Middletown, CA — Rental Investment Analysis
🟢STRONG— excellent cash flow marketData: HUD FMR FY2024 + Zillow ZHVI April 2026 + Freddie Mac rates. Last updated June 2026.
Investment Summary
As of 2026, Middletown, CA has a median cap rate of 9.0%, making it one of the top cash-flowing rental markets in the United States.
Middletown is one of the strongest cash flow markets in the data. Median home price sits at $320,303 — moderate by national standards, requiring a solid down payment but not out of reach. With 3-bedroom rents around $3,500/month, the 9.0% cap rate tells the story. A typical rental here cash flows +$711/month after all expenses — strong passive income from day one.
The market passes the 1% rule (1.09%), which is increasingly rare and signals strong rent-to-price fundamentals. DSCR of 1.42 means the property's income comfortably covers debt service — DSCR loans should be easy to qualify for here.
Bottom line: Buy here if you want reliable monthly income. Middletown is a cash flow market — don't expect rapid appreciation, but the checks come in every month.
Data sources: HUD Fair Market Rents (FY2024), Zillow Home Value Index (April 2026), Freddie Mac Primary Mortgage Market Survey.
Cap Rate
9.0%
Above average
Monthly Cash Flow
+$711
After all expenses
Price-to-Rent
7.6
Investor-friendly
DSCR
1.42
Passes lender test
Key Metrics
- Median Home Price
- $320,303
- Average Rent (3BR)
- $3,500/mo
- Price-to-Rent Ratio
- 7.6(good)
- 1% Rule
- 1.09%(passes)
- Cash-on-Cash Return
- 11.6%
- Vacancy Rate
- 8.0%
Market Strength
- Unemployment Rate
- 5.3%(+1% vs national)
- Rent Growth (YoY)
- +2.9%(national avg)
- Population Growth
- -1.2% YoY
Property Tax Rate
0.71%
of assessed value (CA avg)
Median Income
$84,097
household (CA avg)
Rent-to-Income
49.9%
Stretched
Section 8 Max Rent
$3,500/mo
3BR voucher payment
CA Investor Climate
Landlord Friendly
3/10
State Income Tax
Has state tax
Property Tax
0.71% effective
Population Trend
-1.2% (3yr)