Hammond, LA Cap Rate 5.33%
Hammond is a budget-friendly market in the South with a small but investable metro of 50,000. At a 5.33% estimated cap rate, this is a moderate market where rents of $1,310/mo lag behind home prices. With a median home price of $220,000 and population is roughly stable, Hammond 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: Hammond
Hammond's 0.6% rent-to-price ratio is well below the 1% rule. At median prices of $220,000, the $1,310/mo rent produces only $977/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 ($44K at 7%) would result in approximately $-193/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.
The 14.0x gross rent multiplier and 6.7% vacancy rate position Hammond as a value-oriented market. With annual appreciation at 2.1%, total returns (cash flow + equity growth) run approximately 7.4% before financing leverage.
Deal Modeling & Scenarios for Hammond
All figures below are computed from Hammond's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
Property Tax Bill in Real Dollars
At 0.54% effective rate on the $220,000 median price, the annual tax bill is $1,188 — that's very low (bottom 15% of US markets) (-49% 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 Hammond continues appreciating at 2.1%/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 | $220K | $1,310 | 5.3% |
| Year 1 | $225K | $1,349 | 5.4% |
| Year 2 | $229K | $1,390 | 5.4% |
| Year 3 | $234K | $1,431 | 5.5% |
| Year 4 | $239K | $1,474 | 5.5% |
| Year 5 | $244K | $1,519 | 5.6% |
Three Financing Scenarios
Same median-priced Hammond 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 | $220K | $977 | $11,719 | 5.3% |
| 20% down conventional @ 7% | $51K | $-194 | $-2,326 | -4.6% |
| 25% down DSCR @ 8.5% | $64K | $-292 | $-3,507 | -5.5% |
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) | $165K | $1,114 | $8,782 | 5.3% | $732 |
| At median | $220K | $1,310 | $10,084 | 4.6% | $840 |
| Above median (~125% price) | $275K | $1,506 | $11,385 | 4.1% | $949 |
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 Hammond's historical appreciation rate of 2.1%:
On a $44K down payment, that's a 58.3% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Risk Flags Specific to Hammond
Automated checks against the underlying data — surface only the risks that actually apply to Hammond, not generic boilerplate:
Cap Rate Calculator — Hammond
Pre-filled with Hammond medians. Adjust to match a specific property.
Cash-on-Cash Return — Hammond
Factor in financing to see your actual return on invested capital in Hammond.
Is Hammond a Good Place to Invest in Rental Property?
Hammond, LA has a population of 50,000 and has been growing at 0.3% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $220,000 paired with median rents of $1,310/mo produces an estimated cap rate of 5.33%.
Property taxes at 0.54% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 6.7% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 4.8x, homes cost about 4.8 times the local median income of $45,760. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 2.1% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Hammond presents moderate opportunities. Cap rates near 5.33% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.