What if the biggest mistake rental investors make happens before they even run the numbers?
The National Association of Realtors says most new investors miss costs. About 72% forget $3,000 to $8,000 in yearly expenses. Many focus only on price and rent. They forget that property taxes range from 0.27% in Hawaii to 2.23% in New Jersey. That gap creates a $5,880 difference on a $300,000 home.
Common mistakes new investors make:
- Figuring gross yield without adding vacancy costs.
- Ignoring how state income tax cuts rental profit.
- Missing the 27.5-year write-off, worth thousands each year.
- Picking costly markets when some Midwest cities offer 9.8% yields.
This guide gives you the numbers to figure your real returns. It covers property tax rates for all 50 states and current mortgage rates for rental homes. It also explains federal tax benefits like the write-off rules. We profile the top 10 states for investors.
For basic buying steps, review our first time home buyer guide before you focus on investing.
Quick test: Can you name the nine states with zero income tax on rental profits? If not, you may be leaving thousands on the table, so keep reading.
Property Tax Rates for All 50 States
Property taxes are often the largest ongoing cost for a rental buyer. Rates vary greatly across the country. Rental homes do not get the homestead breaks that owner homes receive.
50-State Property Tax List
The table below ranks every state from the lowest to highest effective tax rate.
| Rank | State | Effective Rate | Annual Tax on $300K |
|---|---|---|---|
| 1 | Hawaii | 0.27% | $810 |
| 2 | Alabama | 0.38% | $1,140 |
| 3 | Nevada | 0.49% | $1,470 |
| 3 | Colorado | 0.49% | $1,470 |
| 5 | South Carolina | 0.51% | $1,530 |
| 6 | Arizona | 0.52% | $1,560 |
| 7 | Delaware | 0.53% | $1,590 |
| 7 | Idaho | 0.53% | $1,590 |
| 7 | Utah | 0.53% | $1,590 |
| 10 | West Virginia | 0.54% | $1,620 |
| 11 | Tennessee | 0.55% | $1,650 |
| 11 | Louisiana | 0.55% | $1,650 |
| 13 | Arkansas | 0.57% | $1,710 |
| 14 | Wyoming | 0.58% | $1,740 |
| 15 | North Carolina | 0.70% | $2,100 |
| 16 | California | 0.71% | $2,130 |
| 17 | New Mexico | 0.72% | $2,160 |
| 18 | Indiana | 0.74% | $2,220 |
| 18 | Mississippi | 0.74% | $2,220 |
| 18 | Virginia | 0.74% | $2,220 |
| 21 | Montana | 0.75% | $2,250 |
| 22 | Kentucky | 0.77% | $2,310 |
| 23 | Florida | 0.79% | $2,370 |
| 24 | Georgia | 0.81% | $2,430 |
| 25 | Oklahoma | 0.82% | $2,460 |
| 26 | Oregon | 0.83% | $2,490 |
| 27 | Washington | 0.84% | $2,520 |
| 28 | Missouri | 0.88% | $2,640 |
| 29 | North Dakota | 0.99% | $2,970 |
| 30 | Maryland | 1.00% | $3,000 |
| 31 | Minnesota | 1.04% | $3,120 |
| 32 | South Dakota | 1.09% | $3,270 |
| 33 | Maine | 1.10% | $3,300 |
| 34 | Massachusetts | 1.11% | $3,330 |
| 35 | Alaska | 1.14% | $3,420 |
| 36 | Michigan | 1.28% | $3,840 |
| 37 | Kansas | 1.30% | $3,900 |
| 38 | Rhode Island | 1.32% | $3,960 |
| 39 | Pennsylvania | 1.35% | $4,050 |
| 40 | Ohio | 1.36% | $4,080 |
| 41 | Iowa | 1.43% | $4,290 |
| 42 | Nebraska | 1.50% | $4,500 |
| 43 | Wisconsin | 1.51% | $4,530 |
| 44 | Texas | 1.58% | $4,740 |
| 45 | New York | 1.60% | $4,800 |
| 46 | Vermont | 1.71% | $5,130 |
| 47 | New Hampshire | 1.77% | $5,310 |
| 48 | Connecticut | 1.92% | $5,760 |
| 49 | Illinois | 2.07% | $6,210 |
| 50 | New Jersey | 2.23% | $6,690 |
Extra Costs for Buyers
Some states charge higher rates for rentals or remove tax breaks.
