Updated 2026 · Based on median market data for Iowa City, IA
The median monthly rent in Iowa City, IA is $1,200, translating to $14,400 in annual gross rental income per unit. The rent-to-price ratio is 0.49% — well below the 1% rule, making pure cash flow investing challenging at median prices.
Renters in Iowa City spend approximately 30% of the local median household income ($48,600) on rent. This is within the healthy 25-30% range, indicating rent is affordable relative to local incomes. There may be room for moderate rent increases, especially for updated or well-located units.
The vacancy rate in Iowa City is 4.5%. This is extremely tight — expect strong tenant demand, quick lease-ups, and leverage to set favorable lease terms. In markets this tight, landlords often see multiple applications per listing. Population growth of 0.6% annually provides stable demand.
Iowa City's GRM (price divided by annual rent) is 17.0x. A GRM above 16x means the property is expensive relative to its income. Investors here are typically betting on appreciation rather than current cash flow. For comparison, the national average GRM for investment-grade rentals is approximately 13-15x.
At the median rent of $1,200/mo, a single-family rental in Iowa City generates approximately $14,400 in gross annual income. After accounting for 4.5% vacancy ($648 lost), property taxes of $3,626, insurance (~$980), and maintenance (~$980), the estimated NOI is $8,166 per year, or $681/mo.