Are you thinking where to invest in a long-term rental property in 2021?
Then you need to know what traditional cap rates by city to expect in 2021.
The reason to look at the capitalization rate is that this is a relatively easy-to-use metric for return on investment which will allow you to compare the investment potential of various locations quickly and comfortably. While the cap rate formula does not include the method of financing of a rental property, it helps beginner and experienced real estate investors find out where they can expect to find the most profitable income properties.
To help you out with your investment property search in 2021, we will show you what rap rates by city the US housing market offers for traditional rentals. But that’s not all. We will also take a look at the median property prices as well as the average rental income and the price to rent ratios in 100 of the best US cities to buy a rental property this year. This comprehensive real estate data, provided by Mashvisor, will let you make a profitable real estate investing decision that is within your budget and that promises a strong demand by tenants.
Interested to learn more about the 2021 price to rent ratio by city in the US? Click here.
Furthermore, we will provide you with city-average capitalization rates for different property types including single-family homes, condos and apartments, townhouses, multi-family real estate, and even foreclosures. As you will see in a bit, property types offer very different return on investment even within the same housing market. So, you need this data to know where to focus your traditional rental property search in 2021, depending on your budget and your preferred property type.
So, now let’s take a look at the traditional cap rates by city in 2021:
2021 Cap Rates by City: Where to Invest in Long-Term Rentals
We’ve organized the data provided by Mashvisor’s real estate investment software into tables to make it easier to go through and analyze. We will start with the 100 real estate markets which promise to generate the highest return for traditional rental properties in 2021:
Table 1: Traditional Cap Rates by City in 2021, All Property Types
| City and State | Traditional Cap Rate | Traditional Rental Income | Median Property Price | Price to Rent Ratio | |
| #1 | Baltimore, MD | 4.16% | $1,669 | $306,956 | 15 |
| #2 | Detroit, MI | 4.12% | $990 | $180,999 | 15 |
| #3 | Buffalo, BY | 3.90% | $1,043 | $200,985 | 16 |
| #4 | Aurora, IL | 3.84% | $1,555 | $222,397 | 12 |
| #5 | Akron, OH | 3.82% | $828 | $150,381 | 15 |
| #6 | Fayetteville, NC | 3.76% | $1,163 | $223,337 | 16 |
| #7 | Alexandria, VA | 3.71% | $2,308 | $561,708 | 20 |
| #8 | Clearwater, FL | 3.71% | $1,769 | $407,414 | 19 |
| #9 | Augusta, GA | 3.64% | $1,007 | $235,193 | 19 |
| #10 | Cleveland, OH | 3.59% | $975 | $180,499 | 15 |
| #11 | Abilene, TX | 3.53% | $1,386 | $263,319 | 16 |
| #12 | Baton Rouge, LA | 3.50% | $1,324 | $313,935 | 20 |
| #13 | Indianapolis, IN | 3.46% | $1,127 | $263,239 | 19 |
| #14 | Fort Wayne, IN | 3.46% | $1,192 | $262,809 | 18 |
| #15 | Birmingham, AL | 3.45% | $1,324 | $306,786 | 19 |
| #16 | Milwaukee, WI | 3.43% | $1,059 | $201,431 | 16 |
| #17 | Bradenton, Fl | 3.36% | $1,794 | $431,811 | 20 |
| #18 | Philadelphia, PA | 3.33% | $1,484 | $374,508 | 21 |
| #19 | Honolulu, HI | 3.29% | $2,295 | $852,913 | 31 |
| #20 | Louisville, KY | 3.18% | $1,146 | $262,674 | 19 |
| #21 | Jacksonville, FL | 3.17% | $1,272 | $282,320 | 19 |
| #22 | Orlando, FL | 3.14% | $1,567 | $328,143 | 17 |
| #23 | Pensacola, FL | 3.13% | $1,768 | $522,086 | 25 |
| #24 | Chattanooga, TN | 3.12% | $1,420 | $331,394 | 19 |
| #25 | Chandler, AZ | 3.07% | $1,955 | $466,065 | 20 |
| #26 | Irving, TX | 3.02% | $2,009 | $394,853 | 16 |
| #27 | West Palm Beach, FL | 2.98% | $1,675 | $316,434 | 16 |
| #28 | Mesa, AZ | 2.95% | $1,513 | $370,582 | 20 |
| #29 | Scottsdale, AZ | 2.90% | $3,275 | $1,034,251 | 26 |
| #30 | Columbus, OH | 2.90% | $1,204 | $272,796 | 19 |
| #31 | New Orleans, LA | 2.90% | $1,839 | $477,508 | 22 |
| #32 | Memphis, TN | 2.90% | $1,093 | $287,493 | 22 |
| #33 | Arlington, TX | 2.90% | $1,617 | $318,823 | 16 |
| #34 | Bakersfield, CA | 2.86% | $1,580 | $380,973 | 20 |
| #35 | St. Louis, MO | 2.84% | $1,108 | $265,800 | 20 |
| #36 | College Station, TX | 2.81% | $1,453 | $314,460 | 18 |
| #37 | Virginia Beach, VA | 2.80% | $1,592 | $412,793 | 22 |
| #38 | Gilbert, AZ | 2.80% | $2,047 | $498,470 | 20 |
| #39 | Albany, NY | 2.80% | $1,525 | $284,720 | 16 |
| #40 | Sarasota, FL | 2.78% | $2,313 | $730,322 | 26 |
| #41 | Atlanta, GA | 2.77% | $2,067 | $480,409 | 19 |
| #42 | Pittsburgh, PA | 2.75% | $1,336 | $342,900 | 21 |
| #43 | Colorado Springs, CO | 2.75% | $1,607 | $472,277 | 25 |
| #44 | Richmond, VA | 2.73% | $1,433 | $369,318 | 21 |
| #45 | Nashville, TN | 2.72% | $1,676 | $482,565 | 24 |
| #46 | Hollywood, FL | 2.72% | $2,332 | $477,599 | 17 |
| #47 | Fort Worth, TX | 2.71% | $1,642 | $339,589 | 17 |
| #48 | Tampa, FL | 2.69% | $1,766 | $488,753 | 23 |
| #49 | Tulsa, OK | 2.69% | $1,220 | $407,275 | 28 |
| #50 | Lubbock, TX | 2.67% | $1,313 | $294,471 | 19 |
| #51 | Houston, TX | 2.66% | $1,814 | $407,186 | 19 |
| #52 | Cincinnati, OH | 2.65% | $1,373 | $354,217 | 22 |
| #53 | Anaheim, CA | 2.63% | $3,252 | $736,566 | 19 |
| #54 | Little Rock, AR | 2.62% | $1,192 | $323,694 | 23 |
| #55 | Tallahassee, FL | 2.61% | $1,219 | $286,591 | 20 |
| #56 | Durham, NC | 2.61% | $1,467 | $407,094 | 23 |
| #57 | Albuquerque, NM | 2.58% | $1,357 | $356,498 | 22 |
