Virginia Beach is the largest city in Virginia by population and the eastern anchor of the Hampton Roads metro — built around Naval Air Station Oceana, a major Atlantic beach economy, and continued in-migration from the Northeast. The 4.02% cap rate at a $365,000 median price keeps the 0.49% rent-to-price ratio close to functional than coastal Florida markets. Population growth at 0.8%/yr is steady.
Employment is anchored by NAS Oceana (the Navy's Master Jet Base on the East Coast — home to multiple F/A-18 Super Hornet and EA-18G Growler squadrons, with the broader Department of Defense civilian and contractor workforce), the broader Hampton Roads military complex (Naval Station Norfolk across the bay, Joint Base Langley-Eustis, plus Coast Guard and Marine assets — collectively one of the largest US military employment concentrations), Sentara Healthcare and Bon Secours hospitals, Old Dominion University, the broader tourism / hospitality / beach economy (Virginia Beach is a major regional summer destination, with the Boardwalk and Atlantic Avenue corridor producing seasonal rental and STR demand), and a meaningful federal and contracting workforce tied to the broader Hampton Roads federal employment. Submarkets stratify around base proximity and water access: the oceanfront / North End and Croatan are premium beachfront with STR overlay; the Great Neck and Princess Anne areas draw officer family rentals at premium pricing; the Kempsville / Lake Smith / Salem corridor is family-school suburban; the inland Pungo / Sandbridge areas are quieter premium rural; the central / western Virginia Beach zones offer more workforce inventory.
Virginia property tax at 0.79% is moderate. VA state income tax is graduated with a top rate near 5.75%. Insurance is the dominant operational variable for beachfront and flood-zone properties — Virginia Beach has meaningful hurricane and Atlantic storm exposure (Hurricane Isabel in 2003 is the most recent major reference, but Virginia Beach also faces the same broader East Coast sea-level rise as Norfolk). Get a binder quote per address and pull flood-zone designations carefully. BAH (Basic Allowance for Housing) sets a predictable rent floor in submarkets near NAS Oceana — pull current BAH tables before underwriting. STR regulation: Virginia Beach requires STR registration with density caps in residential zones; verify per parcel. The structural advantages: durable Navy + federal employment, year-round tourism floor, accessible beach lifestyle. The structural risks: hurricane and flood exposure are real, AICUZ (noise zone) restrictions near NAS Oceana affect certain neighborhoods' long-term value, and the 2019 Virginia Beach mass shooting at the municipal complex highlights ongoing recovery and trust issues in the city operations. For investors who want federal-employment durability with beach access, Virginia Beach is the most defensible Hampton Roads option.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
Virginia Beach's 0.5% rent-to-price ratio is well below the 1% rule. At median prices of $365,000, the $1,790/mo rent produces only $1,224/mo in NOI. Investors here need to target below-median properties or pursue value-add strategies to make the numbers work.
At current rates, a 20% down conventional loan ($73K at 7%) would result in approximately $-718/mo cash flow — negative at median prices. Larger down payments, seller financing, or buying 15–25% below median are strategies to turn the numbers positive.
The 17.0x gross rent multiplier and 4.6% vacancy rate position Virginia Beach as a balanced market. With annual appreciation at 3.2%, total returns (cash flow + equity growth) run approximately 7.2% before financing leverage.
All figures below are computed from Virginia Beach's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
At 0.79% effective rate on the $365,000 median price, the annual tax bill is $2,884 — that's below national average (-25% vs the national average of ~1.06%). Verify the actual assessed value before purchase; sale-triggered reassessments can push the bill higher than the seller's current statement.
If Virginia Beach continues appreciating at 3.2%/yr while rents grow at a conservative 3%/yr, cap rate compresses as price growth outpaces rent. Year-by-year projection at the median:
| Year | Est. Price | Est. Rent/Mo | Cap Rate |
|---|---|---|---|
| Today | $365K | $1,790 | 4.0% |
| Year 1 | $377K | $1,844 | 4.0% |
| Year 2 | $389K | $1,899 | 4.0% |
| Year 3 | $401K | $1,956 | 4.0% |
| Year 4 | $414K | $2,015 | 4.0% |
| Year 5 | $427K | $2,075 | 4.0% |
Same median-priced Virginia Beach property — different capital structures. All-cash maximizes cap rate. Leverage trades cash flow for higher cash-on-cash return when the spread between cap rate and borrowing cost is positive.
| Scenario | Cash Invested | Monthly Cash Flow | Annual CF | Cash-on-Cash |
|---|---|---|---|---|
| All cash | $365K | $1,224 | $14,688 | 4.0% |
| 20% down conventional @ 7% | $84K | $-718 | $-8,613 | -10.3% |
| 25% down DSCR @ 8.5% | $106K | $-881 | $-10,573 | -10.0% |
Properties don't always trade at the median. Lower-priced units typically offer higher cap rates but harder operations; higher-priced properties tend to compress cap rates while attracting better tenants. All-cash assumptions below:
| Tier | Price | Rent/Mo | NOI/Yr | Cap Rate | Monthly CF |
|---|---|---|---|---|---|
| Below median (~75% price) | $274K | $1,522 | $11,244 | 4.1% | $937 |
| At median | $365K | $1,790 | $12,712 | 3.5% | $1,059 |
| Above median (~125% price) | $456K | $2,059 | $14,189 | 3.1% | $1,182 |
Cap rate is just one piece. Real estate returns come from four sources: cash flow, appreciation, principal paydown, and tax benefits. Assuming 20% down conventional financing at 7% and a 5-year hold at Virginia Beach's historical appreciation rate of 3.2%:
On a $73K down payment, that's a 56.3% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Automated checks against the underlying data — surface only the risks that actually apply to Virginia Beach, not generic boilerplate:
Pre-filled with Virginia Beach medians. Adjust to match a specific property.
Factor in financing to see your actual return on invested capital in Virginia Beach.
Virginia Beach, VA has a population of 460,490 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 $365,000 paired with median rents of $1,790/mo produces an estimated cap rate of 4.02%.
Property taxes at 0.79% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 4.6% is impressively low, indicating tight rental supply and strong tenant demand — favorable for landlords.
At a price-to-income ratio of 4.8x, homes cost about 4.8 times the local median income of $76,400. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 3.2% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Virginia Beach presents moderate opportunities. Cap rates near 4.02% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.