Mount Pleasant, TX Cap Rate 5.42%
Mount Pleasant is a budget-friendly market in the South with a small but investable metro of 50,000. At a 5.42% estimated cap rate, this is a moderate market where rents of $1,510/mo lag behind home prices. With a median home price of $215,000 and steady population growth supports long-term rental demand, Mount Pleasant 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: Mount Pleasant
Mount Pleasant's 0.7% rent-to-price ratio is well below the 1% rule. At median prices of $215,000, the $1,510/mo rent produces only $971/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 ($43K at 7%) would result in approximately $-173/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.
Property taxes consume 20% of gross rent here — one of the highest ratios in our dataset. This significantly compresses margins and makes Mount Pleasant a market where tax-conscious underwriting is essential. Every deal should be stress-tested with potential assessment increases.
Deal Modeling & Scenarios for Mount Pleasant
All figures below are computed from Mount Pleasant's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
Property Tax Bill in Real Dollars
At 1.72% effective rate on the $215,000 median price, the annual tax bill is $3,698 — that's very high (top 15% of US markets) (+62% 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 Mount Pleasant continues appreciating at 2.7%/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 | $215K | $1,510 | 5.4% |
| Year 1 | $221K | $1,555 | 5.4% |
| Year 2 | $227K | $1,602 | 5.5% |
| Year 3 | $233K | $1,650 | 5.5% |
| Year 4 | $239K | $1,700 | 5.5% |
| Year 5 | $246K | $1,751 | 5.5% |
Three Financing Scenarios
Same median-priced Mount Pleasant 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 | $215K | $971 | $11,651 | 5.4% |
| 20% down conventional @ 7% | $49K | $-173 | $-2,075 | -4.2% |
| 25% down DSCR @ 8.5% | $62K | $-269 | $-3,229 | -5.2% |
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) | $161K | $1,284 | $8,631 | 5.4% | $719 |
| At median | $215K | $1,510 | $9,612 | 4.5% | $801 |
| Above median (~125% price) | $269K | $1,736 | $10,593 | 3.9% | $883 |
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 Mount Pleasant's historical appreciation rate of 2.7%:
On a $43K down payment, that's a 77.1% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Risk Flags Specific to Mount Pleasant
Automated checks against the underlying data — surface only the risks that actually apply to Mount Pleasant, not generic boilerplate:
Cap Rate Calculator — Mount Pleasant
Pre-filled with Mount Pleasant medians. Adjust to match a specific property.
Cash-on-Cash Return — Mount Pleasant
Factor in financing to see your actual return on invested capital in Mount Pleasant.
Is Mount Pleasant a Good Place to Invest in Rental Property?
Mount Pleasant, TX has a population of 50,000 and has been growing at 1.8% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $215,000 paired with median rents of $1,510/mo produces an estimated cap rate of 5.42%.
Property taxes at 1.72% are notably high and represent a significant drag on cash flow — model this expense carefully, as it can make or break a deal. The vacancy rate of 5.8% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 3.4x, homes cost about 3.4 times the local median income of $63,735. 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 2.7% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Mount Pleasant presents moderate opportunities. Cap rates near 5.42% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.