| #58 | Rochester, NY | 2.57% | $1,082 | $187,580 | 14 |
| #59 | Grand Rapids, MI | 2.54% | $1,162 | $308,548 | 22 |
| #60 | Washington, DC | 2.53% | $2,355 | $692,610 | 25 |
| #61 | Corpus Christi, TX | 2.49% | $1,380 | $301,121 | 18 |
| #62 | Las Vegas, NV | 2.48% | $1,355 | $468,337 | 29 |
| #63 | Bloomington, IN | 2.48% | $1,362 | $387,652 | 24 |
| #64 | Tucson, AZ | 2.44% | $1,166 | $320,662 | 23 |
| #65 | Arlington, VA | 2.44% | $2,324 | $659,360 | 24 |
| #66 | Henderson, NV | 2.43% | $1,619 | $600,245 | 31 |
| #67 | Pompano Beach, FL | 2.43% | $1,906 | $396,327 | 17 |
| #68 | Minneapolis, MN | 2.42% | $1,776 | $369,517 | 17 |
| #69 | Lexington, KY | 2.41% | $1,219 | $339,352 | 23 |
| #70 | Boca Raton, FL | 2.40% | $2,234 | $691,195 | 26 |
| #71 | El Paso, TX | 2.39% | $1,215 | $248,999 | 17 |
| #72 | Kansas City, MO | 2.38% | $1,231 | $313,759 | 21 |
| #73 | San Antonio, TX | 2.37% | $1,452 | $288,008 | 17 |
| #74 | Raleigh, NC | 2.37% | $1,572 | $503,692 | 27 |
| #75 | Fort Myers, FL | 2.32% | $1,477 | $334,426 | 19 |
| #76 | Fort Collins, CO | 2.30% | $1,940 | $540,757 | 23 |
| #77 | Charlotte, NC | 2.29% | $1,715 | $474,769 | 23 |
| #78 | Phoenix, AZ | 2.26% | $1,528 | $465,610 | 25 |
| #79 | Miami, FL | 2.25% | $2,605 | $618,444 | 20 |
| #80 | Dallas, TX | 2.02% | $1,854 | $465,534 | 21 |
| #81 | Long Beach, CA | 1.96% | $3,285 | $872,688 | 22 |
| #82 | Madison, WI | 1.95% | $1,466 | $415,308 | 24 |
| #83 | San Diego, CA | 1.91% | $2,635 | $843,901 | 27 |
| #84 | Fort Lauderdale, FL | 1.91% | $2,650 | $692,340 | 22 |
| #85 | Los Angeles, CA | 1.90% | $3,631 | $1,144,675 | 26 |
| #86 | Knoxville, TN | 1.89% | $1,055 | $361,306 | 29 |
| #87 | Spokane, WA | 1.76% | $1,150 | $360,374 | 26 |
| #88 | Fresno, CA | 1.74% | $1,122 | $348,134 | 26 |
| #89 | Jersey City, NJ | 1.59% | $2,188 | $669,657 | 26 |
| #90 | Chicago, IL | 1.58% | $2,019 | $471,896 | 19 |
| #91 | Naples, FL | 1.57% | $1,988 | $654,422 | 27 |
| #92 | Portland, OR | 1.57% | $2,039 | $632,097 | 26 |
| #93 | Pasadena, CA | 1.53% | $3,582 | $1,195,497 | 28 |
| #94 | Reno, NV | 1.52% | $1,490 | $581,879 | 33 |
| #95 | San Francisco, CA | 1.40% | $4,288 | $1,478,164 | 29 |
| #96 | Austin, TX | 1.38% | $1,912 | $677,893 | 30 |
| #97 | Irvine, CA | 1.38% | $3,324 | $1,070,825 | 27 |
| #98 | San Jose, CA | 1.28% | $2,864 | $981,729 | 29 |
| #99 | Miami Beach, FL | 1.22% | $2,712 | $897,182 | 28 |
| #100 | New York, NY | 1.06% | $2,754 | $1,159,516 | 35 |
Traditional Rentals Capitalization Rate Data: Summary
According to Mashvisor’s nationwide real estate market analysis, in 2021 the 100 most profitable cities for investing in long-term rental properties are expected to provide return on investment ranging from 1.06% in the New York real estate market to 4.16% in the Baltimore real estate market. This means that first-time real investors looking for lucrative deals should consider Baltimore as a possible location for their traditional rental property.
This city has another important advantage which makes it ideal for those just getting started. Namely, property prices there are significantly more affordable than in other cities. However, when exploring the Baltimore housing market 2021 for investment opportunities, you should keep in mind that the price to rent ratio by city there is relatively low. While this is one of the factors which push the capitalization rate up, it also signals that rental demand will be weak. You will need to put in extra marketing efforts to get your property rented out. But once you manage to get good tenants for your traditional rental property, the return on investment will make your efforts worth it.
In case you’d like to compare the 2021 cap rates by city with the 2020 value, click here.
Now that we know what 2021 cap rates by city to expect across all real estate listings in the US housing market, it’s time to take a look at how the rate of return on a rental property will vary by property type.
We’ll start with single-family homes. Generally speaking, this is the most popular property type in the majority of US cities in addition to being a good first investment property.
Table 2: Traditional Cap Rates by City in 2021, Single-Family Homes
| City and State | Traditional Cap Rate | Traditional Rental Income | Median Property Price | Price to Rent Ratio | |
| #1 | Detroit, MI | $891 | 4.94% | $148,373 | 14 |
| #2 | Portsmouth, VA | $1,373 | 4.82% | $209,849 | 13 |
| #3 | Cleveland, OH | $905 | 4.51% | $145,957 | 13 |
| #4 | Garland, TX | $1,479 | 3.96% | $282,659 | 16 |
| #5 | Norfolk, VA | $1,464 | 3.92% | $285,207 | 16 |
| #6 | Akron, OH | $818 | 3.92% | $150,006 | 15 |
| #7 | Baltimore, MD | $1,608 | 3.87% | $305,146 | 16 |
| #8 | Fayetteville, NC | $1,179 | 3.81% | $226,535 | 16 |
| #9 | Milwaukee, WI | $1,067 | 3.67% | $193,314 | 15 |
| #10 | Augusta, GA | $1,012 | 3.64% | $235,345 | 19 |
| #11 | Abilene, TX | $1,400 | 3.56% | $262,288 | 16 |
| #12 | Fort Wayne, IN | $1,216 | 3.56% | $265,161 | 18 |
| #13 | Hampton, VA | $1,190 | 3.54% | $241,613 | 17 |
| #14 | Indianapolis, IN | $1,141 | 3.52% | $258,230 | 19 |
| #15 | Birmingham, AL | $1,343 | 3.50% | $312,567 | 19 |
| #16 | Chesapeake, VA | $1,730 | 3.48% | $349,900 | 17 |
| #17 | Carrollton, TX | $1,888 | 3.47% | $344,370 | 15 |
| #18 | New Orleans, LA | $1,890 | 3.45% | $456,497 | 20 |
| #19 | Columbus, GA | $1,026 | 3.43% | $242,151 | 20 |
| #20 | Miami, FL | $2,676 | 3.41% | $637,889 | 20 |
| #21 | Wichita, KS | $1,087 | 3.36% | $254,050 | 19 |
| #22 | Minneapolis, MN | $1,719 | 3.35% | $354,211 | 17 |
| #23 | Pensacola, FL | $1,621 | 3.33% | $442,674 | 23 |
