Short answer: By cap rate on a median-priced home (Census ACS 2024), the top five of the 50 largest US rental markets are Detroit, MI; Cleveland, OH; Memphis, TN; Philadelphia, PA; and Kansas City, MO. At 7.40% with 20% down, only Detroit, MI and Cleveland, OH cash-flow at the median price.
Definition
A city's median cap rate is the yearly net operating income of a median-priced home renting for the median rent, divided by that price. Because it ignores the loan, it compares rental markets on equal terms; it says nothing about any single property.
By the numbers: Census ACS 2024 with FirstDoor defaults: Detroit, MI leads the 50 largest US rental markets at 10.15%, Oakland, CA is lowest at 1.63%. At 7.40% with 20% down (Freddie Mac, October 15, 2026), only Detroit, MI and Cleveland, OH cash-flow at the median price. See all 50 markets.
The short answer
Ranked by cap rate on a median-priced home, the top of the list is Detroit, MI; Cleveland, OH; Memphis, TN; Philadelphia, PA; and Kansas City, MO. The leader, Detroit, MI, earns about 10.15% before the mortgage; the bottom, Oakland, CA, earns about 1.63%.
With a loan, the picture is harder. At 7.40% (Freddie Mac, October 15, 2026) with 20% down, only 2 of 49 cities (Detroit, MI and Cleveland, OH) cash-flow on a median home renting for the median 3-bedroom rent. The US median home loses about $990 a month on the same terms.
Good to know: A "best city" is a place where typical numbers are less bad, not a promise any one house works. The deal is always the specific property, price and rent.
How FirstDoor ranked them
For each city, FirstDoor took the median owner-occupied home value, median 3-bedroom gross rent, median property taxes and the rental vacancy rate from the Census Bureau's 2024 American Community Survey 1-year estimates. It then ran that median home through the same math as the free deal calculator:
- Cap rate: yearly net operating income ÷ price. Rent minus 5% vacancy, 5% maintenance, 8% management, the city's median property tax and $1,200 a year insurance (assumed). It ignores the loan, so it compares cities fairly.
- Cash flow: the same income minus principal and interest with 20% down at 7.40% for 30 years.
- Rental vacancy and 1-year rent change (2023 to 2024, 3-bedroom gross rent) are shown for context but do not change the rank.
Tip: Cap rate is the cleanest city-to-city comparison because financing is the same everywhere. See what a good cap rate is for how to read the number.
All 49 markets ranked
Ranked by cap rate on the median home. Cash flow is monthly with 20% down at 7.40%. Each city links to its full market page.
| # | City | Median value | 3-bed rent / mo | Cap rate | Cash flow / mo | Rental vacancy | Rent, 1 yr |
|---|---|---|---|---|---|---|---|
| 1 | Detroit, MI | $95,900 | $1,255 | 10.15% | $280 | 4.6% | +5.3% |
| 2 | Cleveland, OH | $109,600 | $1,105 | 7.28% | $58 | 7.5% | −4.0% |
| 3 | Memphis, TN | $209,800 | $1,418 | 5.15% | −$262 | 10.1% | +7.7% |
| 4 | Philadelphia, PA | $253,600 | $1,573 | 4.80% | −$390 | 4.7% | +3.6% |
| 5 | Kansas City, MO | $261,600 | $1,641 | 4.65% | −$436 | 4.6% | +11.9% |
| 6 | Tucson, AZ | $299,700 | $1,688 | 4.55% | −$524 | 4.8% | +0.5% |
| 7 | San Antonio, TX | $260,900 | $1,707 | 4.43% | −$481 | 10.2% | +7.7% |
