Decatur is one of the most affordable markets in the country in the Midwest with a small but investable metro of 50,000. At a 7.68% estimated cap rate, this is a high-yield market where rents at $1,120/mo track reasonably with home values. With a median home price of $120,000 and population is roughly stable, Decatur stands out as a market worth serious analysis for rental investors.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
At a 0.9% rent-to-price ratio, Decatur falls just below the 1% rule threshold. A median-priced property at $120,000 with $1,120/mo rent yields approximately $768/mo in NOI — workable with favorable financing but not a slam-dunk cash flow market.
On a conventional loan with 20% down ($24K) at 7%, estimated monthly cash flow is $130 — a thin 6.5% cash-on-cash return. Investors should negotiate below asking price or target properties with above-median rents to build a meaningful cash flow buffer.
Property taxes consume 18% of gross rent here — one of the highest ratios in our dataset. This significantly compresses margins and makes Decatur a market where tax-conscious underwriting is essential. Every deal should be stress-tested with potential assessment increases.
Pre-filled with Decatur medians. Adjust to match a specific property.
Factor in financing to see your actual return on invested capital in Decatur.
Decatur, IL has a population of 50,000 and has been growing at 0.2% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $120,000 paired with median rents of $1,120/mo produces an estimated cap rate of 7.68%.
Property taxes at 2.06% 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 5.9% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 1.9x, homes cost about 1.9 times the local median income of $62,333. 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 2.1% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Decatur offers attractive fundamentals for rental investors. and cap rates above 6% put it in the upper tier of investable markets.