| #24 | Columbia, SC | $1,293 | 3.32% | $330,863 | 21 |
| #25 | Louisville, KY | $1,151 | 3.30% | $262,573 | 19 |
| #26 | West Palm Beach, FL | $2,105 | 3.26% | $439,390 | 17 |
| #27 | Atlanta, GA | $2,053 | 3.23% | $496,030 | 20 |
| #28 | Jacksonville, FL | $1,269 | 3.21% | $290,171 | 19 |
| #29 | Columbus, OH | $1,186 | 3.21% | $266,860 | 19 |
| #30 | Philadelphia, PA | $1,491 | 3.19% | $333,722 | 19 |
| #31 | Chicago, IL | $1,743 | 3.13% | $411,395 | 20 |
| #32 | Decatur, GA | $1,619 | 3.13% | $350,666 | 18 |
| #33 | Arlington, TX | $1,693 | 3.12% | $331,752 | 16 |
| #34 | Irving, TX | $2,054 | 3.11% | $427,392 | 17 |
| #35 | Lake Worth, FL | $1,994 | 3.10% | $391,331 | 16 |
| #36 | St. Louis, MO | $1,135 | 3.07% | $277,050 | 20 |
| #37 | Gainesville, FL | $1,533 | 3.06% | $344,659 | 19 |
| #38 | Corpus Christi, TX | $1,449 | 3.05% | $321,951 | 19 |
| #39 | Hollywood, FL | $2,163 | 3.02% | $490,518 | 19 |
| #40 | Grand Rapids, MI | $1,187 | 2.96% | $275,422 | 19 |
| #41 | Orlando, FL | $1,727 | 2.92% | $424,261 | 20 |
| #42 | Richardson, TX | $2,009 | 2.92% | $423,005 | 18 |
| #43 | Bloomington, IN | $1,435 | 2.91% | $365,274 | 21 |
| #44 | Chandler, AZ | $2,004 | 2.87% | $513,881 | 21 |
| #45 | Nashville, TN | $1,713 | 2.84% | $477,156 | 23 |
| #46 | Richmond, VA | $1,439 | 2.84% | $367,257 | 21 |
| #47 | Fort Worth, TX | $1,626 | 2.83% | $329,698 | 17 |
| #48 | Rochester, BY | $1,155 | 2.81% | $195,948 | 14 |
| #49 | Bakersfield, CA | $1,441 | 2.80% | $382,406 | 22 |
| #50 | Bryan, TX | $1,391 | 2.80% | $308,931 | 19 |
| #51 | Tampa, FL | $1,714 | 2.79% | $469,803 | 23 |
| #52 | Bradenton, FL | $2,127 | 2.79% | $598,838 | 23 |
| #53 | Memphis, TN | $1,070 | 2.77% | $291,388 | 23 |
| #54 | Gilbert, AZ | $2,075 | 2.77% | $512,192 | 21 |
| #55 | Greenville, SC | $1,354 | 2.77% | $376,419 | 23 |
| #56 | Durham, NC | $1,529 | 2.75% | $409,593 | 22 |
| #57 | Lubbock, TX | $1,356 | 2.74% | $303,650 | 19 |
| #58 | Colorado Springs, CO | $1,677 | 2.71% | $491,024 | 24 |
| #59 | Virginia Beach, VA | $1,602 | 2.69% | $420,409 | 22 |
| #60 | Anaheim, CA | $2,881 | 2.68% | $700,544 | 20 |
| #61 | Boca Raton, FL | $2,859 | 2.66% | $780,535 | 23 |
| #62 | Mesa, AZ | $1,644 | 2.65% | $430,697 | 22 |
| #63 | Sarasota, FL | $2,259 | 2.65% | $814,095 | 30 |
| #64 | Charleston, SC | $1,997 | 2.64% | $684,250 | 29 |
| #65 | Little Rock, AR | $1,222 | 2.61% | $333,575 | 23 |
| #66 | San Antonio, TX | $1,472 | 2.60% | $291,105 | 16 |
| #67 | Lexington, KY | $1,254 | 2.60% | $339,772 | 23 |
| #68 | Cincinnati, OH | $1,416 | 2.60% | $384,722 | 23 |
| #69 | Tulsa, OK | $1,244 | 2.60% | $433,481 | 29 |
| #70 | Fort Lauderdale, FL | $2,852 | 2.59% | $861,852 | 25 |
| #71 | Tallahassee, FL | $1,310 | 2.58% | $319,268 | 20 |
| #72 | Albuquerque, NM | $1,390 | 2.58% | $366,970 | 22 |
| #73 | Houston, TX | $1,833 | 2.49% | $421,473 | 19 |
| #74 | Fort Myers, FL | $1,597 | 2.48% | $423,367 | 22 |
| #75 | Dallas, TX | $1,983 | 2.47% | $519,132 | 22 |
| #76 | Phoenix, AZ | $1,635 | 2.43% | $507,572 | 26 |
| #77 | Scottsdale, AZ | $3,777 | 2.43% | $1,334,751 | 29 |
| #78 | Riverside, CA | $2,059 | 2.42% | $542,707 | 22 |
| #79 | Charlotte, NC | $1,741 | 2.38% | $474,017 | 23 |
| #80 | Charlottesville, VA | $2,047 | 2.35% | $578,479 | 24 |
| #81 | College Station, TX | $1,572 | 2.33% | $373,872 | 20 |
| #82 | Tucson, AZ | $1,202 | 2.30% | $343,730 | 24 |
| #83 | Denton, TX | $1,560 | 2.29% | $364,680 | 19 |
| #84 | Washington, DC | $2,525 | 2.28% | $693,343 | 23 |
| #85 | Raleigh, NC | $1,674 | 2.24% | $561,697 | 28 |
| #86 | Portland, OR | $2,211 | 2.05% | $647,146 | 24 |
| #87 | Las Vegas, NV | $1,413 | 2.04% | $502,640 | 30 |
| #88 | Henderson, NV | $1,699 | 2.02% | $688,114 | 34 |
| #89 | San Diego, CA | $2,608 | 2.00% | $838,965 | 27 |
| #90 | Madison, WI | $1,652 | 1.97% | $441,460 | 22 |
| #91 | Los Angeles, CA | $3,787 | 1.91% | $1,280,050 | 28 |
| #92 | Torrance, CA | $3,250 | 1.88% | $1,005,782 | 26 |
| #93 | Naples, FL | $2,133 | 1.83% | $861,141 | 34 |
| #94 | Spokane, WA | $1,159 | 1.80% | $356,947 | 26 |
| #95 | Long Beach, CA | $2,877 | 1.72% | $928,882 | 27 |
| #96 | Fresno, CA | $1,112 | 1.63% | $361,112 | 27 |
| #97 | Pasadena, CA | $3,732 | 1.54% | $1,416,826 | 32 |
| #98 | New York, NY | $2,499 | 1.37% | $947,448 | 32 |
| #99 | Austin, TX | $1,987 | 1.26% | $766,455 | 32 |
| #100 | Irvine, CA | $3,767 | 1.04% | $1,454,387 | 32 |
Next, we’ll look at condo and apartment cap rates by city in 2021:
Table 3: Traditional Cap Rates by City in 2021, Condos and Apartments
| City and State | Traditional Cap Rate | Traditional Rental Income | Median Property Price | Price to Rent Ratio | |
| #1 | Lake Worth, FL | 5.35% | $1,352 | $141,600 | 9 |
| #2 | Jupiter, FL | 5.29% | $3,293 | $446,865 | 11 |
| #3 | Houston, TX | 4.73% | $1,346 | $192,840 | 12 |
| #4 | Henderson, NV | 4.62% | $1,319 | $227,709 | 14 |
| #5 | Bradenton, FL | 4.46% | $1,424 | $224,232 | 13 |
| #6 | Baton Rouge, LA | 4.37% | $1,046 | $163,665 | 13 |
| #7 | Alexandria, VA | 4.35% | $1,984 | $460,595 | 19 |
| #8 | Plantation, FL | 4.34% | $1,417 | $163,901 | 10 |
| #9 | Clearwater, FL | 4.21% | $1,718 | $353,195 | 17 |
| #10 | College Station, TX | 4.04% | $1,105 | $152,638 | 12 |
| #11 | Tulsa, OK | 3.92% | $902 | $202,659 | 19 |
| #12 | Memphis, TN | 3.85% | $1,218 | $253,922 | 17 |
| #13 | Scottsdale, AZ | 3.64% | $2,341 | $503,686 | 18 |
| #14 | Orlando, FL | 3.64% | $1,369 | $211,917 | 13 |
| #15 | Tucson, AZ | 3.57% | $1,003 | $197,435 | 16 |
| #16 | Honolulu, HI | 3.56% | $2,148 | $717,308 | 28 |