South Carolina uses a 6% rate for rentals versus 4% for owner homes. This leads to 50% higher taxes on rentals.
Texas has a $100,000 homestead break for schools, but rental homes cannot use it. Marcus, a Houston buyer, found this added $2,500 to his yearly costs.
Florida removes the $50,000 homestead break for rentals. Michigan removes the Main Home Break, adding more to your tax rate.
Top 10 States for Rental Buyers
These states rank highest due to high rental yields, landlord-friendly laws, low taxes, and people moving in.
1. Texas
| Metric | Value |
|---|---|
| Home Price | $309,450 |
| Rent | $1,445-$1,894 |
| Gross Yield | 5.6-7.3% |
| Property Tax Rate | 1.60% |
| State Income Tax | None |
| Eviction Notice | 3 days |
Texas grew fast in 2024, adding 562,941 new residents. Online eviction filings let landlords manage cases from anywhere. This makes it easier to handle disputes.
Top markets: Dallas-Fort Worth, Houston, San Antonio, Austin suburbs, Arlington.
Sarah, a buyer from CA, bought a $280,000 rental home in Arlington. The 3-day eviction notice and zero state income tax raised her after-tax cash flow by $4,200 a year compared to Los Angeles.
2. Florida
| Metric | Value |
|---|---|
| Home Price | $411,414 |
| Rent | $1,600-$1,900 |
| Gross Yield | 5.5-6.5% |
| Property Tax Rate | 0.79% |
| State Income Tax | None |
| Eviction Notice | 3 work days |
Florida had the highest growth at 2.04% in 2024. State law bans rent control. There are no limits on security deposits.
Top markets: Jacksonville, Tampa Bay, Orlando, Cape Coral, St. Petersburg.
3. Indiana
| Metric | Value |
|---|---|
| Home Price | $237,298 |
| Rent | $1,316 |
| Gross Yield | 5.6-6.3% |
| Property Tax Rate | 0.74% |
| State Income Tax | 3.0% (flat) |
| Eviction Notice | 10 days |
Mashvisor ranks Indiana first for long-term rental returns. A price-to-rent ratio around 14 is good for investors. However, hitting the strict 1% rule is hard in most areas.
Top markets: Fort Wayne (6.28% return), Indianapolis (5.42% return), Bloomington, Fishers.
4. Ohio
| Metric | Value |
|---|---|
| Home Price | $219,076 |
| Rent | $1,300-$1,500 |
| Gross Yield | 7.0-9.8% |
| Property Tax Rate | 1.36% |
| State Income Tax | 2.75% flat (2026) |
| Eviction Notice | 3 days |
Cleveland offers 9.8% rental yield with home prices around $110,000. The 1% rule works in many Ohio markets.
Top markets: Cleveland, Cincinnati, Columbus, Dayton, Toledo.
David, a remote investor from Seattle, bought a $95,000 duplex in Cleveland with $1,850 in monthly rent. His 23% cash-on-cash return greatly beat his Seattle portfolio.
5. Georgia
| Metric | Value |
|---|---|
| Home Price | $339,764 |
| Rent | $1,500-$1,800 |
| Gross Yield | 5.0-6.5% |
| Property Tax Rate | 0.81% |
| State Income Tax | 5.19% flat |
| Eviction Notice | 3 days |
Georgia allows zero-day notice for lease breaks. This gives landlords fast fixes for problem tenants.
Top markets: Atlanta Metro, Savannah, Augusta, Columbus, Macon.
6. Tennessee
| Metric | Value |
|---|---|
| Home Price | $309,450 |
| Rent | $1,524 |
| Gross Yield | 4.2-5.5% |
| Property Tax Rate | 0.55% |
| State Income Tax | None |
| Eviction Notice | 14 days |
Empty rates are near 4%. Tennessee has zero state income tax. It also has one of the lowest property tax rates in the country.
Top markets: Memphis (4.80% return, $1,350/month rent), Nashville suburbs, Chattanooga, Knoxville.
7. Alabama
| Metric | Value |
|---|---|
| Home Price | $195,100 |
| Rent | $1,312 |
| Gross Yield | 4.7-13.6% |
| Property Tax Rate | 0.38% (second lowest) |
| State Income Tax | 5.0% |
| Eviction Notice | 7 days |
Birmingham projects 13.6% returns, among the highest in the country. Huntsville's tech boom makes it a top growth city.
Top markets: Birmingham, Huntsville, Montgomery, Mobile, Dothan.
