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Cap Rate Analysis: Little Rock, AR

Investment metrics, interactive calculators, and data-driven analysis for Little Rock rental properties.

Moderate — source deals carefully
Based on $195,000 median price and $1,100/mo median rent
Est. Cap Rate
4.92%
1% Rule
0.56%
Fails
GRM
14.8x
Price / Income
4.0x

Market Data

Median Home Price$195,000
Median Monthly Rent$1,100
Property Tax Rate0.62%
Population202,591
Population Growth0.5% / yr
Median Household Income$48,200
Vacancy Rate6.4%
Annual Appreciation2.4%

Cap Rate Calculator — Little Rock

Pre-filled with Little Rock medians. Adjust to match a specific property.

Property Details
$
$
3–8% typical
%
Monthly Expenses
0.62% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
4.10%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$7,987
net operating income
Gross Rent Multiplier
14.8x
Good (<15)
1% Rule
0.56%
✗ Fails
Monthly Cash Flow
$666
before debt service
Annual Breakdown
Gross Rental Income$13,200
Less Vacancy−$845
Effective Income$12,355
Less Operating Expenses−$4,368
Net Operating Income$7,987

Cash-on-Cash Return — Little Rock

Factor in financing to see your actual return on invested capital in Little Rock.

$
$48,750
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-6.93%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$54,600
$48,750 down + $5,850 closing
Monthly Mortgage
$953
on $146K loan
Monthly Cash Flow
$-315
after all expenses
Annual Cash Flow
$-3,785
before taxes
Cash Flow Breakdown
Monthly Rent$1,100
Less Expenses−$462
Less Mortgage−$953
Monthly Cash Flow$-315

Is Little Rock a Good Place to Invest in Rental Property?

Little Rock, AR has a population of 202,591 and has been growing at 0.5% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $195,000 paired with median rents of $1,100/mo produces an estimated cap rate of 4.92%.

Property taxes at 0.62% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 6.4% is moderate and within normal parameters for a healthy rental market.

At a price-to-income ratio of 4.0x, homes cost about 4.0 times the local median income of $48,200. 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 2.4% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.

Bottom line: Little Rock presents moderate opportunities. Cap rates near 4.92% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.

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