| #17 | Gainesville, FL | 3.51% | $946 | $171,671 | 15 |
| #18 | Aurora, CO | 3.50% | $1,411 | $247,200 | 15 |
| #19 | Fayetteville, NC | 3.36% | $982 | $155,750 | 13 |
| #20 | Seattle, WA | 3.18% | $2,224 | $522,336 | 20 |
| #21 | Punta Gorda, FL | 3.16% | $1,866 | $356,322 | 16 |
| #22 | Indianapolis, IN | 3.12% | $1,143 | $323,955 | 24 |
| #23 | Colorado Springs, CO | 3.10% | $1,092 | $468,730 | 36 |
| #24 | Birmingham, AL | 3.10% | $1,344 | $308,539 | 19 |
| #25 | Las Vegas, NV | 3.00% | $1,306 | $464,357 | 30 |
| #26 | Baltimore, MD | 2.95% | $1,947 | $457,815 | 20 |
| #27 | Denver, CO | 2.94% | $1,658 | $353,450 | 18 |
| #28 | Washington, DC | 2.80% | $2,180 | $587,519 | 22 |
| #29 | West Palm Beach, FL | 2.79% | $1,528 | $222,727 | 12 |
| #30 | Jacksonville, FL | 2.78% | $1,261 | $267,118 | 18 |
| #31 | Hollywood, FL | 2.69% | $2,367 | $465,750 | 16 |
| #32 | Charleston, SC | 2.69% | $1,722 | $586,880 | 28 |
| #33 | Tampa, FL | 2.67% | $1,992 | $605,021 | 25 |
| #34 | Louisville, KY | 2.66% | $1,084 | $244,399 | 19 |
| #35 | Nashville, TN | 2.62% | $1,405 | $471,240 | 28 |
| #36 | Arlington, VA | 2.59% | $2,034 | $570,701 | 23 |
| #37 | Arlington, TX | 2.56% | $935 | $132,069 | 12 |
| #38 | Mesa, AZ | 2.51% | $1,054 | $199,607 | 16 |
| #39 | Irving, TX | 2.48% | $1,663 | $256,653 | 13 |
| #40 | Boca Raton, FL | 2.47% | $1,796 | $491,287 | 23 |
| #41 | Sarasota, FL | 2.47% | $2,314 | $767,986 | 28 |
| #42 | Philadelphia, PA | 2.42% | $1,602 | $505,466 | 26 |
| #43 | Atlanta, GA | 2.42% | $1,973 | $440,050 | 19 |
| #44 | Pompano Beach, FL | 2.40% | $1,792 | $325,755 | 15 |
| #45 | Fort Wayne, IN | 2.36% | $1,076 | $246,769 | 19 |
| #46 | Riverside, CA | 2.32% | $1,662 | $331,374 | 17 |
| #47 | Fresno, CA | 2.31% | $809 | $201,108 | 21 |
| #48 | Richmond, VA | 2.29% | $1,358 | $368,920 | 23 |
| #49 | Raleigh, NC | 2.27% | $1,392 | $385,522 | 23 |
| #50 | Anaheim, CA | 2.20% | $2,133 | $456,510 | 18 |
| #51 | Torrance, CA | 2.10% | $2,290 | $495,556 | 18 |
| #52 | Boulder, CO | 2.04% | $1,894 | $523,587 | 23 |
| #53 | Tallahassee, FL | 2.03% | $931 | $194,070 | 17 |
| #54 | Tempe, AZ | 1.98% | $1,335 | $301,280 | 19 |
| #55 | Evanston, IL | 1.98% | $1,778 | $296,839 | 14 |
| #56 | Durham, NC | 1.96% | $1,113 | $370,319 | 28 |
| #57 | Madison, WI | 1.95% | $1,169 | $349,915 | 25 |
| #58 | Columbus, OH | 1.92% | $1,265 | $270,501 | 18 |
| #59 | Miami, FL | 1.90% | $2,625 | $613,982 | 19 |
| #60 | Fort Myers, FL | 1.89% | $1,344 | $244,993 | 15 |
| #61 | Stamford, CT | 1.88% | $2,081 | $407,599 | 16 |
| #62 | Glendale, CA | 1.88% | $2,444 | $640,972 | 22 |
| #63 | Cleveland, OH | 1.81% | $1,532 | $335,879 | 18 |
| #64 | Jersey City, NJ | 1.80% | $2,236 | $609,423 | 23 |
| #65 | Austin, TX | 1.76% | $1,720 | $441,330 | 21 |
| #66 | Los Angeles, CA | 1.73% | $2,889 | $838,119 | 24 |
| #67 | Fort Lauderdale, FL | 1.65% | $2,527 | $616,354 | 20 |
| #68 | Chattanooga, TN | 1.60% | $1,299 | $341,655 | 22 |
| #69 | Irvine, CA | 1.53% | $3,049 | $847,136 | 23 |
| #70 | San Francisco, CA | 1.49% | $3,970 | $1,239,293 | 26 |
| #71 | St. Louis, MO | 1.49% | $1,087 | $232,127 | 18 |
| #72 | San Diego, CA | 1.48% | $2,432 | $804,033 | 28 |
| #73 | Bloomington, IN | 1.43% | $1,181 | $422,884 | 30 |
| #74 | Portland, OR | 1.43% | $1,923 | $482,233 | 21 |
| #75 | Long Beach, CA | 1.42% | $1,963 | $534,679 | 23 |
| #76 | Oakland, CA | 1.40% | $2,422 | $661,197 | 23 |
| #77 | Providence, RI | 1.40% | $1,738 | $344,512 | 17 |
| #78 | Tuscaloosa, AL | 1.39% | $794 | $333,514 | 35 |
| #79 | Dallas, TX | 1.38% | $1,554 | $345,211 | 19 |
| #80 | Phoenix, AZ | 1.38% | $1,224 | $361,481 | 25 |
| #81 | Pensacola, FL | 1.38% | $2,611 | $1,014,816 | 32 |
| #82 | Pasadena, CA | 1.31% | $2,767 | $909,432 | 27 |
| #83 | Grand Rapids, MI | 1.30% | $1,040 | $380,740 | 31 |
| #84 | Charlotte, NC | 1.25% | $1,595 | $511,671 | 27 |
| #85 | Minneapolis, MN | 1.25% | $1,882 | $374,596 | 17 |
| #86 | Dearborn, MI | 1.25% | $1,095 | $173,737 | 13 |
| #87 | Miami Beach, FL | 1.19% | $2,520 | $822,869 | 27 |
| #88 | Chicago, IL | 1.18% | $2,057 | $472,130 | 19 |
| #89 | San Jose, CA | 1.16% | $2,447 | $701,859 | 24 |
| #90 | Naples, FL | 1.13% | $1,893 | $540,288 | 24 |
| #91 | Lexington, KY | 1.13% | $1,017 | $372,269 | 30 |
| #92 | Greenville, SC | 1.11% | $1,442 | $588,986 | 34 |
| #93 | Boston, MA | 1.07% | $2,459 | $884,452 | 30 |
| #94 | Knoxville, TN | 1.05% | $1,197 | $407,144 | 28 |
| #95 | Cincinnati, OH | 1.01% | $1,126 | $237,517 | 18 |
| #96 | Reno, NV | 1.01% | $1,047 | $280,731 | 22 |
| #97 | Fort Worth, TX | 1% | $1,689 | $363,662 | 18 |
| #98 | New York, NY | 0.97% | $2,940 | $1,231,468 | 35 |
| #99 | Detroit, MI | 0.76% | $1,384 | $278,551 | 17 |
| #100 | Corpus Christi, TX | 0.51% | $1,022 | $179,568 | 15 |
Third on our list is return on investment for traditional rental properties when it comes to townhouses:
Table 4: Traditional Cap Rates by City in 2021, Townhouses
| City and State | Traditional Cap Rate | Traditional Rental Income | Median Property Price | Price to Rent Ratio | |
| #1 | Houston, TX | 4.73% | $1,346 | $192,840 | 12 |
| #2 | Greenville, NC | 4.73% | $1,260 | $171,553 | 11 |
| #3 | Baltimore, MD | 4.71% | $1,613 | $258,024 | 13 |
| #4 | Alexandria, WA | 4.35% | $1,984 | $460,595 | 19 |
| #5 | Lake Worth, FL | 4.18% | $1,685 | $234,690 | 12 |
| #6 | Falls Church, VA | 4.13% | $1,746 | $303,882 | 15 |
| #7 | Sandy Springs, GA | 4.10% | $1,750 | $258,947 | 12 |
| #8 | College Station, TX | 4.04% | $1,105 | $152,638 | 12 |
| #9 | Baton Rouge, LA | 3.98% | $1,143 | $202,319 | 15 |
