Clearlake, CA Cap Rate 4.34%
Clearlake is a mid-range market in the West with a small but investable metro of 50,000. At a 4.34% estimated cap rate, this is a moderate market where rents of $1,580/mo lag behind home prices. With a median home price of $305,000 and steady population growth supports long-term rental demand, Clearlake 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
Market Data
2026 Market Update: Clearlake
Clearlake's 0.5% rent-to-price ratio is well below the 1% rule. At median prices of $305,000, the $1,580/mo rent produces only $1,104/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 ($61K at 7%) would result in approximately $-519/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.
The 16.1x gross rent multiplier and 5.2% vacancy rate position Clearlake as a balanced market. With annual appreciation at 2.8%, total returns (cash flow + equity growth) run approximately 7.1% before financing leverage.
Deal Modeling & Scenarios for Clearlake
All figures below are computed from Clearlake's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
Property Tax Bill in Real Dollars
At 0.75% effective rate on the $305,000 median price, the annual tax bill is $2,288 — that's below national average (-29% 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.
5-Year Cap Rate Trajectory
If Clearlake continues appreciating at 2.8%/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 | $305K | $1,580 | 4.3% |
| Year 1 | $314K | $1,627 | 4.4% |
| Year 2 | $322K | $1,676 | 4.4% |
| Year 3 | $331K | $1,727 | 4.4% |
| Year 4 | $341K | $1,778 | 4.4% |
| Year 5 | $350K | $1,832 | 4.4% |
Three Financing Scenarios
Same median-priced Clearlake 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 | $305K | $1,104 | $13,247 | 4.3% |
| 20% down conventional @ 7% | $70K | $-519 | $-6,225 | -8.9% |
| 25% down DSCR @ 8.5% | $88K | $-655 | $-7,862 | -8.9% |
Three Price Tiers: Below, At, and Above the Median
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) | $229K | $1,343 | $10,069 | 4.4% | $839 |
| At median | $305K | $1,580 | $11,433 | 3.7% | $953 |
| Above median (~125% price) | $381K | $1,817 | $12,797 | 3.4% | $1,066 |
Total Return Over a 5-Year Hold
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 Clearlake's historical appreciation rate of 2.8%:
On a $61K down payment, that's a 53.0% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Risk Flags Specific to Clearlake
Automated checks against the underlying data — surface only the risks that actually apply to Clearlake, not generic boilerplate:
Cap Rate Calculator — Clearlake
Pre-filled with Clearlake medians. Adjust to match a specific property.
Cash-on-Cash Return — Clearlake
Factor in financing to see your actual return on invested capital in Clearlake.
Is Clearlake a Good Place to Invest in Rental Property?
Clearlake, CA has a population of 50,000 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 $305,000 paired with median rents of $1,580/mo produces an estimated cap rate of 4.34%.
Property taxes at 0.75% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 5.2% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 5.1x, homes cost about 5.1 times the local median income of $60,018. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 2.8% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Clearlake presents moderate opportunities. Cap rates near 4.34% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.