Overland Park, KS Cap Rate 3.20%
Overland Park is the premier suburb of the Kansas City metro — anchored by the broader KC corporate base, premium school districts (Blue Valley, Shawnee Mission), and one of the wealthier suburban populations in the Midwest. The 3.20% cap rate at a $315,000 median price reflects premium positioning. The 0.47% rent-to-price ratio sits below the 1% rule. Population growth at 1.2%/yr is steady.
Employment is anchored by the broader Kansas City metro economy (most working Overland Park residents commute to the broader KC corporate base — Cerner / Oracle Health, Honeywell Federal Manufacturing, the broader KC professional services), the T-Mobile (formerly Sprint HQ — the legacy Sprint corporate campus in Overland Park became T-Mobile's major US Central operations after the 2020 merger; the broader telecom employer base persists at meaningful scale), AdventHealth Shawnee Mission, the broader Saint Luke's South Hospital, the Black & Veatch headquarters, Black Box Network Services, the broader Blue Valley and Shawnee Mission school districts (consistently among the highest-ranked US public school districts — a primary structural draw for relocating families), Johnson County Community College, and the broader Johnson County government. Submarkets stratify cleanly: the historic Downtown Overland Park is walkable urban with strong appreciation; the broader Blue Valley school-district zones (south Overland Park) are premium suburban-school; the broader Shawnee Mission school-district zones (north Overland Park) are family-school suburban; the broader Overland Park extends with newer construction.
Kansas property tax at 1.38% is on the higher end nationally for the Plains region — Kansas has historically had elevated effective property tax rates. Kansas state income tax is graduated with a top rate near 5.7%. Insurance is reasonable but verify tornado / hail deductible structure (KC area has meaningful severe-weather exposure). The structural advantages: premium school districts provide sustained family-rental demand; T-Mobile legacy operations + AdventHealth + Black & Veatch provide white-collar employer concentration unusual for a Midwest suburb; cost basis is materially below comparable east-coast or west-coast premium suburbs. The structural risks: heavy KS property tax structure is a real drag on returns; T-Mobile's broader corporate decisions about the Overland Park campus matter for white-collar employment; population growth has slowed from earlier-decade peaks. For investors who want premium Midwest suburban exposure with school-district-driven rental demand, Overland Park is the most defensible KC-metro option.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
Market Data
2026 Market Update: Overland Park
Overland Park's 0.5% rent-to-price ratio is well below the 1% rule. At median prices of $315,000, the $1,480/mo rent produces only $841/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 ($63K at 7%) would result in approximately $-835/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 24% of gross rent here — one of the highest ratios in our dataset. This significantly compresses margins and makes Overland Park a market where tax-conscious underwriting is essential. Every deal should be stress-tested with potential assessment increases.
Deal Modeling & Scenarios for Overland Park
All figures below are computed from Overland Park's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
Property Tax Bill in Real Dollars
At 1.38% effective rate on the $315,000 median price, the annual tax bill is $4,347 — that's above national average (+30% 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 Overland Park continues appreciating at 3%/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 | $315K | $1,480 | 3.2% |
| Year 1 | $324K | $1,524 | 3.2% |
| Year 2 | $334K | $1,570 | 3.2% |
| Year 3 | $344K | $1,617 | 3.2% |
| Year 4 | $355K | $1,666 | 3.2% |
| Year 5 | $365K | $1,716 | 3.2% |
Three Financing Scenarios
Same median-priced Overland Park 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 | $315K | $841 | $10,094 | 3.2% |
| 20% down conventional @ 7% | $72K | $-835 | $-10,016 | -13.8% |
| 25% down DSCR @ 8.5% | $91K | $-976 | $-11,707 | -12.8% |
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) | $236K | $1,258 | $7,796 | 3.3% | $650 |
| At median | $315K | $1,480 | $8,512 | 2.7% | $709 |
| Above median (~125% price) | $394K | $1,702 | $9,228 | 2.3% | $769 |
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 Overland Park's historical appreciation rate of 3%:
On a $63K down payment, that's a 30.1% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Risk Flags Specific to Overland Park
Automated checks against the underlying data — surface only the risks that actually apply to Overland Park, not generic boilerplate:
Cap Rate Calculator — Overland Park
Pre-filled with Overland Park medians. Adjust to match a specific property.
Cash-on-Cash Return — Overland Park
Factor in financing to see your actual return on invested capital in Overland Park.
Is Overland Park a Good Place to Invest in Rental Property?
Overland Park, KS has a population of 199,600 and has been growing at 1.2% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $315,000 paired with median rents of $1,480/mo produces an estimated cap rate of 3.20%.
Property taxes at 1.38% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 4.5% is impressively low, indicating tight rental supply and strong tenant demand — favorable for landlords.
At a price-to-income ratio of 3.8x, homes cost about 3.8 times the local median income of $82,400. 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 3% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: At current median prices, Overland Park 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.