| #10 | Miami, FL | 3.97% | $2,576 | $448,003 | 14 |
| #11 | Birmingham, AL | 3.90% | $1,327 | $291,552 | 18 |
| #12 | Gainesville, FL | 3.75% | $1,068 | $187,031 | 15 |
| #13 | Philadelphia, PA | 3.71% | $1,456 | $331,702 | 19 |
| #14 | Jupiter, FL | 3.70% | $3,026 | $518,476 | 14 |
| #15 | Scottsdale, AZ | 3.69% | $2,631 | $625,385 | 20 |
| #16 | Bryan, TX | 3.69% | $1,175 | $216,975 | 15 |
| #17 | Frederick, MD | 3.60% | $2,113 | $372,485 | 15 |
| #18 | Naples, FL | 3.59% | $1,951 | $349,033 | 15 |
| #19 | Clearwater, FL | 3.48% | $1,960 | $336,174 | 14 |
| #20 | Las Vegas, NV | 3.43% | $1,160 | $262,441 | 19 |
| #21 | Tallahassee, FL | 3.43% | $939 | $175,137 | 16 |
| #22 | Chandler, AZ | 3.42% | $1,773 | $331,131 | 16 |
| #23 | Brookhaven, GA | 3.41% | $1,858 | $282,867 | 13 |
| #24 | Shreveport, LA | 3.38% | $950 | $161,398 | 14 |
| #25 | Jacksonville, FL | 3.35% | $1,230 | $213,818 | 14 |
| #26 | Fort Myers, FL | 3.35% | $1,380 | $214,097 | 13 |
| #27 | Nashville, TN | 3.30% | $1,536 | $360,246 | 20 |
| #28 | Raleigh, NC | 3.28% | $1,413 | $373,544 | 22 |
| #29 | Smyrna, GA | 3.26% | $1,560 | $293,948 | 16 |
| #30 | Hollywood, FL | 3.24% | $3,145 | $546,355 | 14 |
| #31 | Henderson, NV | 3.20% | $1,403 | $375,043 | 22 |
| #32 | Sarasota, FL | 3.16% | $2,572 | $573,955 | 19 |
| #33 | Silver Spring, MD | 3.16% | $2,095 | $425,561 | 17 |
| #34 | Laurel, MD | 3.12% | $1,968 | $388,495 | 16 |
| #35 | San Bernardino, CA | 3.06% | $1,234 | $177,400 | 12 |
| #36 | Prescott, AZ | 3.06% | $1,576 | $320,908 | 17 |
| #37 | Mesa, AZ | 2.96% | $1,379 | $257,597 | 16 |
| #38 | Gilbert, AZ | 2.96% | $1,618 | $320,561 | 17 |
| #39 | Aurora, IL | 2.80% | $1,495 | $235,829 | 13 |
| #40 | Stuart, FL | 2.77% | $1,635 | $561,975 | 29 |
| #41 | Orlando, FL | 2.76% | $1,668 | $310,443 | 16 |
| #42 | Norfolk, VA | 2.72% | $1,205 | $364,247 | 25 |
| #43 | Tucson, AZ | 2.71% | $991 | $245,110 | 21 |
| #44 | Colorado Springs, CO | 2.65% | $1,423 | $383,513 | 22 |
| #45 | Tempe, AZ | 2.65% | $1,418 | $289,485 | 17 |
| #46 | Oxnard, CA | 2.63% | $2,891 | $573,071 | 17 |
| #47 | Sacramento, CA | 2.60% | $1,401 | $374,355 | 22 |
| #48 | Arlington, VA | 2.59% | $2,034 | $570,701 | 23 |
| #49 | Arlington, TX | 2.56% | $935 | $132,069 | 12 |
| #50 | Madison, WI | 2.52% | $1,185 | $271,450 | 19 |
| #51 | Irving, TX | 2.48% | $1,663 | $256,653 | 13 |
| #52 | Boca Raton, FL | 2.47% | $2,596 | $616,304 | 20 |
| #53 | Phoenix, AZ | 2.43% | $1,391 | $353,090 | 21 |
| #54 | Carrollton, TX | 2.43% | $1,361 | $222,654 | 14 |
| #55 | Atlanta, GA | 2.42% | $1,973 | $440,050 | 19 |
| #56 | West Palm Beach, FL | 2.41% | $1,580 | $260,833 | 14 |
| #57 | Tampa, FL | 2.37% | $1,925 | $442,938 | 19 |
| #58 | Fort Collins, CO | 2.33% | $1,725 | $418,438 | 20 |
| #59 | Riverside, CA | 2.32% | $1,662 | $331,374 | 17 |
| #60 | Fresno, CA | 2.31% | $809 | $201,108 | 21 |
| #61 | Ventura, CA | 2.30% | $2,213 | $452,275 | 17 |
| #62 | Richmond, VA | 2.29% | $1,358 | $368,920 | 23 |
| #63 | Fort Lauderdale, FL | 2.22% | $2,902 | $733,377 | 21 |
| #64 | Durham, NC | 2.20% | $1,382 | $430,264 | 26 |
| #65 | Anaheim, CA | 2.20% | $2,133 | $456,510 | 18 |
| #66 | Plantation, FL | 2.15% | $1,710 | $307,539 | 15 |
| #67 | Washington, DC | 2.14% | $3,049 | $955,190 | 26 |
| #68 | Torrance, CA | 2.10% | $2,290 | $495,556 | 18 |
| #69 | Chula Vista, CA | 2.06% | $1,864 | $411,791 | 18 |
| #70 | Fremont, CA | 2.00% | $2,508 | $595,136 | 20 |
| #71 | Rockville, MD | 2% | $2,671 | $737,589 | 23 |
| #72 | Seattle, WA | 1.96% | $2,314 | $594,955 | 21 |
| #73 | Glendale, CA | 1.88% | $2,444 | $640,972 | 22 |
| #74 | Reno, NV | 1.79% | $1,226 | $360,537 | 25 |
| #75 | Austin, TX | 1.76% | $1,720 | $441,330 | 21 |
| #76 | Charlottesville, VA | 1.76% | $1,315 | $425,609 | 27 |
| #77 | Los Angeles, CA | 1.73% | $2,889 | $838,119 | 24 |
| #78 | Decatur, GA | 1.70% | $1,359 | $205,097 | 13 |
| #79 | New York, NY | 1.63% | $2,276 | $752,555 | 28 |
| #80 | Lewisville, TX | 1.62% | $1,737 | $339,993 | 16 |
| #81 | Chicago, IL | 1.61% | $2,482 | $616,455 | 21 |
| #82 | Chattanooga, TN | 1.58% | $1,350 | $432,753 | 27 |
| #83 | Minneapolis, MN | 1.56% | $1,770 | $418,000 | 20 |
| #84 | Irvine, CA | 1.53% | $3,049 | $847,136 | 23 |
| #85 | San Francisco, CA | 1.49% | $3,970 | $1,239,293 | 26 |
| #86 | Portland, OR | 1.49% | $2,002 | $599,037 | 25 |
| #87 | San Diego, CA | 1.48% | $2,432 | $804,033 | 28 |
| #88 | Pompano Beach, FL | 1.43% | $2,177 | $480,464 | 18 |
| #89 | Long Beach, CA | 1.42% | $1,963 | $534,679 | 23 |
| #90 | Oakland, CA | 1.40% | $2,422 | $661,197 | 23 |
| #91 | Dallas, TX | 1.38% | $1,554 | $345,211 | 19 |
| #92 | Pasadena, CA | 1.31% | $2,767 | $909,432 | 27 |
| #93 | Albany, NY | 1.20% | $1,242 | $277,679 | 19 |
| #94 | Lincoln, NE | 1.17% | $1,159 | $356,495 | 26 |
| #95 | San Jose, CA | 1.16% | $2,447 | $701,859 | 24 |
| #96 | Wilmington, NC | 1.09% | $1,037 | $279,950 | 23 |
| #97 | Fort Worth, TX | 1% | $1,689 | $363,662 | 18 |
| #98 | Bend, OR | 0.74% | $1,737 | $619,575 | 30 |
| #99 | San Mateo, CA | 0.60% | $3,138 | $975,974 | 26 |
| #100 | Boise, ID | 0.27% | $874 | $433,971 | 41 |
If you already have some experience in residential real estate investing, you might be thinking about branching out into multi-family homes in 2021. So, let’s take a look at what capitalization rate this property type offers in the 2021 US housing market. While looking at the real estate data and analysis below, please keep in mind that Mashvisor focuses on small multi-family real estate properties such as duplexes, triplexes, fourplexes, etc.
