Monroe, LA Cap Rate: 6.36% — Rental Property Analysis
Monroe is one of the most affordable markets in the country in the South with a small but investable metro of 50,000. At a 6.36% estimated cap rate, this is a solid market where rents of $1,100/mo lag behind home prices. With a median home price of $160,000 and population is roughly stable, Monroe 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 $160,000 median price and $1,100/mo median rent
Est. Cap Rate
6.36%
1% Rule
0.69%
Fails
GRM
12.1x
Price / Income
3.5x
Market Data
Median Home Price$160,000
Median Monthly Rent$1,100
Property Tax Rate0.54%
Population50,000
Population Growth0.3% / yr
Median Household Income$45,760
Vacancy Rate6.7%
Annual Appreciation2.1%
2026 Market Update: Monroe
Monroe's 0.7% rent-to-price ratio is well below the 1% rule. At median prices of $160,000, the $1,100/mo rent produces only $848/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 ($32K at 7%) would result in approximately $-3/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 12.1x gross rent multiplier and 6.7% vacancy rate position Monroe as a value-oriented market. With annual appreciation at 2.1%, total returns (cash flow + equity growth) run approximately 8.5% before financing leverage.
Cap Rate Calculator — Monroe
Pre-filled with Monroe medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
0.54% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
5.27%Moderate
Net Operating Income ÷ Purchase Price
NOI / Year
$8,440
net operating income
Gross Rent Multiplier
12.1x
Good (<15)
1% Rule
0.69%
✗ Fails
Monthly Cash Flow
$703
before debt service
Annual Breakdown
Gross Rental Income$13,200
Less Vacancy−$884
Effective Income$12,316
Less Operating Expenses−$3,876
Net Operating Income$8,440
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Factor in financing to see your actual return on invested capital in Monroe.
$
$40,000
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-3.87%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$44,800
$40,000 down + $4,800 closing
Monthly Mortgage
$782
on $120K loan
Monthly Cash Flow
$-144
after all expenses
Annual Cash Flow
$-1,732
before taxes
Cash Flow Breakdown
Monthly Rent$1,100
Less Expenses−$462
Less Mortgage−$782
Monthly Cash Flow$-144
Is Monroe a Good Place to Invest in Rental Property?
Monroe, LA has a population of 50,000 and has been growing at 0.3% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $160,000 paired with median rents of $1,100/mo produces an estimated cap rate of 6.36%.
Property taxes at 0.54% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 6.7% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 3.5x, homes cost about 3.5 times the local median income of $45,760. 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 2.1% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Monroe 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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