El Campo, TX Cap Rate 4.83%
El Campo is a budget-friendly market in the South with a small but investable metro of 50,000. At a 4.83% estimated cap rate, this is a moderate market where rents of $1,560/mo lag behind home prices. With a median home price of $240,000 and steady population growth supports long-term rental demand, El Campo offers opportunities for investors who source deals carefully.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
Market Data
2026 Market Update: El Campo
El Campo's 0.7% rent-to-price ratio is well below the 1% rule. At median prices of $240,000, the $1,560/mo rent produces only $966/mo in NOI. Investors here need to target below-median properties or pursue value-add strategies to make the numbers work.
At current rates, a 20% down conventional loan ($48K at 7%) would result in approximately $-311/mo cash flow — negative at median prices. Larger down payments, seller financing, or buying 15–25% below median are strategies to turn the numbers positive.
Property taxes consume 22% of gross rent here — one of the highest ratios in our dataset. This significantly compresses margins and makes El Campo a market where tax-conscious underwriting is essential. Every deal should be stress-tested with potential assessment increases.
Deal Modeling & Scenarios for El Campo
All figures below are computed from El Campo's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
Property Tax Bill in Real Dollars
At 1.72% effective rate on the $240,000 median price, the annual tax bill is $4,128 — that's very high (top 15% of US markets) (+62% 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 El Campo continues appreciating at 2.7%/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 | $240K | $1,560 | 4.8% |
| Year 1 | $246K | $1,607 | 4.8% |
| Year 2 | $253K | $1,655 | 4.9% |
| Year 3 | $260K | $1,705 | 4.9% |
| Year 4 | $267K | $1,756 | 4.9% |
| Year 5 | $274K | $1,808 | 4.9% |
Three Financing Scenarios
Same median-priced El Campo 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 | $240K | $966 | $11,586 | 4.8% |
| 20% down conventional @ 7% | $55K | $-311 | $-3,735 | -6.8% |
| 25% down DSCR @ 8.5% | $70K | $-419 | $-5,024 | -7.2% |
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) | $180K | $1,326 | $8,627 | 4.8% | $719 |
| At median | $240K | $1,560 | $9,551 | 4.0% | $796 |
| Above median (~125% price) | $300K | $1,794 | $10,475 | 3.5% | $873 |
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 El Campo's historical appreciation rate of 2.7%:
On a $48K down payment, that's a 62.3% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Risk Flags Specific to El Campo
Automated checks against the underlying data — surface only the risks that actually apply to El Campo, not generic boilerplate:
Cap Rate Calculator — El Campo
Pre-filled with El Campo medians. Adjust to match a specific property.
Cash-on-Cash Return — El Campo
Factor in financing to see your actual return on invested capital in El Campo.
Is El Campo a Good Place to Invest in Rental Property?
El Campo, TX has a population of 50,000 and has been growing at 1.8% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $240,000 paired with median rents of $1,560/mo produces an estimated cap rate of 4.83%.
Property taxes at 1.72% 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 5.8% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 3.8x, homes cost about 3.8 times the local median income of $63,735. 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 2.7% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: El Campo presents moderate opportunities. Cap rates near 4.83% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.