Table 5: Traditional Cap Rates by City in 2021, Multi-Family Real Estate Properties
| City and State | Traditional Cap Rate | Traditional Rental Income | Median Property Price | Price to Rent Ratio | |
| #1 | Camden, NJ | 6.90% | $1,325 | $139,541 | 9 |
| #2 | Naples, FL | 5.44% | $3,428 | $535,584 | 13 |
| #3 | Cleveland, OH | 5.32% | $852 | $121,358 | 12 |
| #4 | Portsmouth, VA | 5.31% | $1,276 | $181,827 | 12 |
| #5 | Rochester, NY | 5.12% | $1,036 | $144,707 | 12 |
| #6 | Akron, OH | 4.95% | $868 | $118,546 | 11 |
| #7 | Detroit, MI | 4.91% | $978 | $191,859 | 16 |
| #8 | Fort Wayne, IN | 4.90% | $669 | $105,282 | 13 |
| #9 | Aurora, IL | 4.71% | $1,615 | $220,160 | 11 |
| #10 | Baltimore, MD | 4.66% | $1,686 | $310,832 | 15 |
| #11 | Cincinnati, OH | 4.63% | $1,342 | $225,933 | 14 |
| #12 | Buffalo, NY | 4.54% | $983 | $162,720 | 14 |
| #13 | Syracuse, NY | 4.45% | $1,016 | $149,243 | 12 |
| #14 | Kalamazoo, MI | 4.45% | $1,367 | $309,464 | 19 |
| #15 | Fort Myers, FL | 4.31% | $1,717 | $319,086 | 15 |
| #16 | Grand Rapids, MI | 4.24% | $1,279 | $238,739 | 16 |
| #17 | Indianapolis, IN | 4.17% | $884 | $156,885 | 15 |
| #18 | Fort Pierce, FL | 4.05% | $1,402 | $258,478 | 15 |
| #19 | Tallahassee, FL | 3.83% | $1,454 | $335,078 | 19 |
| #20 | Memphis, TN | 3.73% | $994 | $200,969 | 17 |
| #21 | Trenton, NJ | 3.70% | $1,615 | $250,470 | 13 |
| #22 | Louisville, KY | 3.67% | $1,184 | $292,190 | 21 |
| #23 | Knoxville, TN | 3.67% | $1,272 | $306,089 | 20 |
| #24 | Bakersfield, CA | 3.66% | $2,946 | $474,491 | 13 |
| #25 | Norfolk, VA | 3.64% | $1,340 | $272,130 | 17 |
| #26 | Chattanooga, TN | 3.55% | $1,097 | $214,693 | 16 |
| #27 | Anaheim, CA | 3.50% | $7,205 | $1,511,016 | 17 |
| #28 | Long Beach, CA | 3.32% | $6,380 | $1,380,501 | 18 |
| #29 | St. Louis, MO | 3.30% | $932 | $234,704 | 21 |
| #30 | Riverside, CA | 3.29% | $3,139 | $875,205 | 23 |
| #31 | Troy, NY | 3.18% | $1,082 | $187,676 | 14 |
| #32 | San Bernardino, CA | 3.17% | $2,711 | $530,621 | 16 |
| #33 | Albany, NY | 3.15% | $1,298 | $215,449 | 14 |
| #34 | Orlando, FL | 3.13% | $1,404 | $374,344 | 22 |
| #35 | Jacksonville, FL | 3.06% | $1,220 | $274,900 | 19 |
| #36 | Fayetteville, NC | 3.02% | $1,008 | $239,621 | 20 |
| #37 | Corona, CA | 3.01% | $2,843 | $653,769 | 19 |
| #38 | Pittsburgh, PA | 2.92% | $1,141 | $311,488 | 23 |
| #39 | Philadelphia, PA | 2.84% | $1,419 | $441,905 | 26 |
| #40 | Tampa, FL | 2.83% | $1,460 | $356,650 | 20 |
| #41 | Kansas City, MO | 2.81% | $1,077 | $311,269 | 24 |
| #42 | Dearborn, MI | 2.77% | $1,025 | $190,433 | 15 |
| #43 | Charlotte, NC | 2.74% | $1,351 | $497,868 | 31 |
| #44 | Bloomington, IN | 2.74% | $1,439 | $443,287 | 26 |
| #45 | Pensacola, FL | 2.74% | $1,264 | $402,571 | 27 |
| #46 | Milwaukee, WI | 2.69% | $878 | $173,881 | 17 |
| #47 | Schenectady, NY | 2.69% | $1,125 | $161,288 | 12 |
| #48 | Torrance, CA | 2.60% | $4,768 | $1,115,384 | 20 |
| #49 | El Paso, TX | 2.57% | $1,240 | $255,715 | 17 |
| #50 | Tucson, AZ | 2.56% | $1,134 | $282,882 | 21 |
| #51 | Pasadena, CA | 2.54% | $6,290 | $1,679,960 | 22 |
| #52 | Little Rock, AR | 2.54% | $770 | $270,400 | 29 |
| #53 | Lubbock, TX | 2.54% | $1,232 | $237,368 | 16 |
| #54 | Roanoke, VA | 2.53% | $983 | $285,272 | 24 |
| #55 | West Palm Beach, FL | 2.43% | $1,609 | $382,650 | 20 |
| #56 | Corpus Christi, TX | 2.40% | $1,321 | $443,682 | 28 |
| #57 | Fresno, CA | 2.27% | $1,596 | $389,205 | 20 |
| #58 | Chicago, IL | 2.26% | $2,015 | $627,498 | 26 |
| #59 | Nashville, TN | 2.26% | $1,483 | $441,458 | 25 |
| #60 | Columbus, OH | 2.23% | $1,288 | $370,980 | 24 |
| #61 | Dallas, TX | 2.16% | $2,181 | $614,322 | 23 |
| #62 | Ventura, CA | 2.16% | $3,138 | $870,722 | 23 |
| #63 | Fort Lauderdale, FL | 2.15% | $2,177 | $683,723 | 26 |
| #64 | Las Vegas, NV | 2.11% | $1,206 | $375,665 | 26 |
| #65 | New Orleans, LA | 2.07% | $1,688 | $559,330 | 28 |
| #66 | Los Angeles, CA | 2.06% | $4,164 | $1,210,829 | 24 |
| #67 | Clearwater, Fl | 2.03% | $1,528 | $497,414 | 27 |
| #68 | Miami, FL | 1.96% | $2,039 | $620,852 | 25 |
| #69 | College Station, TX | 1.96% | $1,577 | $482,069 | 25 |
| #70 | Sarasota, FL | 1.96% | $6,001 | $1,802,250 | 25 |
| #71 | Fort Worth, TX | 1.94% | $1,578 | $540,087 | 29 |
| #72 | San Diego, CA | 1.90% | $3,803 | $1,238,902 | 27 |
| #73 | Minneapolis, MN | 1.88% | $1,534 | $434,005 | 24 |
| #74 | Glendale, CA | 1.88% | $5,406 | $1,637,200 | 25 |
| #75 | Oakland, CA | 1.88% | $3,049 | $1,042,267 | 28 |
| #76 | Atlanta, GA | 1.83% | $1,962 | $715,100 | 30 |
| #77 | Bryan, TX | 1.83% | $1,687 | $515,450 | 25 |
| #78 | Gainesville, FL | 1.77% | $1,352 | $510,629 | 31 |
| #79 | Lake Worth, FL | 1.65% | $1,555 | $477,240 | 26 |
| #80 | San Francisco, CA | 1.55% | $5,784 | $2,293,937 | 33 |
| #81 | Providence, RI | 1.54% | $1,443 | $397,360 | 23 |
| #82 | Richmond, VA | 1.53% | $1,480 | $529,594 | 30 |
| #83 | Madison, WI | 1.44% | $1,541 | $570,938 | 31 |
| #84 | San Antonio, TX | 1.39% | $1,237 | $345,499 | 23 |
| #85 | Phoenix, AZ | 1.37% | $1,452 | $777,815 | 45 |
| #86 | Albuquerque, NM | 1.21% | $1,056 | $404,446 | 32 |
| #87 | Reno, NV | 1.16% | $1,490 | $697,982 | 39 |
| #88 | North Bergen, NJ | 1.10% | $2,127 | $641,696 | 25 |
| #89 | Houston, TX | 1.09% | $1,413 | $560,492 | 33 |
| #90 | Jersey City, NJ | 1.03% | $2,030 | $816,248 | 34 |
| #91 | Charleston, SC | 1.01% | $2,076 | $1,153,999 | 46 |
| #92 | San Jose, CA | 0.79% | $3,475 | $1,341,729 | 32 |
| #93 | Tempe, AZ | 0.77% | $1,315 | $717,086 | 45 |
| #94 | Denton, TX | 0.76% | $1,523 | $744,525 | 41 |
| #95 | Honolulu, HI | 0.66% | $2,842 | $1,775,184 | 52 |
| #96 | Austin, TX | 0.66% | $1,541 | $572,363 | 31 |
| #97 | New York, NY | 0.59% | $2,319 | $1,317,502 | 47 |
| #98 | Miami Beach, FL | 0.41% | $2,511 | $1,535,733 | 51 |
| #99 | Washington, DC | 0.40% | $2,227 | $1,403,254 | 53 |
| #100 | Portland, OR | 0.38% | $1,969 | $1,393,150 | 59 |
If you’re interested in buying a multi-family property to rent out on a long-term basis, find out the 12 best multifamily markets for 2021.