| 8 | Tulsa, OK | $234,400 | $1,371 | 4.36% | −$448 | 5.8% | +7.4% |
| 9 | Baltimore, MD | $247,400 | $1,569 | 4.35% | −$473 | 4.3% | +1.1% |
| 10 | Indianapolis, IN | $241,500 | $1,406 | 4.30% | −$472 | 4.1% | −4.9% |
| 11 | Jacksonville, FL | $325,300 | $1,767 | 4.21% | −$661 | 11.1% | +7.0% |
| 12 | Oklahoma City, OK | $259,300 | $1,479 | 4.20% | −$530 | 6.8% | +1.6% |
| 13 | Columbus, OH | $279,900 | $1,672 | 4.18% | −$576 | 4.6% | +15.7% |
| 14 | Orlando, FL | $430,200 | $2,293 | 4.17% | −$888 | 6.8% | +6.3% |
| 15 | Houston, TX | $301,200 | $1,819 | 4.11% | −$636 | 12.0% | +6.6% |
| 16 | Cincinnati, OH | $263,300 | $1,588 | 4.06% | −$569 | 5.5% | +8.6% |
| 17 | Phoenix, AZ | $454,900 | $2,142 | 3.97% | −$1,015 | 6.3% | +7.5% |
| 18 | Fort Worth, TX | $330,500 | $1,964 | 3.96% | −$741 | 9.3% | +0.6% |
| 19 | Omaha, NE | $269,500 | $1,658 | 3.95% | −$605 | 3.9% | +12.3% |
| 20 | Louisville, KY | $241,700 | $1,294 | 3.93% | −$548 | 8.2% | −1.5% |
| 21 | El Paso, TX | $209,600 | $1,319 | 3.87% | −$486 | 7.8% | −4.5% |
| 22 | Nashville, TN | $438,800 | $2,064 | 3.79% | −$1,044 | 10.3% | +4.9% |
| 23 | Colorado Springs, CO | $479,500 | $2,145 | 3.75% | −$1,156 | 3.0% | +2.3% |
| 24 | Milwaukee, WI | $207,900 | $1,273 | 3.71% | −$508 | 8.0% | +5.7% |
| 25 | Las Vegas, NV | $458,300 | $2,067 | 3.69% | −$1,129 | 6.8% | +7.9% |
| 26 | Fresno, CA | $396,300 | $1,902 | 3.69% | −$977 | n/a | +8.6% |
| 27 | Dallas, TX | $340,400 | $1,856 | 3.56% | −$875 | 10.8% | +7.3% |
| 28 | Charlotte, NC | $431,900 | $1,969 | 3.52% | −$1,126 | 10.0% | +9.1% |
| 29 | Albuquerque, NM | $324,600 | $1,550 | 3.48% | −$858 | 9.0% | +2.2% |
| 30 | Denver, CO | $636,400 | $2,570 | 3.30% | −$1,774 | 5.8% | +1.3% |
| 31 | Tampa, FL | $494,400 | $2,176 | 3.27% | −$1,390 | 6.3% | +1.0% |
| 32 | Raleigh, NC | $450,300 | $1,909 | 3.18% | −$1,299 | 5.0% | +5.5% |
| 33 | Sacramento, CA | $515,800 | $2,170 | 3.15% | −$1,502 | 4.5% | +10.3% |
| 34 | Minneapolis, MN | $368,300 | $1,748 | 3.13% | −$1,079 | 8.6% | −7.4% |
| 35 | Chicago, IL | $341,200 | $1,661 | 2.93% | −$1,057 | 3.7% | +7.0% |
| 36 | Atlanta, GA | $462,200 | $1,918 | 2.81% | −$1,476 | 12.6% | +11.6% |
| 37 | Portland, OR | $588,200 | $2,364 | 2.74% | −$1,913 | 6.8% | +14.0% |
| 38 | Washington, DC | $733,400 | $2,567 | 2.65% | −$2,440 | 6.7% | −2.4% |
| 39 | Miami, FL | $598,200 | $2,179 | 2.53% | −$2,053 | 6.2% | +13.2% |
| 40 | San Diego, CA | $980,700 | $3,052 | 2.32% | −$3,539 | 4.9% | +3.0% |
| 41 | Austin, TX | $571,000 | $2,217 | 2.30% | −$2,067 | 5.9% | +0.9% |
| 42 | Long Beach, CA | $849,500 | $2,676 | 2.28% | −$3,088 | n/a | +4.0% |
| 43 | Boston, MA | $722,800 | $2,153 | 2.15% | −$2,709 | 4.2% | −2.0% |
| 44 | Seattle, WA | $950,800 | $2,951 | 2.14% | −$3,572 | 5.6% | −4.2% |
| 45 | Jersey City, NJ | $571,700 | $2,249 | 2.06% | −$2,183 | 4.5% | +5.2% |
| 46 | Los Angeles, CA | $947,900 | $2,564 | 1.89% | −$3,760 | 4.1% | +4.4% |
| 47 | San Jose, CA | $1,271,200 | $3,368 | 1.77% | −$5,171 | 3.0% | +1.2% |
| 48 | New York, NY | $778,600 | $2,094 | 1.64% | −$3,251 | 3.7% | +2.8% |
| 49 | Oakland, CA | $884,000 | $2,474 | 1.63% | −$3,692 | 5.6% | +6.9% |
| United States | $360,600 | $1,677 | 3.35% | −$990 | 5.7% | +6.7% |
2 of 49 cities reach a 6% cap rate on the median home. The spread from first to last is 8.5 percentage points.
