Madera, CA Cap Rate 4.41%
Madera is a higher-priced market in the West with a small but investable metro of 50,000. At a 4.41% estimated cap rate, this is a moderate market where rents of $2,200/mo lag behind home prices. With a median home price of $420,000 and steady population growth supports long-term rental demand, Madera 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: Madera
Madera's 0.5% rent-to-price ratio is well below the 1% rule. At median prices of $420,000, the $2,200/mo rent produces only $1,543/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 ($84K at 7%) would result in approximately $-691/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.
The 15.9x gross rent multiplier and 5.2% vacancy rate position Madera as a balanced market. With annual appreciation at 2.8%, total returns (cash flow + equity growth) run approximately 7.2% before financing leverage.
Deal Modeling & Scenarios for Madera
All figures below are computed from Madera's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
Property Tax Bill in Real Dollars
At 0.75% effective rate on the $420,000 median price, the annual tax bill is $3,150 — that's below national average (-29% 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 Madera continues appreciating at 2.8%/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 | $420K | $2,200 | 4.4% |
| Year 1 | $432K | $2,266 | 4.4% |
| Year 2 | $444K | $2,334 | 4.4% |
| Year 3 | $456K | $2,404 | 4.4% |
| Year 4 | $469K | $2,476 | 4.4% |
| Year 5 | $482K | $2,550 | 4.5% |
Three Financing Scenarios
Same median-priced Madera 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 | $420K | $1,543 | $18,517 | 4.4% |
| 20% down conventional @ 7% | $97K | $-691 | $-8,296 | -8.6% |
| 25% down DSCR @ 8.5% | $122K | $-879 | $-10,551 | -8.7% |
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) | $315K | $1,870 | $14,060 | 4.5% | $1,172 |
| At median | $420K | $2,200 | $15,973 | 3.8% | $1,331 |
| Above median (~125% price) | $525K | $2,530 | $17,886 | 3.4% | $1,491 |
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 Madera's historical appreciation rate of 2.8%:
On a $84K down payment, that's a 54.7% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Risk Flags Specific to Madera
Automated checks against the underlying data — surface only the risks that actually apply to Madera, not generic boilerplate:
Cap Rate Calculator — Madera
Pre-filled with Madera medians. Adjust to match a specific property.
Cash-on-Cash Return — Madera
Factor in financing to see your actual return on invested capital in Madera.
Is Madera a Good Place to Invest in Rental Property?
Madera, 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 $420,000 paired with median rents of $2,200/mo produces an estimated cap rate of 4.41%.
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 7.0x, homes cost about 7.0 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: Madera presents moderate opportunities. Cap rates near 4.41% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.