8. North Carolina
| Metric | Value |
|---|---|
| Home Price | $325,000-$375,000 |
| Rent | $1,551 |
| Gross Yield | 5.0-6.5% |
| Property Tax Rate | 0.70% |
| State Income Tax | 3.99% flat |
| Eviction Notice | 0-10 days |
North Carolina drew 82,288 net movers in 2024, ranking second in the country. The Raleigh-Durham area hosts more than 4,000 tech firms.
Top markets: Charlotte, Raleigh-Durham, Greensboro, Wilmington, Asheville suburbs.
9. Arizona
| Metric | Value |
|---|---|
| Home Price | $425,000-$450,000 |
| Rent | $1,500-$1,800 |
| Gross Yield | 5.0-6.0% |
| Property Tax Rate | 0.52% |
| State Income Tax | 2.50% flat (lowest) |
| Eviction Notice | 5 days |
Arizona dropped the sales tax on long-term rentals in January 2025. Tenants cannot hold back rent.
Top markets: Phoenix Metro, Tucson, Mesa, Scottsdale, Tempe.
10. Missouri
| Metric | Value |
|---|---|
| Home Price | $258,000-$280,000 |
| Rent | $1,326 |
| Gross Yield | 5.5-7.5% |
| Property Tax Rate | 0.88% |
| State Income Tax | 4.70% |
| Eviction Notice | Immediate-10 days |
Missouri has no capital gains tax. It has the fifth-lowest cost of living in the country. Strong rent-to-price ratios support quick cash flow.
Top markets: Kansas City, St. Louis, Springfield, Columbia.
Current Mortgage Rates for Rental Homes
Rates dropped in late 2025 and briefly fell below 6% for primary homes. Rental homes carry a 0.50-1.00% higher rate than primary homes. For more mortgage tips, see our home buying tips with 53 strategies.
Rate Summary (January 2026)
| Loan Type | Primary Residence | Investment Property |
|---|---|---|
| 30-Year Fixed | 6.06-6.11% | 6.56-7.11% |
| 15-Year Fixed | 5.38-5.45% | 5.88-6.45% |
| 5/1 ARM | 5.50% | 6.00-6.50% |
| 7/1 ARM | 5.60-5.80% | 6.10-6.80% |
| Jumbo | 6.40% | 6.90-7.40% |
Rental Home Loan Rules
| Need | Standard | Notes |
|---|---|---|
| Lowest Down Payment (Single-Family) | 15-25% | 25% for best rates |
| Lowest Down Payment (2-4 Units) | 20-25% | Some lenders need 25-30% |
| Lowest Credit Score | 620-680 | 740+ for best rates |
| Debt-to-Income Ratio | 36-45% | Up to 50% with good factors |
| Cash Reserves | 2-8 months PITI | Per funded home |
| Max Financed Homes | 10 | Fannie Mae/Freddie Mac limit |
Your credit score for rentals and rental homes follow similar rules. Higher scores unlock better rates and terms.
DSCR Loans for Rental Buyers
DSCR (Debt Service Coverage Ratio) loans look at property income, not personal income. They work well for buyers with many homes or self-employed income.
| DSCR Scenario | Rate Range |
|---|---|
| Strong DSCR (1.25+), 760+ credit | 6.12-6.62% |
| Standard DSCR (1.0+), 720+ credit | 6.25-7.25% |
| Lower DSCR (0.75-0.99) | 7.50-8.50% |
Key requirements:
- Lowest DSCR of 1.0 (some lenders take 0.75).
- 20-25% down payment.
- 620+ credit score.
- No limit on funded homes.
- Can close in an LLC name.
Lisa, self-employed in Denver, did not qualify for a normal loan. Tax write-offs had lowered her reported income. A DSCR loan at 6.75% let her buy a $340,000 rental in Indy with 25% down. The $2,400 monthly rent covered the $1,890 PITI payment (principal, interest, taxes, and insurance).
Closing Costs by State
Average closing costs are $4,661, or 1.06% of the price. Costs range from 0.46% in South Dakota to 2.99% in Delaware.
