Naples, FL Cap Rate: 3.85% — Rental Property Analysis
Naples is a premium-priced metro in the South with a small but investable metro of 50,000. At a 3.85% estimated cap rate, this is a appreciation-focused market where rents of $2,690/mo lag behind home prices. With a median home price of $555,000 and steady population growth supports long-term rental demand, Naples is primarily an appreciation play that requires creative strategies to generate positive cash flow.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
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Challenging for pure cash flow
Based on $555,000 median price and $2,690/mo median rent
Est. Cap Rate
3.85%
1% Rule
0.48%
Fails
GRM
17.2x
Price / Income
11.0x
Market Data
Median Home Price$555,000
Median Monthly Rent$2,690
Property Tax Rate0.86%
Population50,000
Population Growth1.9% / yr
Median Household Income$50,639
Vacancy Rate5.2%
Annual Appreciation3.7%
2026 Market Update: Naples
Naples's 0.5% rent-to-price ratio is well below the 1% rule. At median prices of $555,000, the $2,690/mo rent produces only $1,782/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 ($111K at 7%) would result in approximately $-1,171/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 17.2x gross rent multiplier and 5.2% vacancy rate position Naples as a balanced market. With annual appreciation at 3.7%, total returns (cash flow + equity growth) run approximately 7.6% before financing leverage.
Cap Rate Calculator — Naples
Pre-filled with Naples medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
0.86% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
3.21%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$17,797
net operating income
Gross Rent Multiplier
17.2x
High (>15)
1% Rule
0.48%
✗ Fails
Monthly Cash Flow
$1,483
before debt service
Annual Breakdown
Gross Rental Income$32,280
Less Vacancy−$1,679
Effective Income$30,601
Less Operating Expenses−$12,804
Net Operating Income$17,797
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Factor in financing to see your actual return on invested capital in Naples.
$
$138,750
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-8.91%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$155,400
$138,750 down + $16,650 closing
Monthly Mortgage
$2,714
on $416K loan
Monthly Cash Flow
$-1,154
after all expenses
Annual Cash Flow
$-13,844
before taxes
Cash Flow Breakdown
Monthly Rent$2,690
Less Expenses−$1,130
Less Mortgage−$2,714
Monthly Cash Flow$-1,154
Is Naples a Good Place to Invest in Rental Property?
Naples, FL has a population of 50,000 and has been growing at 1.9% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $555,000 paired with median rents of $2,690/mo produces an estimated cap rate of 3.85%.
Property taxes at 0.86% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 5.2% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 11.0x, homes cost about 11.0 times the local median income of $50,639. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. Home values have appreciated at roughly 3.7% annually. Above-average appreciation adds an equity component to total returns, though deals should still pencil on cash flow alone.
Bottom line: At current median prices, Naples is challenging for pure cash flow investing. Consider BRRRR strategies with below-market purchases, or look at neighboring metros with stronger price-to-rent ratios.
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