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Cap Rate Analysis: Fargo, ND

Investment metrics, interactive calculators, and data-driven analysis for Fargo rental properties.

Challenging for pure cash flow
Based on $245,000 median price and $1,200/mo median rent
Est. Cap Rate
3.80%
1% Rule
0.49%
Fails
GRM
17.0x
Price / Income
4.5x

Market Data

Median Home Price$245,000
Median Monthly Rent$1,200
Property Tax Rate0.98%
Population132,000
Population Growth1.5% / yr
Median Household Income$54,800
Vacancy Rate5%
Annual Appreciation2.5%

Cap Rate Calculator — Fargo

Pre-filled with Fargo medians. Adjust to match a specific property.

Property Details
$
$
3–8% typical
%
Monthly Expenses
0.98% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
3.14%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$7,704
net operating income
Gross Rent Multiplier
17.0x
High (>15)
1% Rule
0.49%
✗ Fails
Monthly Cash Flow
$642
before debt service
Annual Breakdown
Gross Rental Income$14,400
Less Vacancy−$720
Effective Income$13,680
Less Operating Expenses−$5,976
Net Operating Income$7,704

Cash-on-Cash Return — Fargo

Factor in financing to see your actual return on invested capital in Fargo.

$
$61,250
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-8.78%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$68,600
$61,250 down + $7,350 closing
Monthly Mortgage
$1,198
on $184K loan
Monthly Cash Flow
$-502
after all expenses
Annual Cash Flow
$-6,023
before taxes
Cash Flow Breakdown
Monthly Rent$1,200
Less Expenses−$504
Less Mortgage−$1,198
Monthly Cash Flow$-502

Is Fargo a Good Place to Invest in Rental Property?

Fargo, ND has a population of 132,000 and has been growing at 1.5% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $245,000 paired with median rents of $1,200/mo produces an estimated cap rate of 3.80%.

Property taxes at 0.98% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 5% is moderate and within normal parameters for a healthy rental market.

At a price-to-income ratio of 4.5x, homes cost about 4.5 times the local median income of $54,800. This relatively affordable ratio suggests a deep pool of renters who find buying out of reach, supporting rental demand. Home values have appreciated at roughly 2.5% 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, Fargo 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.

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