What is the cap rate in Boston, MA?

The median cap rate in Boston, MA is 2.7%. This is based on HUD Fair Market Rents and current home values.

Is Boston a good place to buy rental property?

Boston has a cap rate of 2.7% and estimated cash flow of -$2,317/month. Cash flow is challenging at current prices. Median home price is $819,538 with average 3BR rent of $3,805/month.

What is the average rent in Boston, MA?

The HUD Fair Market Rent for a 3-bedroom in Boston, MA is $3,805/month. This represents the estimated rent for standard-quality housing in the area.

Boston, MA — Rental Investment Analysis

🔴WEAK— appreciation play only

Data: HUD FMR FY2024 + Zillow ZHVI April 2026 + Freddie Mac rates. Last updated June 2026.

Investment Summary

As of 2026, Boston, MA has a 2.7% cap rate, indicating limited cash flow potential at current prices of $819,538 median.

Boston is primarily an appreciation play with limited cash flow potential. At $819,538 median home price, Boston requires significant capital. A 20% down payment alone is $163,907. With 3-bedroom rents around $3,805/month, the 2.7% cap rate tells the story. Cash flow is deeply negative at -$2,317/month with standard assumptions. This market requires appreciation to justify the investment.

At 0.44% on the 1% rule, rents are low relative to purchase prices. You'd need a significant discount from asking price to make the numbers work. DSCR of 0.42 is below 1.0, meaning rental income doesn't cover the mortgage. DSCR lenders will likely decline this market at current prices.

Bottom line: At current valuations, Boston doesn't make sense for rental investors focused on returns. Look at lower-cost markets unless you have specific local knowledge.

Data sources: HUD Fair Market Rents (FY2024), Zillow Home Value Index (April 2026), Freddie Mac Primary Mortgage Market Survey.

Cap Rate

2.7%

Below average

Monthly Cash Flow

-$2,317

After all expenses

Price-to-Rent

18.8

Overpriced for rent

DSCR

0.42

Fails

Key Metrics

Median Home Price: $819,538
Average Rent (3BR): $3,805/mo
Price-to-Rent Ratio: 18.8(high)
1% Rule: 0.44%(fails — need 1%+)
Cash-on-Cash Return: -16.2%
Vacancy Rate: 8.0%

Market Strength

Unemployment Rate: 4.7%(+0.4% vs national)
Rent Growth (YoY): +2.9%(national avg)
Population Growth: +0.6000000000000001% YoY

Assumptions Used

20% down, 6.52% rate, 30yr, 8% vacancy, 10% maintenance

Customize these numbers →

Property Tax Rate

1.15%

of assessed value (MA avg)

Median Income

$89,026

household (MA avg)

Rent-to-Income

51.3%

Stretched

Section 8 Max Rent

$3,805/mo

3BR voucher payment

MA Investor Climate

Landlord Friendly

4/10

State Income Tax

Has state tax

Property Tax

1.15% effective

Population Trend

+0.6000000000000001% (3yr)

Population Movement (Tax Year 2021→2022)

Net Migration

-9,452 households

SHRINKING

Total Inflow

318,651

households moved in

Avg Income (New Residents)

$149,398

per household

Where they're coming from:

1.Suffolk Non-migrants, MA291,613 households · avg $152,969

2.Middlesex, MA8,050 households · avg $123,811

3.Norfolk, MA4,227 households · avg $105,238

4.Essex, MA1,885 households · avg $95,222

5.Plymouth, MA1,119 households · avg $104,856

Where residents are leaving to:

1.Suffolk Non-migrants, MA291,613 households

2.Middlesex, MA10,277 households

3.Norfolk, MA6,241 households

4.Essex, MA2,962 households

5.Plymouth, MA2,031 households

Net outflow may indicate weakening demand — but can mean lower prices and higher cap rates.

Best Zip Codes in Boston for Investors

02114

Cap Rate: 5.0%Cash Flow: -$837/mo$748,337

02215

Cap Rate: 4.5%Cash Flow: -$1,132/mo$722,814

02135

Cap Rate: 4.0%Cash Flow: -$1,335/mo$678,720

All Zip Codes in Boston

Zip	Cap Rate	Cash Flow	Home Price	Rent (3BR)	DSCR
02114	5.0%	-$837	$748,337	$5,130/mo	0.79
02215	4.5%	-$1,132	$722,814	$4,560/mo	0.71
02135	4.0%	-$1,335	$678,720	$3,950/mo	0.63
02113	4.0%	-$1,451	$722,761	$4,170/mo	0.62
02109	3.6%	-$2,200	$950,712	$5,130/mo	0.57
02126	3.4%	-$1,534	$608,494	$3,130/mo	0.53
02111	3.0%	-$2,758	$978,718	$4,680/mo	0.47
02130	2.9%	-$2,349	$818,312	$3,860/mo	0.46
02122	2.8%	-$2,000	$673,928	$3,100/mo	0.44
02128	2.8%	-$1,984	$669,214	$3,080/mo	0.44
02127	2.8%	-$2,633	$868,855	$3,930/mo	0.43
02131	2.8%	-$2,203	$727,266	$3,290/mo	0.43
02121	2.7%	-$1,973	$644,434	$2,890/mo	0.42
02129	2.7%	-$3,136	$1,014,128	$4,510/mo	0.42
02119	2.6%	-$2,052	$656,147	$2,890/mo	0.41
02136	2.6%	-$2,058	$657,044	$2,890/mo	0.41
02125	2.6%	-$2,083	$660,738	$2,890/mo	0.41
02134	2.6%	-$2,723	$860,306	$3,750/mo	0.41
02124	2.4%	-$2,285	$695,650	$2,930/mo	0.38
02132	2.4%	-$2,727	$820,765	$3,420/mo	0.38
02115	2.1%	-$3,319	$934,176	$3,630/mo	0.33
02116	2.0%	-$4,988	$1,359,495	$5,090/mo	0.31
02120	1.9%	-$3,454	$932,330	$3,450/mo	0.30
02110	1.9%	-$5,351	$1,418,184	$5,130/mo	0.29
02210	1.6%	-$5,933	$1,504,651	$5,130/mo	0.26
02118	1.6%	-$3,838	$969,794	$3,290/mo	0.26
02108	1.2%	-$7,137	$1,644,267	$4,810/mo	0.18
02199	-0.3%	-$20,261	$3,630,669	$5,130/mo	-0.05