7 Montana cities ranked by estimated cap rate. The average cap rate across Montana markets is 2.5%, with median home prices averaging $477K and rents averaging $1,620/mo. Butte leads with a 3.9% cap rate at a $275K median price. Montana's low average property tax rate of 0.76% gives investors a significant cash flow advantage.
Montana offers 7 investable rental markets tracked by CapRateCity. The state average cap rate of 2.5% 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: Montana home prices average $477K, which is 43% above the national average of $333K. Rents average $1,620/mo.
Taxes and costs: Property taxes average 0.76% across Montana, below the 1.08% national average — a meaningful cash flow advantage that adds roughly $1,527 per year to NOI on an average-priced property. Billings has the lowest rate at 0.74%.Vacancy averages 4.4%, tighter than the national average — favorable for landlords.
Growth outlook: Population growth across Montana averages 1.50% per year, led by Bozeman at 3.5%. Home values are appreciating at 2.6% annually on average. Strong population growth is driving housing demand and supporting both rent increases and price appreciation across the state.
Bottom line: Montana 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.