (1)DC (1)Kentucky (1)Florida (1)New Mexico (1)

Frequently Asked Questions

What does a below 3% cap rate mean?
A cap rate below 3% means the property generates relatively low income compared to price. Investors in this range typically focus on appreciation and equity growth rather than current cash flow.
Are below 3% cap rate cities a good investment?
These markets are better suited for appreciation-focused strategies. Cash flow is tight at median prices, so consider house hacking, value-add approaches, or targeting below-median properties.
How many US cities have below 3% cap rates?
CapRateCity tracks 243 US cities with cap rates in the below 3% range. The West has the most cities in this tier (103), followed by the Midwest (74). Washington leads with 20 cities.
What is a good cap rate for rental property?
It depends on your strategy. Above 6% is generally considered strong for cash flow. 4-6% is moderate and workable with good financing. Below 4% is challenging for cash flow but may offer superior appreciation. The national average across 300+ cities we track is 3.81%. The "best" cap rate balances yield with market quality, growth, and risk.

Related Rankings

Highest Cap Rate Cities →Best Cash Flow Cities →Cheapest Rental Markets →Fastest Growing Markets →Lowest Property Tax Cities →Best BRRRR Cities →
The CapRateCity Report
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