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Tuscaloosa vs Dothan for Rental Property Investing

Side-by-side comparison of Tuscaloosa, AL and Dothan, AL — cap rates, rent, prices, and investment metrics.

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Tuscaloosa wins 6–1 across key metrics
Tuscaloosa leads on cash flow (6.73% vs 5.80% cap rate)
Metric
Tuscaloosa, AL
Dothan, AL
Est. Cap Rate
6.73%
5.80%
Median Home Price
$215,000
$190,000
Median Monthly Rent
$1,520
$1,190
1% Rule
0.71%
0.63%
GRM
11.8x
13.3x
Price / Income
5.0x
4.3x
Property Tax Rate
0.43%
0.4%
Vacancy Rate
6.2%
6.8%
Population Growth
0.8% / yr
0.3% / yr
Annual Appreciation
2.4%
2%
Population
110,000
72,500
Median Income
$42,800
$44,200

Tuscaloosa vs Dothan: Which Is Better for Investors?

Cash flow: Tuscaloosa has the edge with an estimated cap rate of 6.73% compared to Dothan's 5.80%. Neither city passes the 1% rule outright, so deal sourcing and value-add strategies become more important. Median home prices are $215,000 in Tuscaloosa vs $190,000 in Dothan, while rents come in at $1,520/mo and $1,190/mo respectively. For context, the national average cap rate is 3.81% and average price is $333K.

Growth & appreciation: Tuscaloosa is growing faster at 0.8% annually vs Dothan's 0.3%. Tuscaloosa leads on home value appreciation at 2.4% per year.

Costs & risk: Property taxes are 0.43% in Tuscaloosa vs 0.4% in Dothan. Vacancy rates of 6.2% and 6.8% are mixed — Tuscaloosa has the tighter rental market.

Entry point: Dothan offers a lower entry at $190K vs Tuscaloosa's $215K — a difference of $25K. With a 20% down payment, that's $38K vs $43K. Tuscaloosa's higher price may be justified by stronger growth.

Bottom line: Tuscaloosa edges out Dothan on most key metrics. With a 6.73% cap rate, it offers solid cash flow potential. Use our free calculators to model specific deals in Tuscaloosa or Dothan.

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Tuscaloosa, AL
6.73% cap rate · $215,000 median · $1,520/mo
Full analysis →
Dothan, AL
5.80% cap rate · $190,000 median · $1,190/mo
Full analysis →

Frequently Asked Questions

Is Tuscaloosa or Dothan better for rental investing?
Tuscaloosa wins 6–1 across our 7 key metrics (cap rate, 1% rule, GRM, taxes, vacancy, growth, appreciation). Tuscaloosa's 6.73% cap rate and $215K median price edge out Dothan's 5.80% at $190K.
What is the cap rate difference between Tuscaloosa and Dothan?
Tuscaloosa has a 6.73% cap rate vs Dothan's 5.80% — a difference of 0.92 percentage points. This is a relatively small difference — other factors like growth, taxes, and local market conditions may matter more. For context, the national average is 3.81%.
Which city has lower property taxes?
Dothan has lower property taxes at 0.4% vs 0.43%. On a $203K property, that's a difference of approximately $165/year in tax expense — money that goes directly to (or from) your cash flow.
Which city is growing faster?
Tuscaloosa is growing at 0.8% annually vs Dothan's 0.3%. Moderate growth provides stable demand. Tuscaloosa's appreciation rate of 2.4% also leads on home value growth.

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