Sebastian, FL Cap Rate: 5.01% — Rental Property Analysis
Sebastian is a higher-priced market in the South with a small but investable metro of 50,000. At a 5.01% estimated cap rate, this is a moderate market where rents of $2,110/mo lag behind home prices. With a median home price of $360,000 and steady population growth supports long-term rental demand, Sebastian 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 $360,000 median price and $2,110/mo median rent
Est. Cap Rate
5.01%
1% Rule
0.59%
Fails
GRM
14.2x
Price / Income
7.1x
Market Data
Median Home Price$360,000
Median Monthly Rent$2,110
Property Tax Rate0.86%
Population50,000
Population Growth1.9% / yr
Median Household Income$50,639
Vacancy Rate5.2%
Annual Appreciation3.7%
2026 Market Update: Sebastian
Sebastian's 0.6% rent-to-price ratio is well below the 1% rule. At median prices of $360,000, the $2,110/mo rent produces only $1,502/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 ($72K at 7%) would result in approximately $-413/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 1.9% annual population growth paired with 3.7% home appreciation, Sebastian offers a rare combination of current cash flow and future equity upside. The 14.2x gross rent multiplier suggests the market hasn't fully priced in this growth trajectory.
Cap Rate Calculator — Sebastian
Pre-filled with Sebastian 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
4.14%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$14,907
net operating income
Gross Rent Multiplier
14.2x
Good (<15)
1% Rule
0.59%
✗ Fails
Monthly Cash Flow
$1,242
before debt service
Annual Breakdown
Gross Rental Income$25,320
Less Vacancy−$1,317
Effective Income$24,003
Less Operating Expenses−$9,096
Net Operating Income$14,907
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Factor in financing to see your actual return on invested capital in Sebastian.
$
$90,000
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-6.38%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$100,800
$90,000 down + $10,800 closing
Monthly Mortgage
$1,760
on $270K loan
Monthly Cash Flow
$-536
after all expenses
Annual Cash Flow
$-6,434
before taxes
Cash Flow Breakdown
Monthly Rent$2,110
Less Expenses−$886
Less Mortgage−$1,760
Monthly Cash Flow$-536
Is Sebastian a Good Place to Invest in Rental Property?
Sebastian, FL has a population of 50,000 and has been growing at 1.9% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $360,000 paired with median rents of $2,110/mo produces an estimated cap rate of 5.01%.
Property taxes at 0.86% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 5.2% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 7.1x, homes cost about 7.1 times the local median income of $50,639. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. Home values have appreciated at roughly 3.7% annually. Above-average appreciation adds an equity component to total returns, though deals should still pencil on cash flow alone.
Bottom line: Sebastian presents moderate opportunities. Cap rates near 5.01% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.
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