Good to know: These are citywide survey medians with margins of error, and the median rental and median owner-occupied home are different houses. ACS gross rent includes utilities the renter pays, so a landlord's rent can be lower. ACS reports rents above $3,500 only as "$3,500+", so San Francisco, CA is left out, and taxes above $10,000 are capped at $10,000.
What a ranking like this misses
A high cap rate often comes with reasons. Before you pick a city off this list, check:
- Vacancy. Memphis, TN and San Antonio, TX have rental vacancy of 8% or more, above FirstDoor's 5% default. Use the city's real rate; the vacancy guide lists all 50.
- Neighborhood, not city. Citywide medians blend very different areas. A cheap house on a weak block can have high turnover, repairs and tenant risk that a median never shows.
- Older housing. Lower prices often mean older homes. Budget more than 5% for maintenance on an older property.
- Taxes and insurance. Both vary by city and change your cap rate directly. See property taxes by city and insurance costs.
- Distance. Buying far from home usually means paying for management and trusting someone else's eyes on repairs.
Red flag: A turnkey seller pitching a city as "the best market" with a pro forma cap rate far above the city's median. Rerun it with real rent comps, the real tax bill and an insurance quote.
Worked example
A median-priced home in Detroit, MI ($95,900, Census ACS 2024) renting for the city's median 3-bedroom gross rent ($1,255/mo). 20% down at 7.40% for 30 years (Freddie Mac average, October 15, 2026), the city's median property tax ($1,415/yr), $1,200/yr insurance (assumed), 5% vacancy, 5% maintenance, 8% management, closing costs assumed at 3% ($2,877).
| Price | $95,900 |
| Rent / mo | $1,255 |
| Mortgage (P&I) | −$531 |
| Operating costs (/mo) | −$444 |
| US median home, same terms | −$990/mo |
Frequently asked questions
What are the best cities to buy a rental property?
By cap rate on a median-priced home (Census ACS 2024), the top five of the 50 largest US rental markets are Detroit, MI; Cleveland, OH; Memphis, TN; Philadelphia, PA; and Kansas City, MO. At 7.40% with 20% down, only Detroit, MI and Cleveland, OH cash-flow at the median price.
Can you still find cash-flowing rentals in 2026?
Yes, but rarely at the median price with 20% down. Nationally a median home renting for the median 3-bedroom rent loses about $990 a month at 7.40%. Cash-flowing deals usually come from buying below median, higher rent per dollar of price, a bigger down payment or a house hack.
Is cap rate or cash flow better for comparing cities?
Cap rate, because it ignores financing, which is the same in every city. Cash flow is what you actually live with, so check it on the specific property once you have a city and a loan quote.
Are cheap cities always better for rentals?
No. Lower prices often come with higher vacancy, older homes and more repairs. A city ranking is a starting point for research, not a buy signal for any one house.
Keep learning
Sources
Educational content, not financial advice. Loan programs and requirements change; confirm with a lender.