Miami, FL Cap Rate: 4.74% — Rental Property Analysis
Miami is a higher-priced market in the South with a mid-sized city of 467,963. At a 4.74% estimated cap rate, this is a moderate market where rents of $2,650/mo lag behind home prices. With a median home price of $470,000 and steady population growth supports long-term rental demand, Miami 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
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Moderate — source deals carefully
Based on $470,000 median price and $2,650/mo median rent
Est. Cap Rate
4.74%
1% Rule
0.56%
Fails
GRM
14.8x
Price / Income
10.6x
Market Data
Median Home Price$470,000
Median Monthly Rent$2,650
Property Tax Rate0.89%
Population467,963
Population Growth1.2% / yr
Median Household Income$44,200
Vacancy Rate5%
Annual Appreciation4.5%
2026 Market Update: Miami
Miami's 0.6% rent-to-price ratio is well below the 1% rule. At median prices of $470,000, the $2,650/mo rent produces only $1,856/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 ($94K at 7%) would result in approximately $-644/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 14.8x gross rent multiplier and 5% vacancy rate position Miami as a balanced market. With annual appreciation at 4.5%, total returns (cash flow + equity growth) run approximately 9.2% before financing leverage.
Cap Rate Calculator — Miami
Pre-filled with Miami medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
0.89% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
3.92%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$18,414
net operating income
Gross Rent Multiplier
14.8x
Good (<15)
1% Rule
0.56%
✗ Fails
Monthly Cash Flow
$1,535
before debt service
Annual Breakdown
Gross Rental Income$31,800
Less Vacancy−$1,590
Effective Income$30,210
Less Operating Expenses−$11,796
Net Operating Income$18,414
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Factor in financing to see your actual return on invested capital in Miami.
$
$117,500
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-6.94%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$131,600
$117,500 down + $14,100 closing
Monthly Mortgage
$2,298
on $353K loan
Monthly Cash Flow
$-761
after all expenses
Annual Cash Flow
$-9,132
before taxes
Cash Flow Breakdown
Monthly Rent$2,650
Less Expenses−$1,113
Less Mortgage−$2,298
Monthly Cash Flow$-761
Is Miami a Good Place to Invest in Rental Property?
Miami, FL has a population of 467,963 and has been growing at 1.2% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $470,000 paired with median rents of $2,650/mo produces an estimated cap rate of 4.74%.
Property taxes at 0.89% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 5% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 10.6x, homes cost about 10.6 times the local median income of $44,200. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. Home values have appreciated at roughly 4.5% annually. Above-average appreciation adds an equity component to total returns, though deals should still pencil on cash flow alone.
Bottom line: Miami presents moderate opportunities. Cap rates near 4.74% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.
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