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Cap Rate Analysis: Providence, RI

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

Challenging for pure cash flow
Based on $330,000 median price and $1,580/mo median rent
Est. Cap Rate
3.23%
1% Rule
0.48%
Fails
GRM
17.4x
Price / Income
6.8x

Market Data

Median Home Price$330,000
Median Monthly Rent$1,580
Property Tax Rate1.42%
Population190,934
Population Growth0.2% / yr
Median Household Income$48,200
Vacancy Rate5.2%
Annual Appreciation2.8%

Cap Rate Calculator — Providence

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

Property Details
$
$
3–8% typical
%
Monthly Expenses
1.42% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
2.59%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$8,554
net operating income
Gross Rent Multiplier
17.4x
High (>15)
1% Rule
0.48%
✗ Fails
Monthly Cash Flow
$713
before debt service
Annual Breakdown
Gross Rental Income$18,960
Less Vacancy−$986
Effective Income$17,974
Less Operating Expenses−$9,420
Net Operating Income$8,554

Cash-on-Cash Return — Providence

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

$
$82,500
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-9.06%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$92,400
$82,500 down + $9,900 closing
Monthly Mortgage
$1,614
on $248K loan
Monthly Cash Flow
$-698
after all expenses
Annual Cash Flow
$-8,370
before taxes
Cash Flow Breakdown
Monthly Rent$1,580
Less Expenses−$664
Less Mortgage−$1,614
Monthly Cash Flow$-698

Is Providence a Good Place to Invest in Rental Property?

Providence, RI has a population of 190,934 and has been growing at 0.2% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $330,000 paired with median rents of $1,580/mo produces an estimated cap rate of 3.23%.

Property taxes at 1.42% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 5.2% is moderate and within normal parameters for a healthy rental market.

At a price-to-income ratio of 6.8x, homes cost about 6.8 times the local median income of $48,200. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. Home values have appreciated at roughly 2.8% 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, Providence 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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