Carmel, IN Cap Rate: 4.39% — Rental Property Analysis
Carmel is a mid-range market in the Midwest with a smaller market with 105,000 residents. At a 4.39% estimated cap rate, this is a moderate market where rents of $1,490/mo lag behind home prices. With a median home price of $285,000 and steady population growth supports long-term rental demand, Carmel 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 $285,000 median price and $1,490/mo median rent
Est. Cap Rate
4.39%
1% Rule
0.52%
Fails
GRM
15.9x
Price / Income
2.5x
Market Data
Median Home Price$285,000
Median Monthly Rent$1,490
Property Tax Rate0.82%
Population105,000
Population Growth1.8% / yr
Median Household Income$112,000
Vacancy Rate4.2%
Annual Appreciation3%
2026 Market Update: Carmel
Carmel's 0.5% rent-to-price ratio is well below the 1% rule. At median prices of $285,000, the $1,490/mo rent produces only $1,043/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 ($57K at 7%) would result in approximately $-473/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.
With 1.8% annual population growth paired with 3% home appreciation, Carmel offers a rare combination of current cash flow and future equity upside. The 15.9x gross rent multiplier suggests the market hasn't fully priced in this growth trajectory.
Cap Rate Calculator — Carmel
Pre-filled with Carmel medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
0.82% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
3.66%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$10,433
net operating income
Gross Rent Multiplier
15.9x
High (>15)
1% Rule
0.52%
✗ Fails
Monthly Cash Flow
$869
before debt service
Annual Breakdown
Gross Rental Income$17,880
Less Vacancy−$751
Effective Income$17,129
Less Operating Expenses−$6,696
Net Operating Income$10,433
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 Carmel.
$
$71,250
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-7.96%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$79,800
$71,250 down + $8,550 closing
Monthly Mortgage
$1,393
on $214K loan
Monthly Cash Flow
$-529
after all expenses
Annual Cash Flow
$-6,354
before taxes
Cash Flow Breakdown
Monthly Rent$1,490
Less Expenses−$626
Less Mortgage−$1,393
Monthly Cash Flow$-529
Is Carmel a Good Place to Invest in Rental Property?
Carmel, IN has a population of 105,000 and has been growing at 1.8% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $285,000 paired with median rents of $1,490/mo produces an estimated cap rate of 4.39%.
Property taxes at 0.82% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 4.2% is impressively low, indicating tight rental supply and strong tenant demand — favorable for landlords.
At a price-to-income ratio of 2.5x, homes cost about 2.5 times the local median income of $112,000. This relatively affordable ratio suggests a deep pool of renters who find buying out of reach, supporting rental demand. Home values have appreciated at roughly 3% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Carmel presents moderate opportunities. Cap rates near 4.39% 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.