Orlando, FL Cap Rate: 4.00% — Rental Property Analysis
Orlando is a higher-priced market in the South with a mid-sized city of 322,587. At a 4.00% estimated cap rate, this is a appreciation-focused market where rents of $1,920/mo lag behind home prices. With a median home price of $385,000 and steady population growth supports long-term rental demand, Orlando 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 $385,000 median price and $1,920/mo median rent
Est. Cap Rate
4.00%
1% Rule
0.50%
Fails
GRM
16.7x
Price / Income
7.0x
Market Data
Median Home Price$385,000
Median Monthly Rent$1,920
Property Tax Rate0.89%
Population322,587
Population Growth2% / yr
Median Household Income$55,100
Vacancy Rate5%
Annual Appreciation4%
2026 Market Update: Orlando
Orlando's 0.5% rent-to-price ratio is well below the 1% rule. At median prices of $385,000, the $1,920/mo rent produces only $1,282/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 ($77K at 7%) would result in approximately $-766/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 16.7x gross rent multiplier and 5% vacancy rate position Orlando as a balanced market. With annual appreciation at 4%, total returns (cash flow + equity growth) run approximately 8.0% before financing leverage.
Cap Rate Calculator — Orlando
Pre-filled with Orlando medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
0.89% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
3.32%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$12,768
net operating income
Gross Rent Multiplier
16.7x
High (>15)
1% Rule
0.50%
✗ Fails
Monthly Cash Flow
$1,064
before debt service
Annual Breakdown
Gross Rental Income$23,040
Less Vacancy−$1,152
Effective Income$21,888
Less Operating Expenses−$9,120
Net Operating Income$12,768
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Factor in financing to see your actual return on invested capital in Orlando.
$
$96,250
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-8.55%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$107,800
$96,250 down + $11,550 closing
Monthly Mortgage
$1,882
on $289K loan
Monthly Cash Flow
$-768
after all expenses
Annual Cash Flow
$-9,221
before taxes
Cash Flow Breakdown
Monthly Rent$1,920
Less Expenses−$806
Less Mortgage−$1,882
Monthly Cash Flow$-768
Is Orlando a Good Place to Invest in Rental Property?
Orlando, FL has a population of 322,587 and has been growing at 2% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $385,000 paired with median rents of $1,920/mo produces an estimated cap rate of 4.00%.
Property taxes at 0.89% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 5% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 7.0x, homes cost about 7.0 times the local median income of $55,100. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. Home values have appreciated at roughly 4% 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, Orlando 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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