College Station, TX Cap Rate: 3.48% — Rental Property Analysis
College Station is a mid-range market in the South with a small but investable metro of 50,000. At a 3.48% estimated cap rate, this is a appreciation-focused market where rents of $1,620/mo lag behind home prices. With a median home price of $305,000 and steady population growth supports long-term rental demand, College Station is primarily an appreciation play that requires creative strategies to generate positive cash flow.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
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Challenging for pure cash flow
Based on $305,000 median price and $1,620/mo median rent
Est. Cap Rate
3.48%
1% Rule
0.53%
Fails
GRM
15.7x
Price / Income
4.8x
Market Data
Median Home Price$305,000
Median Monthly Rent$1,620
Property Tax Rate1.72%
Population50,000
Population Growth1.8% / yr
Median Household Income$63,735
Vacancy Rate5.8%
Annual Appreciation2.7%
2026 Market Update: College Station
College Station's 0.5% rent-to-price ratio is well below the 1% rule. At median prices of $305,000, the $1,620/mo rent produces only $886/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 $-737/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 27% of gross rent here — one of the highest ratios in our dataset. This significantly compresses margins and makes College Station a market where tax-conscious underwriting is essential. Every deal should be stress-tested with potential assessment increases.
Cap Rate Calculator — College Station
Pre-filled with College Station medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
1.72% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
2.73%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$8,340
net operating income
Gross Rent Multiplier
15.7x
High (>15)
1% Rule
0.53%
✗ Fails
Monthly Cash Flow
$695
before debt service
Annual Breakdown
Gross Rental Income$19,440
Less Vacancy−$1,128
Effective Income$18,312
Less Operating Expenses−$9,972
Net Operating Income$8,340
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Factor in financing to see your actual return on invested capital in College Station.
$
$76,250
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-7.75%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
$-551
after all expenses
Annual Cash Flow
$-6,615
before taxes
Cash Flow Breakdown
Monthly Rent$1,620
Less Expenses−$680
Less Mortgage−$1,491
Monthly Cash Flow$-551
Is College Station a Good Place to Invest in Rental Property?
College Station, TX has a population of 50,000 and has been growing at 1.8% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $305,000 paired with median rents of $1,620/mo produces an estimated cap rate of 3.48%.
Property taxes at 1.72% are notably high and represent a significant drag on cash flow — model this expense carefully, as it can make or break a deal. The vacancy rate of 5.8% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 4.8x, homes cost about 4.8 times the local median income of $63,735. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 2.7% 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, College Station 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.
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