Duncan, OK Cap Rate 6.94%
Duncan is one of the most affordable markets in the country in the South with a small but investable metro of 50,000. At a 6.94% estimated cap rate, this is a solid market where rents of $1,030/mo lag behind home prices. With a median home price of $135,000 and steady population growth supports long-term rental demand, Duncan 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
Market Data
2026 Market Update: Duncan
Duncan's 0.8% rent-to-price ratio is well below the 1% rule. At median prices of $135,000, the $1,030/mo rent produces only $781/mo in NOI. Investors here need to target below-median properties or pursue value-add strategies to make the numbers work.
On a conventional loan with 20% down ($27K) at 7%, estimated monthly cash flow is $63 — a thin 2.8% cash-on-cash return. Investors should negotiate below asking price or target properties with above-median rents to build a meaningful cash flow buffer.
The 10.9x gross rent multiplier and 5.8% vacancy rate position Duncan as a value-oriented market. With annual appreciation at 2.5%, total returns (cash flow + equity growth) run approximately 9.4% before financing leverage.
Deal Modeling & Scenarios for Duncan
All figures below are computed from Duncan's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
Property Tax Bill in Real Dollars
At 0.88% effective rate on the $135,000 median price, the annual tax bill is $1,188 — that's near national average (-17% 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 Duncan continues appreciating at 2.5%/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 | $135K | $1,030 | 6.9% |
| Year 1 | $138K | $1,061 | 7.0% |
| Year 2 | $142K | $1,093 | 7.0% |
| Year 3 | $145K | $1,126 | 7.0% |
| Year 4 | $149K | $1,159 | 7.1% |
| Year 5 | $153K | $1,194 | 7.1% |
Three Financing Scenarios
Same median-priced Duncan 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 | $135K | $781 | $9,375 | 6.9% |
| 20% down conventional @ 7% | $31K | $63 | $757 | 2.4% |
| 25% down DSCR @ 8.5% | $39K | $3 | $32 | 0.1% |
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) | $101K | $876 | $6,924 | 6.8% | $577 |
| At median | $135K | $1,030 | $7,938 | 5.9% | $661 |
| Above median (~125% price) | $169K | $1,185 | $8,960 | 5.3% | $747 |
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 Duncan's historical appreciation rate of 2.5%:
On a $27K down payment, that's a 109.7% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Risk Flags Specific to Duncan
Automated checks against the underlying data — surface only the risks that actually apply to Duncan, not generic boilerplate:
Cap Rate Calculator — Duncan
Pre-filled with Duncan medians. Adjust to match a specific property.
Cash-on-Cash Return — Duncan
Factor in financing to see your actual return on invested capital in Duncan.
Is Duncan a Good Place to Invest in Rental Property?
Duncan, OK has a population of 50,000 and has been growing at 0.9% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $135,000 paired with median rents of $1,030/mo produces an estimated cap rate of 6.94%.
Property taxes at 0.88% 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 2.4x, homes cost about 2.4 times the local median income of $56,350. 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 2.5% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Duncan offers attractive fundamentals for rental investors. low taxes, and cap rates above 6% put it in the upper tier of investable markets.