Laredo is a budget-friendly market in the South with a mid-sized city of 261,776. At a 4.46% estimated cap rate, this is a moderate market where rents of $1,330/mo lag behind home prices. With a median home price of $215,000 and steady population growth supports long-term rental demand, Laredo 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
Laredo's 0.6% rent-to-price ratio is well below the 1% rule. At median prices of $215,000, the $1,330/mo rent produces only $798/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 ($43K at 7%) would result in approximately $-346/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 23% of gross rent here — one of the highest ratios in our dataset. This significantly compresses margins and makes Laredo a market where tax-conscious underwriting is essential. Every deal should be stress-tested with potential assessment increases.
Pre-filled with Laredo medians. Adjust to match a specific property.
Factor in financing to see your actual return on invested capital in Laredo.
Laredo, TX has a population of 261,776 and has been growing at 1% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $215,000 paired with median rents of $1,330/mo produces an estimated cap rate of 4.46%.
Property taxes at 1.7% 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 6.3% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 5.1x, homes cost about 5.1 times the local median income of $42,500. 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: Laredo presents moderate opportunities. Cap rates near 4.46% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.