Hutchinson, KS Cap Rate 4.11%
Hutchinson is one of the most affordable markets in the country in the Midwest with a small but investable metro of 50,000. At a 4.11% estimated cap rate, this is a moderate market where rents of $830/mo lag behind home prices. With a median home price of $150,000 and steady population growth supports long-term rental demand, Hutchinson 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: Hutchinson
Hutchinson's 0.6% rent-to-price ratio is well below the 1% rule. At median prices of $150,000, the $830/mo rent produces only $514/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 ($30K at 7%) would result in approximately $-284/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 21% of gross rent here — one of the highest ratios in our dataset. This significantly compresses margins and makes Hutchinson a market where tax-conscious underwriting is essential. Every deal should be stress-tested with potential assessment increases.
Deal Modeling & Scenarios for Hutchinson
All figures below are computed from Hutchinson's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
Property Tax Bill in Real Dollars
At 1.38% effective rate on the $150,000 median price, the annual tax bill is $2,070 — that's above national average (+30% 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 Hutchinson continues appreciating at 2.5%/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 | $150K | $830 | 4.1% |
| Year 1 | $154K | $855 | 4.1% |
| Year 2 | $158K | $881 | 4.2% |
| Year 3 | $162K | $907 | 4.2% |
| Year 4 | $166K | $934 | 4.2% |
| Year 5 | $170K | $962 | 4.2% |
Three Financing Scenarios
Same median-priced Hutchinson 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 | $150K | $514 | $6,162 | 4.1% |
| 20% down conventional @ 7% | $35K | $-284 | $-3,414 | -9.9% |
| 25% down DSCR @ 8.5% | $44K | $-352 | $-4,219 | -9.7% |
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) | $113K | $706 | $4,665 | 4.1% | $389 |
| At median | $150K | $830 | $5,169 | 3.4% | $431 |
| Above median (~125% price) | $188K | $954 | $5,672 | 3.0% | $473 |
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 Hutchinson's historical appreciation rate of 2.5%:
On a $30K down payment, that's a 38.8% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Risk Flags Specific to Hutchinson
Automated checks against the underlying data — surface only the risks that actually apply to Hutchinson, not generic boilerplate:
Cap Rate Calculator — Hutchinson
Pre-filled with Hutchinson medians. Adjust to match a specific property.
Cash-on-Cash Return — Hutchinson
Factor in financing to see your actual return on invested capital in Hutchinson.
Is Hutchinson a Good Place to Invest in Rental Property?
Hutchinson, KS has a population of 50,000 and has been growing at 0.7% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $150,000 paired with median rents of $830/mo produces an estimated cap rate of 4.11%.
Property taxes at 1.38% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 5.3% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 2.7x, homes cost about 2.7 times the local median income of $55,200. 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 2.5% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Hutchinson presents moderate opportunities. Cap rates near 4.11% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.