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MarketsCaliforniaLos Angeles

Cap Rate Analysis: Los Angeles, CA

Investment metrics, interactive calculators, and data-driven analysis for Los Angeles rental properties.

Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026

Challenging for pure cash flow
Based on $955,000 median price and $2,880/mo median rent
Est. Cap Rate
1.88%
1% Rule
0.30%
Fails
GRM
27.6x
Price / Income
15.9x

Market Data

Median Home Price$955,000
Median Monthly Rent$2,880
Property Tax Rate0.75%
Population50,000
Population Growth0.8% / yr
Median Household Income$60,018
Vacancy Rate5.2%
Annual Appreciation2.8%

Cap Rate Calculator — Los Angeles

Pre-filled with Los Angeles medians. Adjust to match a specific property.

Property Details
$
$
3–8% typical
%
Monthly Expenses
0.75% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
1.63%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$15,567
net operating income
Gross Rent Multiplier
27.6x
High (>15)
1% Rule
0.30%
✗ Fails
Monthly Cash Flow
$1,297
before debt service
Annual Breakdown
Gross Rental Income$34,560
Less Vacancy−$1,797
Effective Income$32,763
Less Operating Expenses−$17,196
Net Operating Income$15,567
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Cash-on-Cash Return — Los Angeles

Factor in financing to see your actual return on invested capital in Los Angeles.

$
$238,750
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-13.46%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$267,400
$238,750 down + $28,650 closing
Monthly Mortgage
$4,669
on $716K loan
Monthly Cash Flow
$-2,999
after all expenses
Annual Cash Flow
$-35,993
before taxes
Cash Flow Breakdown
Monthly Rent$2,880
Less Expenses−$1,210
Less Mortgage−$4,669
Monthly Cash Flow$-2,999

Is Los Angeles a Good Place to Invest in Rental Property?

Los Angeles, CA has a population of 50,000 and has been growing at 0.8% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $955,000 paired with median rents of $2,880/mo produces an estimated cap rate of 1.88%.

Property taxes at 0.75% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 5.2% is moderate and within normal parameters for a healthy rental market.

At a price-to-income ratio of 15.9x, homes cost about 15.9 times the local median income of $60,018. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. Home values have appreciated at roughly 2.8% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.

Bottom line: At current median prices, Los Angeles is challenging for pure cash flow investing. Consider BRRRR strategies with below-market purchases, or look at neighboring metros with stronger price-to-rent ratios.

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