Short answer: By cap rate on a median-priced home (Census ACS 2024), West Virginia ranks first at about 4.68%, followed by Mississippi, Arkansas, Louisiana and Oklahoma. That ranks typical numbers statewide; the right market for you depends on the city, the property and your price.
Definition
A state's median cap rate is the yearly net operating income of a home at the state's median value renting for the state's median 3-bedroom rent, divided by that price. It compares states on equal terms before financing; it says nothing about any single city or property.
By the numbers: Census ACS 2024 with FirstDoor defaults: West Virginia leads the 50 states and DC at 4.68%, New Jersey is lowest at 2.15%. At 7.32% with 20% down (Freddie Mac, October 22, 2026), none cash-flow at the median price.
The short answer
Ranked by cap rate on a median-priced home, the top five states are West Virginia, Mississippi, Arkansas, Louisiana and Oklahoma. West Virginia leads at about 4.68% before the mortgage; New Jersey is last at about 2.15%.
With a loan, none of the 51 cash-flows at the median price. At 7.32% (Freddie Mac, October 22, 2026) with 20% down, a median home renting for the state's median 3-bedroom rent loses money everywhere, from about $273 a month in West Virginia to $3,076 in Hawaii.
The more useful number is the break-even price: what you could pay for a home renting at the state median and still reach $0 cash flow. It runs from about 73% of the median home value in West Virginia to 39% in Hawaii. Nationally it is about 57%.
Good to know: Statewide medians mix big cities, suburbs and rural areas. They tell you where typical numbers are least bad, not where to buy. For city-level numbers see the best cities ranking.
How FirstDoor ranked them
For each state and DC, FirstDoor took the median owner-occupied home value (B25077), median 3-bedroom gross rent (B25031), median real estate taxes (B25103) and rental vacancy (B25004 and B25003) from the Census Bureau's 2024 American Community Survey 1-year estimates. It 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 state's median property tax and $1,200 a year insurance (assumed). It ignores the loan, so it compares states fairly.
- Cash flow: the same income minus principal and interest with 20% down at 7.32% for 30 years.
- Break-even price: the highest price at which a home renting for the state's median 3-bedroom rent has $0 cash flow on those terms, with tax at the state's median rate. The max offer calculator does the same math for any listing.
Tip: Cap rate is the cleanest state-to-state comparison because financing costs the same everywhere. See what a good cap rate is for how to read it.
All 50 states and DC ranked
Ranked by cap rate on the median home. Cash flow is monthly with 20% down at 7.32%.
| # | State | Median value | 3-bed rent / mo | Cap rate | Cash flow / mo | Break-even price | Rental vacancy |
|---|---|---|---|---|---|---|---|
| 1 | West Virginia | $170,800 | $1,023 | 4.68% | −$273 | $125,000 | 5.7% |
| 2 | Mississippi | $186,500 | $1,083 | 4.42% | −$339 | $130,000 | 7.1% |
| 3 | Arkansas | $215,600 | $1,181 | 4.32% | −$409 | $147,000 | 6.0% |
| 4 | Louisiana | $223,200 | $1,219 | 4.30% | −$426 | $151,000 | 8.1% |
| 5 | Oklahoma | $222,100 | $1,238 | 4.19% | −$445 | $149,000 | 5.9% |
| 6 | Florida | $396,900 | $2,076 | 4.09% | −$828 | $262,000 | 8.4% |
| 7 | Alabama | $233,300 | $1,174 | 4.06% | −$494 | $148,000 | 7.6% |
