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Cap Rate Analysis: Surprise, AZ

Investment metrics, interactive calculators, and data-driven analysis for Surprise rental properties.

Challenging for pure cash flow
Based on $385,000 median price and $1,580/mo median rent
Est. Cap Rate
3.29%
1% Rule
0.41%
Fails
GRM
20.3x
Price / Income
5.6x

Market Data

Median Home Price$385,000
Median Monthly Rent$1,580
Property Tax Rate0.6%
Population155,000
Population Growth2.5% / yr
Median Household Income$68,200
Vacancy Rate4.8%
Annual Appreciation3.1%

Cap Rate Calculator — Surprise

Pre-filled with Surprise medians. Adjust to match a specific property.

Property Details
$
$
3–8% typical
%
Monthly Expenses
0.6% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
2.80%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$10,790
net operating income
Gross Rent Multiplier
20.3x
High (>15)
1% Rule
0.41%
✗ Fails
Monthly Cash Flow
$899
before debt service
Annual Breakdown
Gross Rental Income$18,960
Less Vacancy−$910
Effective Income$18,050
Less Operating Expenses−$7,260
Net Operating Income$10,790

Cash-on-Cash Return — Surprise

Factor in financing to see your actual return on invested capital in Surprise.

$
$96,250
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-10.76%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$107,800
$96,250 down + $11,550 closing
Monthly Mortgage
$1,882
on $289K loan
Monthly Cash Flow
$-966
after all expenses
Annual Cash Flow
$-11,597
before taxes
Cash Flow Breakdown
Monthly Rent$1,580
Less Expenses−$664
Less Mortgage−$1,882
Monthly Cash Flow$-966

Is Surprise a Good Place to Invest in Rental Property?

Surprise, AZ has a population of 155,000 and has been growing at 2.5% annually — well above the national average, signaling strong housing demand from population inflows. The median home price of $385,000 paired with median rents of $1,580/mo produces an estimated cap rate of 3.29%.

Property taxes at 0.6% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 4.8% is impressively low, indicating tight rental supply and strong tenant demand — favorable for landlords.

At a price-to-income ratio of 5.6x, homes cost about 5.6 times the local median income of $68,200. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 3.1% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.

Bottom line: At current median prices, Surprise is challenging for pure cash flow investing. Consider BRRRR strategies with below-market purchases, or look at neighboring metros with stronger price-to-rent ratios.

Run a BRRRR analysis for Surprise
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