Lumberton, NC Cap Rate 7.60%
Lumberton is one of the most affordable markets in the country in the South with a small but investable metro of 50,000. At a 7.60% estimated cap rate, this is a high-yield market where rents of $1,050/mo lag behind home prices. With a median home price of $130,000 and steady population growth supports long-term rental demand, Lumberton stands out as a market worth serious analysis for rental investors.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
Market Data
2026 Market Update: Lumberton
At a 0.8% rent-to-price ratio, Lumberton falls just below the 1% rule threshold. A median-priced property at $130,000 with $1,050/mo rent yields approximately $823/mo in NOI — workable with favorable financing but not a slam-dunk cash flow market.
On a conventional loan with 20% down ($26K) at 7%, estimated monthly cash flow is $131 — a thin 6.0% cash-on-cash return. Investors should negotiate below asking price or target properties with above-median rents to build a meaningful cash flow buffer.
The 10.3x gross rent multiplier and 5.3% vacancy rate position Lumberton as a value-oriented market. With annual appreciation at 3.2%, total returns (cash flow + equity growth) run approximately 10.8% before financing leverage.
Deal Modeling & Scenarios for Lumberton
All figures below are computed from Lumberton's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
Property Tax Bill in Real Dollars
At 0.78% effective rate on the $130,000 median price, the annual tax bill is $1,014 — that's below national average (-26% 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 Lumberton continues appreciating at 3.2%/yr while rents grow at a conservative 3%/yr, cap rate compresses as price growth outpaces rent. Year-by-year projection at the median:
| Year | Est. Price | Est. Rent/Mo | Cap Rate |
|---|---|---|---|
| Today | $130K | $1,050 | 7.6% |
| Year 1 | $134K | $1,082 | 7.6% |
| Year 2 | $138K | $1,114 | 7.6% |
| Year 3 | $143K | $1,147 | 7.6% |
| Year 4 | $147K | $1,182 | 7.5% |
| Year 5 | $152K | $1,217 | 7.5% |
Three Financing Scenarios
Same median-priced Lumberton 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 | $130K | $823 | $9,878 | 7.6% |
| 20% down conventional @ 7% | $30K | $132 | $1,579 | 5.3% |
| 25% down DSCR @ 8.5% | $38K | $73 | $881 | 2.3% |
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) | $98K | $893 | $7,283 | 7.5% | $607 |
| At median | $130K | $1,050 | $8,382 | 6.4% | $699 |
| Above median (~125% price) | $163K | $1,208 | $9,491 | 5.8% | $791 |
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 Lumberton's historical appreciation rate of 3.2%:
On a $26K down payment, that's a 145.7% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Risk Flags Specific to Lumberton
Automated checks against the underlying data — surface only the risks that actually apply to Lumberton, not generic boilerplate:
Cap Rate Calculator — Lumberton
Pre-filled with Lumberton medians. Adjust to match a specific property.
Cash-on-Cash Return — Lumberton
Factor in financing to see your actual return on invested capital in Lumberton.
Is Lumberton a Good Place to Invest in Rental Property?
Lumberton, NC has a population of 50,000 and has been growing at 1.5% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $130,000 paired with median rents of $1,050/mo produces an estimated cap rate of 7.60%.
Property taxes at 0.78% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 5.3% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 2.2x, homes cost about 2.2 times the local median income of $58,267. 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 3.2% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Lumberton offers attractive fundamentals for rental investors. low taxes, and cap rates above 6% put it in the upper tier of investable markets.