States with Lowest Closing Costs
| State | Closing Cost | % of Price |
|---|---|---|
| South Dakota | $1,551 | 0.46% |
| Iowa | $1,640 | 0.64% |
| Missouri | $1,740 | 0.60% |
| Indiana | $1,810 | 0.70% |
| North Dakota | $2,243 | 0.69% |
| Nebraska | $2,344 | 0.74% |
| North Carolina | $2,480 | 0.56% |
| Alabama | $2,791 | 0.89% |
States with Highest Closing Costs
| State | Closing Cost | % of Price |
|---|---|---|
| Washington, D.C. | $17,545 | 2.39% |
| New York | $13,738 | 2.47% |
| Delaware | $12,157 | 2.99% |
| Maryland | $9,218 | 2.03% |
| Vermont | $8,597 | 2.20% |
| Florida | $8,492 | 1.82% |
| Pennsylvania | $8,259 | 2.36% |
Closing Cost Breakdown
| Fee Category | Typical Range |
|---|---|
| Loan Start Fee | 0-1% of loan |
| Appraisal | $300-$1,000 |
| Home Inspection | $300-$500 |
| Title Search | $300-$600 |
| Lender's Title Insurance | $300-$1,500 |
| Owner's Title Insurance | $1,000-$2,500 |
| Escrow/Closing Fee | $350-$1,000 |
| Filing Fees | $20-$250 |
| Property Survey | $400-$800 |
| Lawyer Fees (where needed) | $400-$2,000 |
States with No Transfer Tax
These 13 states charge no real estate transfer tax: Alaska, Idaho, Indiana, Kansas, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Dakota, Oregon, Texas, Utah, and Wyoming.
Federal Tax Perks for Rentals
The federal tax code offers major benefits for rental buyers. These include write-offs and 1031 exchange deferrals.
Write-off Rules
You can deduct the cost of the building from your taxes over 27.5 years. This is called depreciation. It lowers your taxable income each year.
| Part | Time Period | Method |
|---|---|---|
| Rental Building | 27.5 years | Straight-line |
| Appliances/Carpet | 5 years | Faster |
| Furniture/Gear | 7 years | Faster |
| Land Work | 15 years | Faster |
Land cannot be written off. You must split the price between land and building. Use tax assessor values or an appraisal to find the numbers.
Emily bought a $250,000 rental home. The land was worth $50,000, so the building was worth $200,000. She can deduct $7,273 each year ($200,000 ÷ 27.5). At a 24% tax bracket, this saves her $1,746 a year in taxes.
Passive Loss Rules
Rental income is passive by default. The $25,000 rule lets you deduct rental losses from regular income if you meet these tests:
- Take part actively (approve tenants, set terms, approve repairs).
- Own at least 10% of the property.
- Have income below $100,000 (phases out fully at $150,000).
Real Estate Pro Status turns rental income into active income. This allows you to deduct all losses. You must spend 750+ hours on real property work and more than 50% of your total work time in real estate.
QBI Tax Deduction
The QBI deduction gives a 20% deduction on rental income. The safe harbor needs 250+ hours of rental work each year with time logs.
Capital Gains Tax
| Gain Type | Tax Rate |
|---|---|
| Short-term (held 1 year or less) | Regular income (10-37%) |
| Long-term (held over 1 year) | 0%, 15%, or 20% |
| Write-off Clawback | 25% (Section 1250) |
| Net Investment Income Tax | +3.8% if above thresholds |
Max federal rate on sale: 20% plus 3.8% NIIT equals 23.8% on gain, plus 25% on write-off recapture.
1031 Exchange Rules
Defer capital gains and write-off recapture by swapping for similar rental homes.
Key timelines:
- 45-day ID period: Name the new homes in writing within 45 days.
- 180-day exchange period: Close on the new home within 180 days.
- Need a middleman: You cannot touch the funds yourself.
Marcus sold a $400,000 rental in CA with $150,000 in gains. Using a 1031 exchange, he bought two homes in Texas totaling $450,000. He deferred about $42,000 in federal and state taxes.
State Tax on Rental Profits
States with No Tax
These 9 states have zero income tax on rental profits:
| State | Notes |
|---|---|
| Alaska | No income tax |
| Florida | State law bans income tax |
| Nevada | No income tax |
| New Hampshire | Fully tax-free as of January 2025 |
| South Dakota | No income tax |
| Tennessee | No income tax |
| Texas | State law bans income tax |
| Washington | No income tax on wages (capital gains tax excludes real estate) |
| Wyoming | No income or corporate tax |
Key point: The state where the home sits sets the state tax bill, not where you live. A CA resident with Texas rentals pays no state tax on that rental income.