| 8 | Arizona | $426,000 | $2,011 | 3.93% | −$944 | $265,000 | 6.8% |
| 9 | Indiana | $243,500 | $1,276 | 3.93% | −$542 | $155,000 | 5.2% |
| 10 | Delaware | $371,600 | $1,742 | 3.82% | −$860 | $226,000 | 7.6% |
| 11 | Nevada | $455,500 | $2,091 | 3.78% | −$1,067 | $274,000 | 7.2% |
| 12 | Texas | $313,200 | $1,729 | 3.74% | −$746 | $200,000 | 8.5% |
| 13 | Missouri | $254,400 | $1,285 | 3.70% | −$613 | $155,000 | 5.1% |
| 14 | Michigan | $254,200 | $1,380 | 3.69% | −$614 | $159,000 | 5.7% |
| 15 | Kentucky | $226,000 | $1,125 | 3.65% | −$554 | $135,000 | 4.2% |
| 16 | North Dakota | $266,100 | $1,365 | 3.64% | −$656 | $162,000 | 3.2% |
| 17 | Kansas | $238,700 | $1,288 | 3.56% | −$604 | $146,000 | 5.8% |
| 18 | Alaska | $376,500 | $1,860 | 3.49% | −$975 | $224,000 | 6.7% |
| 19 | Pennsylvania | $277,600 | $1,425 | 3.46% | −$725 | $165,000 | 4.8% |
| 20 | South Carolina | $299,500 | $1,305 | 3.44% | −$787 | $165,000 | 7.9% |
| 21 | Iowa | $227,300 | $1,213 | 3.43% | −$599 | $136,000 | 5.7% |
| 22 | Tennessee | $332,600 | $1,432 | 3.43% | −$878 | $183,000 | 6.7% |
| 23 | Georgia | $343,300 | $1,568 | 3.40% | −$914 | $194,000 | 7.7% |
| 24 | Virginia | $403,500 | $1,808 | 3.40% | −$1,074 | $227,000 | 4.3% |
| 25 | New Mexico | $279,900 | $1,267 | 3.39% | −$747 | $156,000 | 6.8% |
| 26 | Ohio | $239,800 | $1,229 | 3.32% | −$655 | $139,000 | 4.8% |
| 27 | Maryland | $436,300 | $1,980 | 3.24% | −$1,219 | $242,000 | 4.8% |
| 28 | North Carolina | $333,000 | $1,422 | 3.23% | −$934 | $177,000 | 7.4% |
| 29 | Minnesota | $344,600 | $1,589 | 3.17% | −$983 | $190,000 | 5.7% |
| 30 | Nebraska | $263,100 | $1,328 | 3.09% | −$768 | $148,000 | 3.7% |
| 31 | Colorado | $574,600 | $2,178 | 3.03% | −$1,707 | $285,000 | 4.6% |
| 32 | Idaho | $446,400 | $1,686 | 3.02% | −$1,330 | $219,000 | 4.8% |
| 33 | Maine | $341,900 | $1,483 | 3.01% | −$1,021 | $179,000 | 3.6% |
| 34 | Wisconsin | $294,700 | $1,357 | 2.88% | −$913 | $155,000 | 4.3% |
| 35 | Illinois | $280,700 | $1,484 | 2.85% | −$876 | $157,000 | 4.2% |
| 36 | Oregon | $497,500 | $1,958 | 2.85% | −$1,553 | $245,000 | 5.1% |
| 37 | Wyoming | $339,500 | $1,287 | 2.80% | −$1,073 | $160,000 | 3.4% |
| 38 | District of Columbia | $733,400 | $2,567 | 2.65% | −$2,408 | $333,000 | 6.7% |
| 39 | Montana | $425,400 | $1,562 | 2.64% | −$1,402 | $194,000 | 4.9% |
| 40 | South Dakota | $289,600 | $1,193 | 2.62% | −$958 | $138,000 | 7.1% |
| 41 | Utah | $545,200 | $1,837 | 2.61% | −$1,810 | $238,000 | 6.1% |
| 42 | Washington | $602,200 | $2,183 | 2.58% | −$2,013 | $275,000 | 4.8% |
| 43 | Connecticut | $396,900 | $1,798 | 2.50% | −$1,355 | $200,000 | 4.3% |
| 44 | New Hampshire | $458,800 | $1,930 | 2.42% | −$1,598 | $221,000 | 3.8% |
| 45 | Vermont | $352,800 | $1,488 | 2.39% | −$1,237 | $168,000 | 2.1% |
| 46 | Hawaii | $875,900 | $2,483 | 2.38% | −$3,076 | $338,000 | 5.9% |
| 47 | New York | $449,800 | $1,852 | 2.33% | −$1,598 | $212,000 | 3.8% |
| 48 | Rhode Island | $455,700 | $1,689 | 2.31% | −$1,626 | $201,000 | 3.8% |
| 49 | California | $759,500 | $2,431 | 2.28% | −$2,728 | $311,000 | 4.3% |
| 50 | Massachusetts | $607,400 | $2,079 | 2.17% | −$2,240 | $254,000 | 3.6% |
| 51 | New Jersey | $496,000 | $2,159 | 2.15% | −$1,835 | $236,000 | 3.7% |
| United States | $360,600 | $1,677 | 3.35% | −$974 | $204,000 | 5.7% |
No state's median 3-bedroom rent comes close to the 1% rule. The highest rent-to-price ratio is 0.60% in West Virginia. Median home values run from $170,800 in West Virginia to $875,900 in Hawaii.
