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Cap Rate Analysis: Tuscaloosa, AL

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

Moderate — source deals carefully
Based on $195,000 median price and $1,120/mo median rent
Est. Cap Rate
5.23%
1% Rule
0.57%
Fails
GRM
14.5x
Price / Income
4.6x

Market Data

Median Home Price$195,000
Median Monthly Rent$1,120
Property Tax Rate0.43%
Population110,000
Population Growth0.8% / yr
Median Household Income$42,800
Vacancy Rate6.2%
Annual Appreciation2.4%

Cap Rate Calculator — Tuscaloosa

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

Property Details
$
$
3–8% typical
%
Monthly Expenses
0.43% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
4.39%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$8,563
net operating income
Gross Rent Multiplier
14.5x
Good (<15)
1% Rule
0.57%
✗ Fails
Monthly Cash Flow
$714
before debt service
Annual Breakdown
Gross Rental Income$13,440
Less Vacancy−$833
Effective Income$12,607
Less Operating Expenses−$4,044
Net Operating Income$8,563

Cash-on-Cash Return — Tuscaloosa

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

$
$48,750
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-6.67%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$54,600
$48,750 down + $5,850 closing
Monthly Mortgage
$953
on $146K loan
Monthly Cash Flow
$-303
after all expenses
Annual Cash Flow
$-3,641
before taxes
Cash Flow Breakdown
Monthly Rent$1,120
Less Expenses−$470
Less Mortgage−$953
Monthly Cash Flow$-303

Is Tuscaloosa a Good Place to Invest in Rental Property?

Tuscaloosa, AL has a population of 110,000 and has been growing at 0.8% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $195,000 paired with median rents of $1,120/mo produces an estimated cap rate of 5.23%.

Property taxes at 0.43% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 6.2% is moderate and within normal parameters for a healthy rental market.

At a price-to-income ratio of 4.6x, homes cost about 4.6 times the local median income of $42,800. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 2.4% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.

Bottom line: Tuscaloosa presents moderate opportunities. Cap rates near 5.23% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.

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