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Cap Rate Analysis: Durham, NC

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

Challenging for pure cash flow
Based on $345,000 median price and $1,520/mo median rent
Est. Cap Rate
3.43%
1% Rule
0.44%
Fails
GRM
18.9x
Price / Income
5.5x

Market Data

Median Home Price$345,000
Median Monthly Rent$1,520
Property Tax Rate0.8%
Population292,680
Population Growth1.8% / yr
Median Household Income$62,400
Vacancy Rate4.8%
Annual Appreciation3.4%

Cap Rate Calculator — Durham

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

Property Details
$
$
3–8% typical
%
Monthly Expenses
0.8% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
2.88%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$9,936
net operating income
Gross Rent Multiplier
18.9x
High (>15)
1% Rule
0.44%
✗ Fails
Monthly Cash Flow
$828
before debt service
Annual Breakdown
Gross Rental Income$18,240
Less Vacancy−$876
Effective Income$17,364
Less Operating Expenses−$7,428
Net Operating Income$9,936

Cash-on-Cash Return — Durham

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

$
$86,250
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-10.00%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$96,600
$86,250 down + $10,350 closing
Monthly Mortgage
$1,687
on $259K loan
Monthly Cash Flow
$-805
after all expenses
Annual Cash Flow
$-9,658
before taxes
Cash Flow Breakdown
Monthly Rent$1,520
Less Expenses−$638
Less Mortgage−$1,687
Monthly Cash Flow$-805

Is Durham a Good Place to Invest in Rental Property?

Durham, NC has a population of 292,680 and has been growing at 1.8% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $345,000 paired with median rents of $1,520/mo produces an estimated cap rate of 3.43%.

Property taxes at 0.8% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 4.8% is impressively low, indicating tight rental supply and strong tenant demand — favorable for landlords.

At a price-to-income ratio of 5.5x, homes cost about 5.5 times the local median income of $62,400. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 3.4% 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, Durham 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.

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