Owensboro, KY Cap Rate: 5.70% — Rental Property Analysis
Owensboro is a budget-friendly market in the South with a smaller market with 62,000 residents. At a 5.70% estimated cap rate, this is a solid market where rents of $1,330/mo lag behind home prices. With a median home price of $205,000 and population is roughly stable, Owensboro stands out as a market worth serious analysis for rental investors.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
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Moderate — source deals carefully
Based on $205,000 median price and $1,330/mo median rent
Est. Cap Rate
5.70%
1% Rule
0.65%
Fails
GRM
12.8x
Price / Income
4.6x
Market Data
Median Home Price$205,000
Median Monthly Rent$1,330
Property Tax Rate0.82%
Population62,000
Population Growth0.4% / yr
Median Household Income$44,800
Vacancy Rate6%
Annual Appreciation2.3%
2026 Market Update: Owensboro
Owensboro's 0.6% rent-to-price ratio is well below the 1% rule. At median prices of $205,000, the $1,330/mo rent produces only $973/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 ($41K at 7%) would result in approximately $-118/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 12.8x gross rent multiplier and 6% vacancy rate position Owensboro as a value-oriented market. With annual appreciation at 2.3%, total returns (cash flow + equity growth) run approximately 8.0% before financing leverage.
Cap Rate Calculator — Owensboro
Pre-filled with Owensboro medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
0.82% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
4.70%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$9,638
net operating income
Gross Rent Multiplier
12.8x
Good (<15)
1% Rule
0.65%
✗ Fails
Monthly Cash Flow
$803
before debt service
Annual Breakdown
Gross Rental Income$15,960
Less Vacancy−$958
Effective Income$15,002
Less Operating Expenses−$5,364
Net Operating Income$9,638
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Factor in financing to see your actual return on invested capital in Owensboro.
$
$51,250
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-4.84%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$57,400
$51,250 down + $6,150 closing
Monthly Mortgage
$1,002
on $154K loan
Monthly Cash Flow
$-231
after all expenses
Annual Cash Flow
$-2,776
before taxes
Cash Flow Breakdown
Monthly Rent$1,330
Less Expenses−$559
Less Mortgage−$1,002
Monthly Cash Flow$-231
Is Owensboro a Good Place to Invest in Rental Property?
Owensboro, KY has a population of 62,000 and has been growing at 0.4% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $205,000 paired with median rents of $1,330/mo produces an estimated cap rate of 5.70%.
Property taxes at 0.82% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 6% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 4.6x, homes cost about 4.6 times the local median income of $44,800. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 2.3% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Owensboro presents moderate opportunities. Cap rates near 5.70% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.
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