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Cap Rate Analysis: Scottsdale, AZ

Investment metrics, interactive calculators, and data-driven analysis for Scottsdale rental properties.

Challenging for pure cash flow
Based on $620,000 median price and $2,200/mo median rent
Est. Cap Rate
2.69%
1% Rule
0.35%
Fails
GRM
23.5x
Price / Income
6.7x

Market Data

Median Home Price$620,000
Median Monthly Rent$2,200
Property Tax Rate0.58%
Population250,602
Population Growth1.4% / yr
Median Household Income$92,400
Vacancy Rate4.5%
Annual Appreciation3.2%

Cap Rate Calculator — Scottsdale

Pre-filled with Scottsdale medians. Adjust to match a specific property.

Property Details
$
$
3–8% typical
%
Monthly Expenses
0.58% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
2.32%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$14,376
net operating income
Gross Rent Multiplier
23.5x
High (>15)
1% Rule
0.35%
✗ Fails
Monthly Cash Flow
$1,198
before debt service
Annual Breakdown
Gross Rental Income$26,400
Less Vacancy−$1,188
Effective Income$25,212
Less Operating Expenses−$10,836
Net Operating Income$14,376

Cash-on-Cash Return — Scottsdale

Factor in financing to see your actual return on invested capital in Scottsdale.

$
$155,000
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-12.13%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$173,600
$155,000 down + $18,600 closing
Monthly Mortgage
$3,031
on $465K loan
Monthly Cash Flow
$-1,755
after all expenses
Annual Cash Flow
$-21,065
before taxes
Cash Flow Breakdown
Monthly Rent$2,200
Less Expenses−$924
Less Mortgage−$3,031
Monthly Cash Flow$-1,755

Is Scottsdale a Good Place to Invest in Rental Property?

Scottsdale, AZ has a population of 250,602 and has been growing at 1.4% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $620,000 paired with median rents of $2,200/mo produces an estimated cap rate of 2.69%.

Property taxes at 0.58% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. 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 6.7x, homes cost about 6.7 times the local median income of $92,400. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. Home values have appreciated at roughly 3.2% 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, Scottsdale 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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