Good to know: These are survey medians with margins of error, and the median rental and the median owner-occupied home are different houses. ACS gross rent includes utilities the renter pays, so a landlord's rent can be lower.
How to use a state ranking
A state list is a first filter, not a buy signal. Before you narrow down:
- Go down to the city and the block. Inside one state the numbers swing widely. Compare 50 city market pages, then score real listings.
- Check vacancy. Louisiana has statewide rental vacancy of 8% or more, above FirstDoor's 5% default. The vacancy guide explains how to set it.
- Price in insurance and taxes. Insurance here is a flat $1,200 a year, and some states run far higher. See insurance costs and property taxes.
- Landlord rules differ by state. Eviction timelines, deposit limits and rent rules change your risk. Read your state's landlord-tenant law before you buy.
- Buy below break-even. If a listing costs more than the break-even price for its rent, it loses money each month on these terms. Fix it with price, down payment or rent, not hope.
Red flag: A seller pitching a state as "landlord friendly, great cash flow" with a pro forma that beats the state's median numbers by a wide margin. Rerun it with real rent comps, the tax bill and an insurance quote.
Worked example
A median-priced home in West Virginia ($170,800, Census ACS 2024) renting for the state's median 3-bedroom gross rent ($1,023/mo). 20% down at 7.32% for 30 years (Freddie Mac average, October 22, 2026), the state's median property tax ($881/yr), $1,200/yr insurance (assumed), 5% vacancy, 5% maintenance, 8% management, closing costs assumed at 3% ($5,124).
| Price | $170,800 |
| Rent / mo | $1,023 |
| Mortgage (P&I) | −$939 |
| Operating costs (/mo) | −$358 |
| Break-even price | $125,000 |
Frequently asked questions
What is the best state to buy a rental property?
By cap rate on a median-priced home (Census ACS 2024), West Virginia ranks first at about 4.68%, followed by Mississippi, Arkansas, Louisiana and Oklahoma. That ranks typical numbers statewide; the right market for you depends on the city, the property and your price.
Which states have positive cash flow on rentals?
At 7.32% with 20% down, none of the 50 states and DC cash-flows on a median-priced home renting for the median 3-bedroom rent. Investors who cash-flow today usually buy below the median price, put more down, or house hack.
What is the cheapest state to buy a rental?
West Virginia has the lowest median home value at $170,800, with a median 3-bedroom rent of $1,023/mo (Census ACS 2024). Cheap is not the same as profitable, so compare cap rate and break-even price too.
Why does the state ranking differ from the city ranking?
Statewide medians average cities with rural and suburban areas, so the best cities (like Detroit or Cleveland) can sit inside states that rank in the middle. Use the state list to narrow down, then compare cities and listings.
Keep learning
Sources
Educational content, not financial advice. Loan programs and requirements change; confirm with a lender.