7 South Dakota cities ranked by estimated cap rate. The average cap rate across South Dakota markets is 2.2%, with median home prices averaging $300K and rents averaging $1,106/mo. Brookings leads with a 3.3% cap rate at a $310K median price. Property taxes average 1.20% across South Dakota markets.
South Dakota offers 7 investable rental markets tracked by CapRateCity. The state average cap rate of 2.2% 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: South Dakota home prices average $300K, which is 10% below the national average of $333K. Rents average $1,106/mo. The most affordable entry point is Aberdeen at $230K, while Brookings offers the highest cap rate at 3.3%.
Taxes and costs: Property taxes average 1.20% across South Dakota, above the 1.08% national average — investors should model tax expense carefully. Rapid City has the lowest rate at 1.18%.Vacancy averages 4.9%, tighter than the national average — favorable for landlords.
Growth outlook: Population growth across South Dakota averages 1.40% per year, led by Sioux Falls at 1.8%. Home values are appreciating at 2.7% annually on average. Strong population growth is driving housing demand and supporting both rent increases and price appreciation across the state.
Bottom line: South Dakota 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.