Cedar Rapids is the second-largest metro in Iowa and one of the more genuinely industrial mid-Plains markets — anchored by Collins Aerospace (the aerospace systems giant), the Quaker Oats facility (one of the largest food-processing operations in the US), and the broader insurance and financial-services base. The 3.12% cap rate at a $235,000 median price keeps the 0.48% rent-to-price ratio close to functional. Population growth at 0.4%/yr is modest.
Employment is anchored by Collins Aerospace (the avionics and aerospace-systems division of RTX Corporation, formerly Rockwell Collins — one of the largest aerospace employers in the Midwest, with major engineering, manufacturing, and corporate operations in Cedar Rapids; the C5 ISR and avionics technology that's genuinely critical to commercial and military aviation), Quaker Oats (the original Quaker Oats facility in Cedar Rapids is one of the largest cereal-and-grain processing operations in the US — PepsiCo owns it now, with the broader food-processing employment base), Transamerica (life insurance and financial services — major Cedar Rapids operations and historical HQ presence), General Mills, Cargill, the broader Mercy Medical Center and UnityPoint Health Cedar Rapids, Kirkwood Community College, Coe College, and a meaningful manufacturing-and-logistics base tied to the I-380 corridor. Submarkets stratify cleanly: the Czech Village / NewBo districts are walkable urban-historic with strong appreciation; the broader Mt. Vernon Road and Linn Mar areas draw professional family rentals; the northeast Cedar Rapids and Marion suburbs are family-school zones; the southwest and parts of Cedar Rapids proper offer deeper-value workforce inventory.
Iowa property tax at 1.48% is moderate by Iowa standards. Iowa state income tax is moving toward a flat ~3.9% structure. Insurance is reasonable but verify hail / severe-weather deductible structure (the August 2020 derecho caused catastrophic damage in Cedar Rapids — uprooted trees, structural damage, weeks of widespread power outages; insurance pricing in the metro reflects that event). The structural advantages: Collins Aerospace + Quaker Oats + Transamerica is a genuinely diversified employer mix unusual for an Iowa metro this size; aerospace engineering is durable white-collar employment; cost basis is materially below the Twin Cities or Chicago. The structural risks: the derecho insurance reset is recent and ongoing; concentration in Collins Aerospace decisions about its Cedar Rapids footprint matters; Iowa demographic trajectory has been mixed. For investors who want Iowa exposure outside Des Moines, Cedar Rapids is the most defensible secondary-Iowa option.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
Cedar Rapids's 0.5% rent-to-price ratio is well below the 1% rule. At median prices of $235,000, the $1,120/mo rent produces only $612/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 ($47K at 7%) would result in approximately $-638/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 26% of gross rent here — one of the highest ratios in our dataset. This significantly compresses margins and makes Cedar Rapids a market where tax-conscious underwriting is essential. Every deal should be stress-tested with potential assessment increases.
All figures below are computed from Cedar Rapids's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
At 1.48% effective rate on the $235,000 median price, the annual tax bill is $3,478 — that's above national average (+40% vs the national average of ~1.06%). Verify the actual assessed value before purchase; sale-triggered reassessments can push the bill higher than the seller's current statement.
If Cedar Rapids continues appreciating at 2.3%/yr while rents grow at a conservative 3%/yr, cap rate holds roughly steady as price growth outpaces rent. Year-by-year projection at the median:
| Year | Est. Price | Est. Rent/Mo | Cap Rate |
|---|---|---|---|
| Today | $235K | $1,120 | 3.1% |
| Year 1 | $240K | $1,154 | 3.1% |
| Year 2 | $246K | $1,188 | 3.2% |
| Year 3 | $252K | $1,224 | 3.2% |
| Year 4 | $257K | $1,261 | 3.2% |
| Year 5 | $263K | $1,298 | 3.2% |
Same median-priced Cedar Rapids property — different capital structures. All-cash maximizes cap rate. Leverage trades cash flow for higher cash-on-cash return when the spread between cap rate and borrowing cost is positive.
| Scenario | Cash Invested | Monthly Cash Flow | Annual CF | Cash-on-Cash |
|---|---|---|---|---|
| All cash | $235K | $612 | $7,343 | 3.1% |
| 20% down conventional @ 7% | $54K | $-638 | $-7,660 | -14.2% |
| 25% down DSCR @ 8.5% | $68K | $-743 | $-8,922 | -13.1% |
Properties don't always trade at the median. Lower-priced units typically offer higher cap rates but harder operations; higher-priced properties tend to compress cap rates while attracting better tenants. All-cash assumptions below:
| Tier | Price | Rent/Mo | NOI/Yr | Cap Rate | Monthly CF |
|---|---|---|---|---|---|
| Below median (~75% price) | $176K | $952 | $5,654 | 3.2% | $471 |
| At median | $235K | $1,120 | $6,132 | 2.6% | $511 |
| Above median (~125% price) | $294K | $1,288 | $6,610 | 2.3% | $551 |
Cap rate is just one piece. Real estate returns come from four sources: cash flow, appreciation, principal paydown, and tax benefits. Assuming 20% down conventional financing at 7% and a 5-year hold at Cedar Rapids's historical appreciation rate of 2.3%:
On a $47K down payment, that's a 8.7% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Automated checks against the underlying data — surface only the risks that actually apply to Cedar Rapids, not generic boilerplate:
Pre-filled with Cedar Rapids medians. Adjust to match a specific property.
Factor in financing to see your actual return on invested capital in Cedar Rapids.
Cedar Rapids, IA has a population of 137,710 and has been growing at 0.4% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $235,000 paired with median rents of $1,120/mo produces an estimated cap rate of 3.12%.
Property taxes at 1.48% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 5.5% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 4.1x, homes cost about 4.1 times the local median income of $56,800. 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 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: At current median prices, Cedar Rapids is challenging for pure cash flow investing. Consider BRRRR strategies with below-market purchases, or look at neighboring metros with stronger price-to-rent ratios.