We analyzed 775+ US markets to find the 25 cities with the strongest rental property fundamentals. Cap rates, cash flow projections, growth data, and deal criteria — all in one free report.
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Here's a preview of the top 10 cities by cap rate. The full report includes 25 ranked cities plus deep dives.
The full report includes 15 more cities plus detailed investment analysis for each market.
We start with 775+ metro-level markets using Zillow Home Value Index (ZHVI) for median home prices and Zillow Observed Rent Index (ZORI) for median rents — the same institutional-grade data that banks and REITs rely on. This eliminates the guesswork of self-reported or anecdotal pricing.
Each city is scored across five key metrics: cap rate (net operating income / purchase price), the 1% rule (rent-to-price ratio), population growth (Census Bureau estimates), vacancy rate (reflecting tenant demand strength), and price-to-income ratio (affordability for local renters). We weight cap rate and cash flow metrics heaviest because our readers are overwhelmingly cash flow investors.
Operating expenses are estimated using industry-standard assumptions: effective property tax rates from county assessors, insurance at ~0.4% of value, maintenance at ~1% of value, vacancy loss at each city's actual rate, and 8% property management. This gives a realistic NOI — not the inflated "gross rent multiplier" numbers you see on listing sites.
The final ranking balances current cash flow potential with market stability. A city with an 8% cap rate but -2% population decline ranks lower than a 6.5% cap rate city with 2% growth — because sustainable cash flow requires sustained tenant demand.
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