Mobile, AL Cap Rate: 6.18% — Rental Property Analysis
Mobile is a budget-friendly market in the South with a mid-sized city of 188,720. At a 6.18% estimated cap rate, this is a solid market where rents of $1,270/mo lag behind home prices. With a median home price of $190,000 and population is roughly stable, Mobile 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
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Strong investment fundamentals
Based on $190,000 median price and $1,270/mo median rent
Est. Cap Rate
6.18%
1% Rule
0.67%
Fails
GRM
12.5x
Price / Income
4.7x
Market Data
Median Home Price$190,000
Median Monthly Rent$1,270
Property Tax Rate0.44%
Population188,720
Population Growth0.1% / yr
Median Household Income$40,800
Vacancy Rate7.5%
Annual Appreciation1.8%
2026 Market Update: Mobile
Mobile's 0.7% rent-to-price ratio is well below the 1% rule. At median prices of $190,000, the $1,270/mo rent produces only $978/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 ($38K at 7%) would result in approximately $-33/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 12.5x gross rent multiplier and 7.5% vacancy rate position Mobile as a value-oriented market. With annual appreciation at 1.8%, total returns (cash flow + equity growth) run approximately 8.0% before financing leverage.
Cap Rate Calculator — Mobile
Pre-filled with Mobile medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
0.44% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
5.13%Moderate
Net Operating Income ÷ Purchase Price
NOI / Year
$9,753
net operating income
Gross Rent Multiplier
12.5x
Good (<15)
1% Rule
0.67%
✗ Fails
Monthly Cash Flow
$813
before debt service
Annual Breakdown
Gross Rental Income$15,240
Less Vacancy−$1,143
Effective Income$14,097
Less Operating Expenses−$4,344
Net Operating Income$9,753
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Factor in financing to see your actual return on invested capital in Mobile.
$
$47,500
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-4.33%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$53,200
$47,500 down + $5,700 closing
Monthly Mortgage
$929
on $143K loan
Monthly Cash Flow
$-192
after all expenses
Annual Cash Flow
$-2,304
before taxes
Cash Flow Breakdown
Monthly Rent$1,270
Less Expenses−$533
Less Mortgage−$929
Monthly Cash Flow$-192
Is Mobile a Good Place to Invest in Rental Property?
Mobile, AL has a population of 188,720 and has been growing at 0.1% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $190,000 paired with median rents of $1,270/mo produces an estimated cap rate of 6.18%.
Property taxes at 0.44% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 7.5% runs above average, which increases cash flow volatility and warrants conservative underwriting.
At a price-to-income ratio of 4.7x, homes cost about 4.7 times the local median income of $40,800. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 1.8% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Mobile offers attractive fundamentals for rental investors. low taxes, and cap rates above 6% put it in the upper tier of investable markets.
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