While foreclosures are not really a property type, they are real estate listings which deserve their own categorization in our analysis of the best places to invest in real estate in 2021. Buying a foreclosed home comes with a couple of important benefits compared to other rental properties for sale. First and foremost, foreclosed homes are usually sold below market value, which makes them more profitable as investment properties. Second, they experience less competition from investors, which means that you will have more bargaining power as a property buyer. So, let’s have a look at what rate of return foreclosures are expected to bring this year:
Table 6: Traditional Cap Rates by City in 2021, Foreclosed Homes
| City and State | Traditional Cap Rate | Traditional Rental Income | Median Property Price | Price to Rent Ratio | |
| #1 | Detroit, MI | 6.95% | $680 | $74,545 | 9 |
| #2 | New Orleans, LA | 6.62% | $1,444 | $177,750 | 10 |
| #3 | Mobile, AL | 5.87% | $888 | $127,475 | 12 |
| #4 | Aurora, IL | 5.76% | $1,570 | $192,863 | 10 |
| #5 | Akron, OH | 5.76% | $838 | $104,750 | 10 |
| #6 | Memphis, TN | 5.75% | $914 | $125,433 | 11 |
| #7 | Cleveland, OH | 5.37% | $846 | $103,000 | 10 |
| #8 | Lakeland, FL | 5.36% | $1,332 | $198,500 | 12 |
| #9 | Columbia, SC | 5.20% | $1,062 | $144,850 | 11 |
| #10 | Hollywood, FL | 5.18% | $1,619 | $181,799 | 9 |
| #11 | Trenton, NJ | 5.16% | $1,555 | $204,573 | 11 |
| #12 | Baltimore, MD | 5.08% | $1,462 | $210,024 | 12 |
| #13 | Indianapolis, IN | 4.93% | $988 | $161,738 | 14 |
| #14 | Richmond, VA | 4.78% | $1,479 | $237,188 | 13 |
| #15 | Anchorage, AK | 4.65% | $1,738 | $265,333 | 13 |
| #16 | Jackson, MS | 4.60% | $1,216 | $216,300 | 15 |
| #17 | Columbus, OH | 4.53% | $995 | $169,111 | 14 |
| #18 | Philadelphia, PA | 4.28% | $1,351 | $244,400 | 15 |
| #19 | Toledo, OH | 4.28% | $919 | $146,500 | 13 |
| #20 | Bradenton, FL | 4.26% | $1,728 | $255,000 | 12 |
| #21 | Dayton, OH | 4.22% | $943 | $137,300 | 12 |
| #22 | Columbus, GA | 4.09% | $937 | $163,500 | 15 |
| #23 | Houston, TX | 4.07% | $1,422 | $229,438 | 13 |
| #24 | Miami, FL | 3.98% | $2,229 | $412,811 | 15 |
| #25 | Atlanta, GA | 3.97% | $3,295 | $661,182 | 17 |
| #26 | Syracuse, NY | 3.96% | $1,057 | $144,975 | 11 |
| #27 | San Bernardino, CA | 3.94% | $1,647 | $343,750 | 17 |
| #28 | Birmingham, AL | 3.93% | $956 | $169,385 | 15 |
| #29 | Fort Myers, FL | 3.93% | $1,458 | $245,790 | 14 |
| #30 | Milwaukee, WI | 3.87% | $947 | $146,095 | 13 |
| #31 | Orlando, FL | 3.83% | $1,435 | $273,263 | 16 |
| #32 | Gainesville, FL | 3.82% | $1,084 | $191,600 | 15 |
| #33 | Minneapolis, MN | 3.72% | $1,485 | $257,944 | 14 |
| #34 | Pensacola, FL | 3.71% | $1,244 | $213,250 | 14 |
| #35 | Jacksonville, FL | 3.67% | $1,248 | $230,045 | 15 |
| #36 | Buffalo, NY | 3.67% | $1,273 | $182,800 | 12 |
| #37 | Denver, Co | 3.63% | $1,785 | $403,677 | 19 |
| #38 | Wichita, KS | 3.56% | $867 | $153,029 | 15 |
| #39 | Saint Petersburg, FL | 3.51% | $1,233 | $252,286 | 17 |
| #40 | Gilbert, AZ | 3.50% | $2,095 | $437,733 | 17 |
| #41 | Chicago, IL | 3.43% | $1,382 | $233,960 | 14 |
| #42 | Lexington, KY | 3.40% | $1,207 | $221,333 | 15 |
| #43 | Boca Raton, FL | 3.38% | $2,639 | $518,638 | 16 |
| #44 | Rochester, NY | 3.36% | $961 | $132,450 | 11 |
| #45 | Seattle, WA | 3.36% | $3,659 | $875,000 | 20 |
| #46 | Baton Rouge, LA | 3.35% | $766 | $170,400 | 19 |
| #47 | Little Rock, AR | 3.34% | $776 | $174,164 | 19 |
| #48 | Abilene, TX | 3.32% | $1,228 | $217,333 | 15 |
| #49 | Colorado Springs, CO | 3.29% | $1,620 | $353,789 | 18 |
| #50 | Albuquerque, NM | 3.28% | $1,150 | $231,304 | 17 |
| #51 | Henderson, NV | 3.28% | $1,545 | $428,000 | 23 |
| #52 | Pittsburgh, PA | 3.25% | $1,118 | $240,421 | 18 |
| #53 | North Bergen, NJ | 3.21% | $2,292 | $510,750 | 19 |
| #54 | Las Vegas, NV | 3.19% | $1,467 | $405,774 | 23 |
| #55 | Aurora, CO | 3.16% | $1,767 | $398,057 | 19 |
| #56 | Vancouver, WA | 3.14% | $1,673 | $373,500 | 19 |
| #57 | Washington, DC | 3.06% | $1,828 | $381,767 | 17 |
| #58 | Mesa, AZ | 3.04% | $1,436 | $337,083 | 20 |
| #59 | Riverside, CA | 3.04% | $2,127 | $470,547 | 18 |
| #60 | Anaheim, CA | 3.04% | $3,117 | $769,000 | 21 |
| #61 | Bakersfield, CA | 3.02% | $1,414 | $295,994 | 17 |
| #62 | Pompano Beach, FL | 3.02% | $1,393 | $262,700 | 16 |
| #63 | Nashville, TN | 2.98% | $1,474 | $330,000 | 19 |
| #64 | Phoenix, AZ | 2.97% | $1,299 | $308,956 | 20 |
| #65 | Chandler, AZ | 2.96% | $1,685 | $392,600 | 19 |
| #66 | San Antonio, TX | 2.96% | $1,228 | $238,667 | 16 |
| #67 | Tallahassee, FL | 2.96% | $1,227 | $299,133 | 20 |
| #68 | Jersey City, NJ | 2.92% | $2,228 | $501,747 | 19 |
| #69 | Plantation, FL | 2.91% | $2,200 | $480,557 | 18 |
| #70 | Tulsa, OK | 2.90% | $877 | $181,455 | 17 |
| #71 | Tucson, AZ | 2.89% | $1,088 | $254,747 | 20 |
| #72 | Tampa, FL | 2.87% | $1,458 | $305,333 | 17 |
| #73 | Knoxville, TN | 2.67% | $928 | $291,000 | 26 |
| #74 | Kalamazoo, MI | 2.63% | $1,191 | $227,333 | 16 |
| #75 | Cincinnati, OH | 2.55% | $1,029 | $213,714 | 17 |
| #76 | San Diego, CA | 2.52% | $2,667 | $677,726 | 21 |
| #77 | Lake Worth, FL | 2.50% | $1,413 | $295,492 | 17 |
| #78 | Stockton, CA | 2.47% | $1,513 | $344,167 | 19 |
| #79 | Fort Collins, CO | 2.45% | $1,393 | $422,667 | 25 |
| #80 | Silver Spring, MD | 2.45% | $1,638 | $432,667 | 22 |
| #81 | Los Angeles, CA | 2.33% | $3,093 | $948,573 | 26 |
| #82 | Sarasota, FL | 2.24% | $1,952 | $516,250 | 22 |
| #83 | Sacramento, CA | 2.12% | $1,496 | $398,857 | 22 |
| #84 | Schenectady, NY | 2.11% | $1,108 | $193,533 | 15 |
| #85 | Fresno, CA | 2.03% | $877 | $244,300 | 23 |
| #86 | Spokane, WA | 2.03% | $948 | $265,750 | 23 |
| #87 | Louisville, KY | 1.99% | $810 | $220,667 | 23 |
| #88 | Tempe, AZ | 1.99% | $1,711 | $521,333 | 25 |
| #89 | New York, NY | 1.95% | $2,148 | $644,089 | 25 |
| #90 | Dothan, AL | 1.71% | $914 | $297,450 | 27 |
