Sarasota, FL Cap Rate: 4.32% — Rental Property Analysis
Sarasota is a higher-priced market in the South with a smaller market with 58,900 residents. At a 4.32% estimated cap rate, this is a moderate market where rents of $2,090/mo lag behind home prices. With a median home price of $400,000 and steady population growth supports long-term rental demand, Sarasota offers opportunities for investors who source deals carefully.
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 $400,000 median price and $2,090/mo median rent
Est. Cap Rate
4.32%
1% Rule
0.52%
Fails
GRM
15.9x
Price / Income
7.1x
Market Data
Median Home Price$400,000
Median Monthly Rent$2,090
Property Tax Rate0.86%
Population58,900
Population Growth1.8% / yr
Median Household Income$56,200
Vacancy Rate4.6%
Annual Appreciation4.2%
2026 Market Update: Sarasota
Sarasota's 0.5% rent-to-price ratio is well below the 1% rule. At median prices of $400,000, the $2,090/mo rent produces only $1,441/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 ($80K at 7%) would result in approximately $-687/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.
With 1.8% annual population growth paired with 4.2% home appreciation, Sarasota offers a rare combination of current cash flow and future equity upside. The 15.9x gross rent multiplier suggests the market hasn't fully priced in this growth trajectory.
Cap Rate Calculator — Sarasota
Pre-filled with Sarasota 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
3.59%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$14,374
net operating income
Gross Rent Multiplier
15.9x
High (>15)
1% Rule
0.52%
✗ Fails
Monthly Cash Flow
$1,198
before debt service
Annual Breakdown
Gross Rental Income$25,080
Less Vacancy−$1,154
Effective Income$23,926
Less Operating Expenses−$9,552
Net Operating Income$14,374
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Factor in financing to see your actual return on invested capital in Sarasota.
$
$100,000
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-7.97%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$112,000
$100,000 down + $12,000 closing
Monthly Mortgage
$1,956
on $300K loan
Monthly Cash Flow
$-744
after all expenses
Annual Cash Flow
$-8,925
before taxes
Cash Flow Breakdown
Monthly Rent$2,090
Less Expenses−$878
Less Mortgage−$1,956
Monthly Cash Flow$-744
Is Sarasota a Good Place to Invest in Rental Property?
Sarasota, FL has a population of 58,900 and has been growing at 1.8% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $400,000 paired with median rents of $2,090/mo produces an estimated cap rate of 4.32%.
Property taxes at 0.86% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 4.6% is impressively low, indicating tight rental supply and strong tenant demand — favorable for landlords.
At a price-to-income ratio of 7.1x, homes cost about 7.1 times the local median income of $56,200. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. Home values have appreciated at roughly 4.2% annually. Above-average appreciation adds an equity component to total returns, though deals should still pencil on cash flow alone.
Bottom line: Sarasota presents moderate opportunities. Cap rates near 4.32% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.
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