Flat Tax States (Lowest Rates)
| State | Rate (2025/26) |
|---|---|
| Arizona | 2.50% (lowest) |
| Pennsylvania | 3.07% |
| Indiana | 3.00% |
| Louisiana | 3.00% |
| Iowa | 3.80% |
| Kentucky | 3.50% |
| Michigan | 4.25% |
| North Carolina | 3.99% |
Highest State Tax Rates
| State | Top Rate | Threshold |
|---|---|---|
| California | 13.3% | Over $1,000,000 |
| Hawaii | 11.0% | Over $325,000 |
| New York | 10.9% | Over $25,000,000 |
| New Jersey | 10.75% | Over $1,000,000 |
| Oregon | 9.9% | Over $125,000 |
Rental Yield by Market
Key Numbers (2026)
| Metric | Value |
|---|---|
| Average Gross Yield | 6.56% |
| Median Single-Family Rent | $2,357/month |
| Home Price | $410,800 |
| Average Price-to-Rent Ratio | 14.3 |
| Rental Empty Rate | 7.0% |
Best Yield Markets
| Rank | City | State | Price | Rent | Gross Yield |
|---|---|---|---|---|---|
| 1 | Cleveland | OH | $187,413 | $1,530 | 9.8% |
| 2 | Birmingham | AL | $150,000 | $1,200 | 9.6% |
| 3 | Toledo | OH | $130,000 | $950 | 8.8% |
| 4 | Fort Wayne | IN | $159,900 | $1,018 | 7.6% |
| 5 | Pittsburgh | PA | $200,000 | $1,300 | 7.8% |
| 6 | Memphis | TN | $210,000 | $1,350 | 7.7% |
| 7 | Indianapolis | IN | $225,000 | $1,400 | 7.5% |
| 8 | Kansas City | MO | $250,000 | $1,500 | 7.2% |
| 9 | Cincinnati | OH | $230,000 | $1,400 | 7.3% |
Price-to-Rent Ratio Guide
| Ratio | What It Means |
|---|---|
| Under 12 | Strong cash flow (Cleveland, Pittsburgh, Detroit) |
| 12-15 | Good for buyers |
| 16-20 | Balanced |
| 21-30 | Growth-focused |
| Over 30 | Poor for cash flow (San Jose 45, San Francisco 36) |
Landlord-Renter Laws by State
Eviction Times (Fastest States)
| State | No Pay Notice | Total Time |
|---|---|---|
| Texas | 3 days | 21-30 days |
| Georgia | 3 days | 14-30 days |
| Arizona | 5 days | 21-35 days |
| Virginia | 5 days | 15-30 days |
| Florida | 3 work days | 21-30 days |
| Alabama | 7 days | 21-42 days |
| North Carolina | 0-10 days | 14-21 days |
| Ohio | 3 days | 21-45 days |
Eviction Times (Slowest States)
| State | Time |
|---|---|
| New York | 3-12+ months |
| California | 6-12 weeks |
| New Jersey | 2-6 months |
| Oregon | 2-4 months |
| Massachusetts | 2-4 months |
Deposit Limits
No limit (24 states): AL, AR, FL, GA, IL, IN, KY, LA, MS, MO, MT, NE, OH, OK, SC, SD, TN, TX, WV, WI, WY.
1 month limit: CA, DC, HI, KS (bare), MA, NY, PA, RI.
Rent Control Status
Rent control BANNED (34+ states): AL, AK, AZ, AR, CO, FL, GA, ID, IL, IN, IA, KS, KY, LA, MI, MS, MO, MT, NE, NV, NM, NC, ND, OH, OK, SC, SD, TN, TX, UT, VA, WV, WI, WY.
Running Cost Benchmarks
Manager Fees
| Fee Type | Range | Average |
|---|---|---|
| Monthly Fee | 8-12% of rent | 10% |
| Flat Fee | $100-$300/month | $300/month |
| Renter Placement | 50-100% of first month rent | 75% |
| Lease Renewal | $100-$500 | $200 |
Upkeep Reserves
| Method | Reserve Amount |
|---|---|
| 1% Rule | 1% of home value per year |
| 10% Rule | 10% of monthly gross rent |
| 50% Rule | 50% of rent covers ALL expenses |
Running Cost Ratio
| Type | Running Cost Ratio |
|---|---|
| Single-Family Rental | 35-50% |
| Small Multi-unit | 35-50% |
| Short-term Rental | 70-80% |
Sample budget for $2,000/month rent:
- Manager (10%): $200
- Empty time (8%): $160
- Repairs (10%): $200
- Big repairs reserve (10%): $200
- Insurance: $150
- Total before mortgage: ~$910 (45% of rent)
Return Metrics for Rental Buyers
Cash-on-Cash Return
Formula: Cash Flow ÷ Total Cash Invested × 100
| Return Range | What It Means |
|---|---|
| 5-7% | Big city areas (stable, lower yield) |
| 8-12% | Typical goal |
| 10-15% | Smaller and growing markets |
Cap Rate
Formula: Net Income ÷ Home Value × 100
| Cap Rate | What It Means |
|---|---|
| Under 5% | Top tier, low-risk (Class A, big cities) |
| 5-7% | Typical stable assets |
| 7-10% | Value-add, smaller markets |
| Over 10% | High risk, distressed |
The 1% Rule
What it means: Monthly rent should equal or beat 1% of the price.
