Davenport is the Iowa anchor of the Quad Cities metro (Davenport and Bettendorf on the Iowa side, Moline and Rock Island on the Illinois side) — a Mississippi River metro built around John Deere's headquarters and manufacturing operations, plus deep healthcare and logistics bases. The 3.46% cap rate at a $185,000 median price keeps the 0.51% rent-to-price ratio close to functional. Population growth at 0.1%/yr is essentially flat.
Employment is anchored by John Deere (the agricultural machinery giant — headquartered in nearby Moline IL with major manufacturing operations across the Quad Cities; the Davenport Works in particular is one of the larger US construction-and-forestry equipment plants), the Rock Island Arsenal nearby on Arsenal Island (one of the larger US Army manufacturing arsenals — produces and overhauls military equipment, employs thousands of civilians and contractors), Genesis Medical Center and the broader UnityPoint Health Trinity, the broader Quad Cities healthcare ecosystem, Hy-Vee (the regional grocery chain — Davenport is a major store and operations market), St. Ambrose University and Palmer College of Chiropractic, the Riverboat casinos (Rhythm City Casino), the broader Scott County government, and a meaningful logistics base tied to the Mississippi River barge traffic and the I-80/I-74 corridor. Submarkets stratify cleanly: the historic Hilltop / McClellan Heights areas are walkable urban-historic with strong appreciation; the North Davenport / Eldridge corridor draws professional family rentals; Bettendorf east is the higher-end Iowa-side submarket; the central and west Davenport zones offer deeper-value workforce inventory.
Iowa property tax at 1.52% is moderate. Iowa state income tax is moving toward a flat ~3.9% structure. Insurance is reasonable but verify Mississippi River flood-zone designations carefully — Davenport has experienced major flooding events (the 2019 flood breached the city's temporary barriers and inundated downtown). The structural advantages: John Deere + Arsenal + Genesis + Hy-Vee provides a genuinely diversified employer mix; the Mississippi River barge logistics is durable; cost basis is materially below Des Moines or Chicago. The structural risks: agricultural commodity cycles affect John Deere's manufacturing volume; Mississippi River flooding is the central operational variable — verify floodplain status and flood insurance pricing per parcel; population trajectory has been weak. For investors who want Quad Cities exposure with John Deere's manufacturing durability, Davenport is the most defensible Iowa-side option — but underwrite floodplain exposure honestly.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
Davenport's 0.5% rent-to-price ratio is well below the 1% rule. At median prices of $185,000, the $950/mo rent produces only $533/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 ($37K at 7%) would result in approximately $-451/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 25% of gross rent here — one of the highest ratios in our dataset. This significantly compresses margins and makes Davenport a market where tax-conscious underwriting is essential. Every deal should be stress-tested with potential assessment increases.
All figures below are computed from Davenport's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
At 1.52% effective rate on the $185,000 median price, the annual tax bill is $2,812 — that's above national average (+43% 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.
If Davenport continues appreciating at 2%/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 | $185K | $950 | 3.5% |
| Year 1 | $189K | $979 | 3.5% |
| Year 2 | $192K | $1,008 | 3.5% |
| Year 3 | $196K | $1,038 | 3.6% |
| Year 4 | $200K | $1,069 | 3.6% |
| Year 5 | $204K | $1,101 | 3.6% |
Same median-priced Davenport 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 | $185K | $533 | $6,401 | 3.5% |
| 20% down conventional @ 7% | $43K | $-451 | $-5,409 | -12.7% |
| 25% down DSCR @ 8.5% | $54K | $-534 | $-6,403 | -11.9% |
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) | $139K | $808 | $4,879 | 3.5% | $407 |
| At median | $185K | $950 | $5,317 | 2.9% | $443 |
| Above median (~125% price) | $231K | $1,093 | $5,764 | 2.5% | $480 |
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 Davenport's historical appreciation rate of 2%:
On a $37K down payment, that's a 8.9% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Automated checks against the underlying data — surface only the risks that actually apply to Davenport, not generic boilerplate:
Pre-filled with Davenport medians. Adjust to match a specific property.
Factor in financing to see your actual return on invested capital in Davenport.
Davenport, IA has a population of 101,000 and has been growing at 0.1% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $185,000 paired with median rents of $950/mo produces an estimated cap rate of 3.46%.
Property taxes at 1.52% 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 6.2% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 3.8x, homes cost about 3.8 times the local median income of $48,200. 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% 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, Davenport 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.