Yakima, WA Cap Rate 2.55%
Yakima is the agricultural anchor of Central Washington — producing roughly 75% of US hops, the majority of US apples, and a meaningful share of national pears, cherries, and other tree fruits. The 2.55% cap rate at a $345,000 median price keeps the 0.37% rent-to-price ratio close to functional. Population growth at 1.1%/yr is steady.
Employment is anchored by the broader Yakima Valley agricultural economy (the hops and tree-fruit industry is genuinely structural — Yakima County is one of the highest-grossing US agricultural counties; Anheuser-Busch, Yakima Chief Hops, Roy Farms, and the broader hops/apple/cherry supply chain produce sustained employment), Virginia Mason Memorial / MultiCare and the broader Yakima Valley Memorial healthcare, the broader Yakima County government, Yakima Valley College, the Confederated Tribes and Bands of the Yakama Nation (the Yakama Reservation borders the city — meaningful economic and employment activity), the broader logistics base tied to I-82, and a meaningful food-processing base. The tenant base includes significant Hispanic immigrant community tied to agricultural labor. Submarkets stratify cleanly: the historic Hillcrest area is walkable urban-historic with strong appreciation; the broader West Valley draws professional family rentals; the broader Yakima County extends rural-edge with cheaper basis; central and parts of east Yakima offer deeper-value workforce inventory.
Washington has no state income tax (a structural cash-flow advantage). Yakima County's property tax at 0.93% is moderate. Insurance is reasonable but verify wildfire / wildland-interface exposure (Central Washington has meaningful wildfire seasons — the broader Yakima area has experienced significant fires). Washington landlord-tenant law has shifted toward tenant-protective regulations — operating in WA requires comfort with the regulatory framework. The structural advantages: agricultural employment is genuinely durable; no state income tax; cost basis is materially below the Puget Sound metros; the hops-and-tree-fruit industries have global market exposure that's structurally growing. The structural risks: agricultural water access is the central long-term variable (Yakima Basin water rights and snowpack-runoff have been contested); agricultural labor practices have been ongoing political topics; per-block variance is significant. For investors who want WA tax structure with genuine agricultural-anchor durability and cash-flow math, Yakima is the most defensible Central Washington option.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
Market Data
2026 Market Update: Yakima
Yakima's 0.4% rent-to-price ratio is well below the 1% rule. At median prices of $345,000, the $1,290/mo rent produces only $733/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 ($69K at 7%) would result in approximately $-1,102/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.
Property taxes consume 21% of gross rent here — one of the highest ratios in our dataset. This significantly compresses margins and makes Yakima a market where tax-conscious underwriting is essential. Every deal should be stress-tested with potential assessment increases.
Deal Modeling & Scenarios for Yakima
All figures below are computed from Yakima's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
Property Tax Bill in Real Dollars
At 0.93% effective rate on the $345,000 median price, the annual tax bill is $3,209 — that's near national average (-12% 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.
5-Year Cap Rate Trajectory
If Yakima continues appreciating at 2.8%/yr while rents grow at a conservative 3%/yr, cap rate holds roughly steady as price growth outpaces rent. Year-by-year projection at the median:
| Year | Est. Price | Est. Rent/Mo | Cap Rate |
|---|---|---|---|
| Today | $345K | $1,290 | 2.6% |
| Year 1 | $355K | $1,329 | 2.6% |
| Year 2 | $365K | $1,369 | 2.6% |
| Year 3 | $375K | $1,410 | 2.6% |
| Year 4 | $385K | $1,452 | 2.6% |
| Year 5 | $396K | $1,495 | 2.6% |
Three Financing Scenarios
Same median-priced Yakima 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 | $345K | $733 | $8,799 | 2.6% |
| 20% down conventional @ 7% | $79K | $-1,102 | $-13,225 | -16.7% |
| 25% down DSCR @ 8.5% | $100K | $-1,257 | $-15,078 | -15.1% |
Three Price Tiers: Below, At, and Above the Median
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) | $259K | $1,097 | $7,011 | 2.7% | $584 |
| At median | $345K | $1,290 | $7,703 | 2.2% | $642 |
| Above median (~125% price) | $431K | $1,483 | $8,394 | 1.9% | $700 |
Total Return Over a 5-Year Hold
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 Yakima's historical appreciation rate of 2.8%:
On a $69K down payment, that's a 8.2% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Risk Flags Specific to Yakima
Automated checks against the underlying data — surface only the risks that actually apply to Yakima, not generic boilerplate:
Cap Rate Calculator — Yakima
Pre-filled with Yakima medians. Adjust to match a specific property.
Cash-on-Cash Return — Yakima
Factor in financing to see your actual return on invested capital in Yakima.
Is Yakima a Good Place to Invest in Rental Property?
Yakima, WA has a population of 50,000 and has been growing at 1.1% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $345,000 paired with median rents of $1,290/mo produces an estimated cap rate of 2.55%.
Property taxes at 0.93% fall within the national average range and shouldn't present unusual challenges. 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 5.5x, homes cost about 5.5 times the local median income of $62,750. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 2.8% 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, Yakima 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.