Updated 2026 · Based on median market data for Dothan, AL
Dothan sits in the South with a population of 72,500 growing at 0.3% annually. The median home costs $165,000 while rents average $1,020/mo, producing an estimated cap rate of 5.71%. This is a moderate market that rewards careful deal sourcing.
Dothan works best for experienced investors with a clear strategy — Section 8, student housing, or deep value-add rehabs. The 5.71% cap rate at median prices is tight, so success depends on buying below market, forcing appreciation through renovation, or accessing above-market rent streams through niche tenant bases.
Target properties priced 15-25% below the $165,000 median — around $132,000 or less. At this price point with $1,020/mo rents, your cap rate improves to roughly 7.4%. Factor in 0.4% property taxes ($660/yr), budget 5% of gross rent for maintenance, and underwrite to a 6.8% vacancy rate. On a 20% down conventional loan at 7%, monthly PITI will run approximately $1,033.
Every deal should be evaluated individually using our calculator tools. Median data provides a starting point; actual returns depend on the specific property, financing, and your management approach.
Run the numbers on a specific Dothan property using our cap rate calculator (pre-filled with Dothan data). Compare Dothan against similar markets in the South region. If you're considering a value-add approach, try our BRRRR calculator to model a rehab scenario.