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Cap Rate Analysis: Denton, TX

Investment metrics, interactive calculators, and data-driven analysis for Denton rental properties.

Challenging for pure cash flow
Based on $325,000 median price and $1,520/mo median rent
Est. Cap Rate
2.76%
1% Rule
0.47%
Fails
GRM
17.8x
Price / Income
5.6x

Market Data

Median Home Price$325,000
Median Monthly Rent$1,520
Property Tax Rate1.76%
Population153,000
Population Growth2.8% / yr
Median Household Income$58,200
Vacancy Rate5.2%
Annual Appreciation3.1%

Cap Rate Calculator — Denton

Pre-filled with Denton medians. Adjust to match a specific property.

Property Details
$
$
3–8% typical
%
Monthly Expenses
1.76% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
2.15%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$6,984
net operating income
Gross Rent Multiplier
17.8x
High (>15)
1% Rule
0.47%
✗ Fails
Monthly Cash Flow
$582
before debt service
Annual Breakdown
Gross Rental Income$18,240
Less Vacancy−$948
Effective Income$17,292
Less Operating Expenses−$10,308
Net Operating Income$6,984

Cash-on-Cash Return — Denton

Factor in financing to see your actual return on invested capital in Denton.

$
$81,250
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-9.32%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$91,000
$81,250 down + $9,750 closing
Monthly Mortgage
$1,589
on $244K loan
Monthly Cash Flow
$-707
after all expenses
Annual Cash Flow
$-8,485
before taxes
Cash Flow Breakdown
Monthly Rent$1,520
Less Expenses−$638
Less Mortgage−$1,589
Monthly Cash Flow$-707

Is Denton a Good Place to Invest in Rental Property?

Denton, TX has a population of 153,000 and has been growing at 2.8% annually — well above the national average, signaling strong housing demand from population inflows. The median home price of $325,000 paired with median rents of $1,520/mo produces an estimated cap rate of 2.76%.

Property taxes at 1.76% 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 5.2% is moderate and within normal parameters for a healthy rental market.

At a price-to-income ratio of 5.6x, homes cost about 5.6 times the local median income of $58,200. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 3.1% 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, Denton 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.

Run a BRRRR analysis for Denton
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