Portales, NM Cap Rate: 6.02% — Rental Property Analysis
Portales is one of the most affordable markets in the country in the West with a small but investable metro of 50,000. At a 6.02% estimated cap rate, this is a solid market where rents of $970/mo lag behind home prices. With a median home price of $145,000 and steady population growth supports long-term rental demand, Portales 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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Strong investment fundamentals
Based on $145,000 median price and $970/mo median rent
Est. Cap Rate
6.02%
1% Rule
0.67%
Fails
GRM
12.5x
Price / Income
2.8x
Market Data
Median Home Price$145,000
Median Monthly Rent$970
Property Tax Rate0.77%
Population50,000
Population Growth0.8% / yr
Median Household Income$51,750
Vacancy Rate5.5%
Annual Appreciation2.7%
2026 Market Update: Portales
Portales's 0.7% rent-to-price ratio is well below the 1% rule. At median prices of $145,000, the $970/mo rent produces only $727/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 ($29K at 7%) would result in approximately $-44/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 12.5x gross rent multiplier and 5.5% vacancy rate position Portales as a value-oriented market. With annual appreciation at 2.7%, total returns (cash flow + equity growth) run approximately 8.7% before financing leverage.
Cap Rate Calculator — Portales
Pre-filled with Portales medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
0.77% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
4.97%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$7,208
net operating income
Gross Rent Multiplier
12.5x
Good (<15)
1% Rule
0.67%
✗ Fails
Monthly Cash Flow
$601
before debt service
Annual Breakdown
Gross Rental Income$11,640
Less Vacancy−$640
Effective Income$11,000
Less Operating Expenses−$3,792
Net Operating Income$7,208
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Factor in financing to see your actual return on invested capital in Portales.
$
$36,250
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-4.31%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$40,600
$36,250 down + $4,350 closing
Monthly Mortgage
$709
on $109K loan
Monthly Cash Flow
$-146
after all expenses
Annual Cash Flow
$-1,752
before taxes
Cash Flow Breakdown
Monthly Rent$970
Less Expenses−$407
Less Mortgage−$709
Monthly Cash Flow$-146
Is Portales a Good Place to Invest in Rental Property?
Portales, NM has a population of 50,000 and has been growing at 0.8% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $145,000 paired with median rents of $970/mo produces an estimated cap rate of 6.02%.
Property taxes at 0.77% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 5.5% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 2.8x, homes cost about 2.8 times the local median income of $51,750. 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 2.7% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Portales offers attractive fundamentals for rental investors. low taxes, and cap rates above 6% put it in the upper tier of investable markets.
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