| #91 | Chattanooga, TN | 1.66% | $899 | $256,500 | 24 |
| #92 | Long Beach, CA | 1.65% | $2,412 | $761,143 | 26 |
| #93 | Oakland, CA | 1.65% | $3,853 | $1,244,200 | 27 |
| #94 | Portland, OR | 1.44% | $1,623 | $381,400 | 20 |
| #95 | Grand Rapids, MI | 1.37% | $836 | $231,400 | 23 |
| #96 | Tacoma, WA | 1.30% | $1,150 | $366,286 | 27 |
| #97 | Fort Lauderdale, FL | 1.24% | $2,818 | $710,688 | 21 |
| #98 | San Jose, CA | 1.21% | $3,093 | $1,141,857 | 31 |
| #99 | Miami Beach, FL | 0.98% | $2,473 | $493,400 | 17 |
| #100 | Naples, FL | 0.42% | $1,371 | $525,986 | 32 |
Traditional Rentals Capitalization Rate Data by Property Type: Summary
Single-Family Homes for Sale in 2021
- Single-Family Home Cap Rate by City Range: From 1.04% to 4.94%
- Highest Single-Family Home Cap Rate: Detroit real estate market, 4.94%
- Lowest Single-Family Home Cap Rate: Irvine real estate market, 1.04%
Condos and Apartments for Sale in 2021
- Condo and Apartment Cap Rate by City Range: From 0.51% to 5.35%
- Highest Condo and Apartment Cap Rate: Lake Worth real estate market, 5.35%
- Lowest Condo and Apartment Cap Rate: Corpus Christi real estate market, 0.51%
Townhouses for Sale in 2021
- Townhouse Cap Rate by City Range: From 0.27% to 4.73%
- Highest Townhouse Cap Rate: Houston real estate market, 4.73%
- Lowest Townhouse Cap Rate: Boise real estate market, 0.27%
Multi-Family Homes for Sale in 2021
- Multi-Family Home Cap Rate by City Range: From 0.38% to 6.90%
- Highest Multi-Family Home Cap Rate: Camden real estate market, 6.90%
- Lowest Multi-Family Home Cap Rate: Portland real estate market, 0.38%
Foreclosures for Sale in 2021
- Foreclosure Cap Rate by City Range: From 0.42% to 6.95%
- Highest Foreclosure Cap Rate: Detroit real estate market, 6.95%
- Lowest Foreclosure Cap Rate: Naples real estate market, 0.42%
2021 Cap Rates by Neighborhood
As you might have already heard many times, location is arguably the most important factor when deciding where to invest in real estate. This includes the best places for long-term rental markets. However, location is not limited to the real estate market only but includes the specific area within the market as well.
As a matter of fact, neighborhoods within the same city can offer drastically different capitalization rates. That’s why it is not enough to look at the 2021 cap rates by city to choose where to buy a rental property. You also need to consider the area.
No worries, this doesn’t mean that you need to conduct tedious rental market analysis over dozens of different areas to select the most profitable one. You can use Mashvisor’s real estate heatmap to perform neighborhood analysis quickly and effortlessly.
While this tool does not show real estate cap rate explicitly, there are two ways in which you can get a close approximation to this metric at the neighborhood level.
First, you can search for areas with low listings price (marked in red) and high traditional rental income (marked in green).
Second, you can use the traditional cash on cash return measure which is very similar to the cap rate calculation when you don’t take into account the method of financing.
Mashvisor’s Real Estate Heatmap
What Is Cap Rate in Real Estate?
Cap Rate Definition
Cap Rate = Net Operating Income/Current Market Value = NOI/CMV
What Is Cash on Cash Return in Real Estate?
Cash on Cash Return Definition
Cash on Cash Return = Annual Before-Tax Cash Flow/Total Cash Invested
2021 Cap Rates by Traditional Rental Property
Similarly to the differences between areas within the same city, there exist major discrepancies between investment properties for sale within the same neighborhood. In order to guarantee yourself a profitable real estate investment, you have to conduct rental property analysis before buying.
One of the fastest and most accurate ways to perform investment property analysis is to use a cap rate calculator, like the one available on our platform. Mashvisor’s cap rate calculator provides you with an accurate estimation of the cap rate which you can expect to generate from any residential property in the US market. Our estimations are based on nationwide real estate data and traditional rental comps. We compare your selected property to dozens of comparable properties in the area to tell you what return you can expect from it.
That’s not all. Mashvisor functions as a comprehensive investment property calculator which provides you with a number of other metrics as well:
- Listing price
- One-time startup costs
- Traditional rental income
- Recurring monthly expenses
- Cash flow
- Occupancy rate
- Traditional cash on cash return
- Traditional cal rate (of course!)
Mashvisor’s Investment Property Calculator
With the help of our real estate investment tools, you don’t need to worry about what does cap rate mean and how to calculate cap rate. You get readily available calculations for all properties listed on our platform as well as any other property whose address you enter.
One thing though that you have to worry about is what is a good cap rate for long-term rentals properties. Unlike most real estate investment questions, this one has a very straightforward answer. A good cap rate is usually between 8% and 12%. Although the capitalization rate shows how much profit you will make from a property, you don’t want it to be too high as it is also a measure of the risk involved in investing in a certain traditional rental.
Knowing what traditional cap rates by city to expect in 2021 is a great place to start when planning to buy a long-term rental property. While profitable investment opportunities are available across the US housing market, it is much easier to find a top-performing property in one of these best places for investing.
To speed up your investment property search and analysis, sign up for Mashvisor now. We will help you turn 3 months of research into 15 minutes.