Clearlake, CA Cap Rate: 4.34% — Rental Property Analysis
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
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Moderate — source deals carefully
Based on $305,000 median price and $1,580/mo median rent
Est. Cap Rate
4.34%
1% Rule
0.52%
Fails
GRM
16.1x
Price / Income
5.1x
Market Data
Median Home Price$305,000
Median Monthly Rent$1,580
Property Tax Rate0.75%
Population50,000
Population Growth0.8% / yr
Median Household Income$60,018
Vacancy Rate5.2%
Annual Appreciation2.8%
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.
Cap Rate Calculator — Clearlake
Pre-filled with Clearlake medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
0.75% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
3.62%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$11,050
net operating income
Gross Rent Multiplier
16.1x
High (>15)
1% Rule
0.52%
✗ Fails
Monthly Cash Flow
$921
before debt service
Annual Breakdown
Gross Rental Income$18,960
Less Vacancy−$986
Effective Income$17,974
Less Operating Expenses−$6,924
Net Operating Income$11,050
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Factor in financing to see your actual return on invested capital in Clearlake.
$
$76,250
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-8.08%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$85,400
$76,250 down + $9,150 closing
Monthly Mortgage
$1,491
on $229K loan
Monthly Cash Flow
$-575
after all expenses
Annual Cash Flow
$-6,903
before taxes
Cash Flow Breakdown
Monthly Rent$1,580
Less Expenses−$664
Less Mortgage−$1,491
Monthly Cash Flow$-575
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.
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