Factor in financing to see your actual return on invested capital in Hot Springs.
$
$60,000
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-7.90%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$67,200
$60,000 down + $7,200 closing
Monthly Mortgage
$1,173
on $180K loan
Monthly Cash Flow
$-442
after all expenses
Annual Cash Flow
$-5,310
before taxes
Cash Flow Breakdown
Monthly Rent$1,260
Less Expenses−$529
Less Mortgage−$1,173
Monthly Cash Flow$-442
Is Hot Springs a Good Place to Invest in Rental Property?
Hot Springs, AR 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 $240,000 paired with median rents of $1,260/mo produces an estimated cap rate of 4.51%.
Property taxes at 0.61% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 6% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 5.2x, homes cost about 5.2 times the local median income of $46,400. This moderate ratio indicates a balanced rent-vs-buy market. 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: Hot Springs presents moderate opportunities. Cap rates near 4.51% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.
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