Mountain Home, ID Cap Rate 4.21%
Mountain Home is a higher-priced market in the West with a small but investable metro of 50,000. At a 4.21% estimated cap rate, this is a moderate market where rents of $1,720/mo lag behind home prices. With a median home price of $350,000 and rapid population growth is driving housing demand, Mountain Home 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: Mountain Home
Mountain Home's 0.5% rent-to-price ratio is well below the 1% rule. At median prices of $350,000, the $1,720/mo rent produces only $1,228/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 ($70K at 7%) would result in approximately $-634/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.
With 2.6% annual population growth paired with 2.4% home appreciation, Mountain Home offers a rare combination of current cash flow and future equity upside. The 17.0x gross rent multiplier suggests the market hasn't fully priced in this growth trajectory.
Deal Modeling & Scenarios for Mountain Home
All figures below are computed from Mountain Home's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
Property Tax Bill in Real Dollars
At 0.64% effective rate on the $350,000 median price, the annual tax bill is $2,240 — that's below national average (-40% 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 Mountain Home continues appreciating at 2.4%/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 | $350K | $1,720 | 4.2% |
| Year 1 | $358K | $1,772 | 4.2% |
| Year 2 | $367K | $1,825 | 4.3% |
| Year 3 | $376K | $1,879 | 4.3% |
| Year 4 | $385K | $1,936 | 4.3% |
| Year 5 | $394K | $1,994 | 4.3% |
Three Financing Scenarios
Same median-priced Mountain Home 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 | $350K | $1,228 | $14,733 | 4.2% |
| 20% down conventional @ 7% | $81K | $-634 | $-7,611 | -9.5% |
| 25% down DSCR @ 8.5% | $102K | $-791 | $-9,490 | -9.4% |
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) | $263K | $1,462 | $11,270 | 4.3% | $939 |
| At median | $350K | $1,720 | $12,831 | 3.7% | $1,069 |
| Above median (~125% price) | $438K | $1,978 | $14,391 | 3.3% | $1,199 |
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 Mountain Home's historical appreciation rate of 2.4%:
On a $70K down payment, that's a 38.6% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Risk Flags Specific to Mountain Home
Automated checks against the underlying data — surface only the risks that actually apply to Mountain Home, not generic boilerplate:
Cap Rate Calculator — Mountain Home
Pre-filled with Mountain Home medians. Adjust to match a specific property.
Cash-on-Cash Return — Mountain Home
Factor in financing to see your actual return on invested capital in Mountain Home.
Is Mountain Home a Good Place to Invest in Rental Property?
Mountain Home, ID has a population of 50,000 and has been growing at 2.6% annually — well above the national average, signaling strong housing demand from population inflows. The median home price of $350,000 paired with median rents of $1,720/mo produces an estimated cap rate of 4.21%.
Property taxes at 0.64% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 4.2% is impressively low, indicating tight rental supply and strong tenant demand — favorable for landlords.
At a price-to-income ratio of 6.0x, homes cost about 6.0 times the local median income of $58,040. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. Home values have appreciated at roughly 2.4% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Mountain Home presents moderate opportunities. Cap rates near 4.21% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.