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Cap Rate Analysis: Laredo, TX

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

Moderate — source deals carefully
Based on $175,000 median price and $1,020/mo median rent
Est. Cap Rate
4.05%
1% Rule
0.58%
Fails
GRM
14.3x
Price / Income
4.1x

Market Data

Median Home Price$175,000
Median Monthly Rent$1,020
Property Tax Rate1.7%
Population261,776
Population Growth1% / yr
Median Household Income$42,500
Vacancy Rate6.3%
Annual Appreciation2.1%

Cap Rate Calculator — Laredo

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

Property Details
$
$
3–8% typical
%
Monthly Expenses
1.7% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
3.19%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$5,589
net operating income
Gross Rent Multiplier
14.3x
Good (<15)
1% Rule
0.58%
✗ Fails
Monthly Cash Flow
$466
before debt service
Annual Breakdown
Gross Rental Income$12,240
Less Vacancy−$771
Effective Income$11,469
Less Operating Expenses−$5,880
Net Operating Income$5,589

Cash-on-Cash Return — Laredo

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

$
$43,750
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-6.46%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$49,000
$43,750 down + $5,250 closing
Monthly Mortgage
$856
on $131K loan
Monthly Cash Flow
$-264
after all expenses
Annual Cash Flow
$-3,164
before taxes
Cash Flow Breakdown
Monthly Rent$1,020
Less Expenses−$428
Less Mortgage−$856
Monthly Cash Flow$-264

Is Laredo a Good Place to Invest in Rental Property?

Laredo, TX has a population of 261,776 and has been growing at 1% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $175,000 paired with median rents of $1,020/mo produces an estimated cap rate of 4.05%.

Property taxes at 1.7% are notably high and represent a significant drag on cash flow — model this expense carefully, as it can make or break a deal. The vacancy rate of 6.3% is moderate and within normal parameters for a healthy rental market.

At a price-to-income ratio of 4.1x, homes cost about 4.1 times the local median income of $42,500. 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 2.1% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.

Bottom line: Laredo presents moderate opportunities. Cap rates near 4.05% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.

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