14 Kentucky cities ranked by estimated cap rate. The average cap rate across Kentucky markets is 4.8%, with median home prices averaging $225K and rents averaging $1,219/mo. London leads with a 6.6% cap rate at a $155K median price. Property taxes average 0.81% across Kentucky markets.
Kentucky offers 14 investable rental markets tracked by CapRateCity. The state average cap rate of 4.8% is above the 3.81% national average, making Kentucky an attractive state for cash flow investors. No cities pass the 1% rule at median prices, so value-add strategies are essential.
Prices and rents: Kentucky home prices average $225K, which is 33% below the national average of $333K. Rents average $1,219/mo.
Taxes and costs: Property taxes average 0.81% across Kentucky, below the 1.08% national average — a meaningful cash flow advantage that adds roughly $603 per year to NOI on an average-priced property. Bowling Green has the lowest rate at 0.8%.Vacancy averages 5.6%, in line with national norms.
Growth outlook: Population growth across Kentucky averages 0.79% per year, led by Bowling Green at 1.2%. Home values are appreciating at 2.8% annually on average. Moderate growth provides a stable demand foundation.
Bottom line: Kentucky offers moderate opportunities for rental investors. The best deals are in cities at the top of the ranking — use the calculators on each city page to model specific properties.