Cumberland, MD Cap Rate 5.37%
Cumberland is one of the most affordable markets in the country in the South with a small but investable metro of 50,000. At a 5.37% estimated cap rate, this is a moderate market where rents of $1,020/mo lag behind home prices. With a median home price of $160,000 and population is roughly stable, Cumberland 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: Cumberland
Cumberland's 0.6% rent-to-price ratio is well below the 1% rule. At median prices of $160,000, the $1,020/mo rent produces only $716/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 ($32K at 7%) would result in approximately $-135/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 13.1x gross rent multiplier and 5.8% vacancy rate position Cumberland as a value-oriented market. With annual appreciation at 2.6%, total returns (cash flow + equity growth) run approximately 8.0% before financing leverage.
Deal Modeling & Scenarios for Cumberland
All figures below are computed from Cumberland's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
Property Tax Bill in Real Dollars
At 1.04% effective rate on the $160,000 median price, the annual tax bill is $1,664 — that's near national average (-2% 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 Cumberland continues appreciating at 2.6%/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 | $160K | $1,020 | 5.4% |
| Year 1 | $164K | $1,051 | 5.4% |
| Year 2 | $168K | $1,082 | 5.4% |
| Year 3 | $173K | $1,115 | 5.4% |
| Year 4 | $177K | $1,148 | 5.5% |
| Year 5 | $182K | $1,182 | 5.5% |
Three Financing Scenarios
Same median-priced Cumberland 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 | $160K | $716 | $8,586 | 5.4% |
| 20% down conventional @ 7% | $37K | $-136 | $-1,628 | -4.4% |
| 25% down DSCR @ 8.5% | $46K | $-207 | $-2,488 | -5.4% |
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) | $120K | $867 | $6,408 | 5.3% | $534 |
| At median | $160K | $1,020 | $7,268 | 4.5% | $606 |
| Above median (~125% price) | $200K | $1,173 | $8,127 | 4.1% | $677 |
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 Cumberland's historical appreciation rate of 2.6%:
On a $32K down payment, that's a 73.0% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Risk Flags Specific to Cumberland
Automated checks against the underlying data — surface only the risks that actually apply to Cumberland, not generic boilerplate:
Cap Rate Calculator — Cumberland
Pre-filled with Cumberland medians. Adjust to match a specific property.
Cash-on-Cash Return — Cumberland
Factor in financing to see your actual return on invested capital in Cumberland.
Is Cumberland a Good Place to Invest in Rental Property?
Cumberland, MD has a population of 50,000 and has been growing at 0.5% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $160,000 paired with median rents of $1,020/mo produces an estimated cap rate of 5.37%.
Property taxes at 1.04% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 5.8% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 2.6x, homes cost about 2.6 times the local median income of $60,467. 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 2.6% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Cumberland presents moderate opportunities. Cap rates near 5.37% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.