2026 truth: The 1% rule is hard to reach in most markets. Many buyers accept 0.8-1.5% rent-to-price ratios.
Where 1% rule works: Cleveland, Indianapolis, Memphis, Birmingham, Kansas City, and other Midwest markets.
DSCR (Debt Service Coverage Ratio)
How to figure: Net income (NOI) ÷ yearly debt payment (PITI)
| DSCR | What It Means |
|---|---|
| Under 1.0 | Losing money (high risk) |
| 1.0 | Break-even |
| 1.20-1.25 | Lowest lender rule |
| 1.25-1.40 | Preferred range |
| Over 1.50 | Strong cushion |
Home Checks for Rental Homes
Before you buy a rental home, schedule a full home inspection checklist with 156 items. This helps you spot problems early. Use our what to look for when buying a house guide to review each home step by step. Use a property rating system to check value, state, and future worth before making an offer.
Rental homes need extra checks in these areas:
- Delayed fixes - Past landlords may have put off repairs.
- Tenant damage - Look beyond surface issues.
- Code rules - Rental homes face checks.
- Aging systems - HVAC, plumbing, or wiring near end of life.
- Foundation issues - Costly repairs that can hurt cash flow.
Walk through the full home before closing on any rental.
Quick Reference Summary
| Category | Key Metric | Value |
|---|---|---|
| Mortgage Rates | 30-Year Investment Property | 6.56-7.11% |
| DSCR Loans | 6.12-7.25% | |
| Minimum Down Payment | 15-25% | |
| Property Taxes | Lowest State | Hawaii (0.27%) |
| Highest State | New Jersey (2.23%) | |
| State Income Tax | Zero-Tax States | 9 states |
| Lowest Flat Rate | Arizona (2.50%) | |
| Rental Yields | National Average | 6.56% |
| Highest-Yield City | Cleveland (9.8%) | |
| Running Costs | Manager Fee | 8-12% of rent |
| Running Cost Ratio | 35-50% | |
| Federal Taxes | Write-off Period | 27.5 years |
| Long-Term Capital Gains | 0/15/20% | |
| QBI Deduction | 20% | |
| Return Targets | Cash-on-Cash | 8-12% |
| Cap Rate (SFR) | 7.1% average | |
| DSCR Minimum | 1.20-1.25 | |
| Evictions | Fastest States | TX, GA, AZ, FL (3-7 days notice) |
Key Takeaways
- Property taxes vary by $5,880 a year between the lowest state (Hawaii at 0.27%) and highest (New Jersey at 2.23%) on a $300,000 home.
- 9 states charge zero income tax on rental profits: Texas, Florida, Tennessee, Nevada, Wyoming, South Dakota, Alaska, Washington, and New Hampshire.
- Cleveland offers 9.8% gross yields, nearly double the 6.56% national average.
- Write-offs save thousands each year. A $200,000 building creates $7,273 in deductions yearly.
- DSCR loans expand loan options for investors who cannot qualify through standard income papers.
- 1031 exchanges defer all capital gains when you reinvest into similar homes within 180 days.
Next Steps
Talk to a HUD-approved housing counselor for personal help. Find one at HUD's Housing Counseling portal.
For tax questions, consult a CPA who knows rental property tax rules. The IRS gives detailed help in Publication 527: Rental Property.
Check current mortgage rates at Freddie Mac's Mortgage Report.
Explore our related guide:
Data sources: Tax Foundation, Freddie Mac PMMS, CBRE Cap Rate Report H1 2025, Census Bureau Housing Vacancy Report, IRS Publications 527/925/946, Bankrate, Global Property Guide, LodeStar 2025 Closing Cost Report. All figures reflect January 2026 data.