14 Iowa cities ranked by estimated cap rate. The average cap rate across Iowa markets is 3.1%, with median home prices averaging $214K and rents averaging $1,010/mo. Burlington leads with a 4.7% cap rate at a $140K median price. Note that Iowa's average property tax rate of 1.51% is above the national average — factor this into your underwriting.
Iowa offers 14 investable rental markets tracked by CapRateCity. The state average cap rate of 3.1% is near the 3.81% national average. No cities pass the 1% rule at median prices, so value-add strategies are essential.
Prices and rents: Iowa home prices average $214K, which is 36% below the national average of $333K. Rents average $1,010/mo.
Taxes and costs: Property taxes average 1.51% across Iowa, above the 1.08% national average — investors should model tax expense carefully. Cedar Rapids has the lowest rate at 1.48%.Vacancy averages 5.6%, tighter than the national average — favorable for landlords.
Growth outlook: Population growth across Iowa averages 0.39% per year, led by Ames at 0.8%. Home values are appreciating at 2.3% annually on average. Moderate growth provides a stable demand foundation.
Bottom line: Iowa is primarily an appreciation market. Cash flow investing requires below-median purchases or value-add strategies. Consider whether the growth and appreciation potential justifies tighter margins.