What is the cap rate in Sacramento, CA?

The median cap rate in Sacramento, CA is 4.1%. This is based on HUD Fair Market Rents and current home values.

Is Sacramento a good place to buy rental property?

Sacramento has a cap rate of 4.1% and estimated cash flow of -$863/month. Returns are moderate — consider the appreciation potential. Median home price is $468,099 with average 3BR rent of $2,685/month.

What is the average rent in Sacramento, CA?

The HUD Fair Market Rent for a 3-bedroom in Sacramento, CA is $2,685/month. This represents the estimated rent for standard-quality housing in the area.

Sacramento, CA — Rental Investment Analysis

🟡MODERATE— average returns

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

Investment Summary

As of 2026, rental properties in Sacramento, CA yield a 4.1% cap rate. Median home price is $468,099 with 3-bedroom rents at $2,685/month.

Sacramento is a moderate market — workable but not exceptional for cash flow. At $468,099 median home price, Sacramento requires significant capital. A 20% down payment alone is $93,619. With 3-bedroom rents around $2,685/month, the 4.1% cap rate tells the story. Cash flow is deeply negative at -$863/month with standard assumptions. This market requires appreciation to justify the investment.

At 0.59% 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 0.64 is below 1.0, meaning rental income doesn't cover the mortgage. DSCR lenders will likely decline this market at current prices.

Bottom line: Consider Sacramento only if you believe in long-term appreciation. The numbers don't support cash flow at today's prices and rates.

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

Cap Rate

4.1%

Below average

Monthly Cash Flow

-$863

After all expenses

Price-to-Rent

14.2

Investor-friendly

DSCR

0.64

Fails

Key Metrics

Median Home Price: $468,099
Average Rent (3BR): $2,685/mo
Price-to-Rent Ratio: 14.2(good)
1% Rule: 0.59%(fails — need 1%+)
Cash-on-Cash Return: -10.0%
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

Assumptions Used

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

Customize these numbers →

Property Tax Rate

0.71%

of assessed value (CA avg)

Median Income

$84,097

household (CA avg)

Rent-to-Income

38.3%

Stretched

Section 8 Max Rent

$2,685/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)

Population Movement (Tax Year 2021→2022)

Net Migration

-1,982 households

SHRINKING

Total Inflow

626,979

households moved in

Avg Income (New Residents)

$86,735

per household

Where they're coming from:

1.Sacramento Non-migrants, CA602,380 households · avg $86,920

2.Placer, CA3,414 households · avg $79,395

3.Alameda, CA1,961 households · avg $102,393

4.Santa Clara, CA1,852 households · avg $122,154

5.San Joaquin, CA1,724 households · avg $61,228

Where residents are leaving to:

1.Sacramento Non-migrants, CA602,380 households

2.Placer, CA4,975 households

3.El Dorado, CA1,805 households

4.San Joaquin, CA1,274 households

5.Los Angeles, CA1,225 households

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

Best Zip Codes in Sacramento for Investors

95715

Cap Rate: 7.5%Cash Flow: +$346/mo$363,550

95636

Cap Rate: 6.7%Cash Flow: +$79/mo$330,185

95832

Cap Rate: 5.8%Cash Flow: -$189/mo$422,263

All Zip Codes in Sacramento

Zip	Cap Rate	Cash Flow	Home Price	Rent (3BR)	DSCR
95715	7.5%	+$346	$363,550	$3,410/mo	1.18
95636	6.7%	+$79	$330,185	$2,810/mo	1.04
95832	5.8%	-$189	$422,263	$3,240/mo	0.92
95833	5.0%	-$510	$458,931	$3,150/mo	0.79
95660	4.9%	-$478	$387,341	$2,600/mo	0.77
95825	4.9%	-$511	$404,387	$2,700/mo	0.76
95835	4.8%	-$768	$575,163	$3,790/mo	0.75
95815	4.6%	-$519	$356,921	$2,300/mo	0.73
95820	4.5%	-$656	$405,120	$2,530/mo	0.70
95842	4.4%	-$698	$423,642	$2,630/mo	0.69
95824	4.3%	-$640	$367,513	$2,240/mo	0.67
95838	4.3%	-$705	$397,794	$2,410/mo	0.67
95822	4.2%	-$784	$437,546	$2,640/mo	0.66
95829	4.1%	-$1,128	$595,664	$3,520/mo	0.64
95841	4.1%	-$825	$433,902	$2,560/mo	0.64
95828	4.1%	-$884	$456,125	$2,670/mo	0.64
95823	4.0%	-$843	$428,015	$2,490/mo	0.63
95834	3.9%	-$1,117	$528,370	$2,980/mo	0.60
95817	3.5%	-$1,158	$477,268	$2,510/mo	0.54
95811	3.3%	-$1,539	$599,541	$3,050/mo	0.52
95821	3.3%	-$1,301	$498,472	$2,510/mo	0.51
95831	3.3%	-$1,661	$635,892	$3,200/mo	0.51
95814	3.0%	-$1,539	$549,627	$2,640/mo	0.47
95816	2.9%	-$2,089	$719,976	$3,370/mo	0.45
95819	2.8%	-$2,268	$758,709	$3,470/mo	0.44
95818	2.5%	-$2,356	$718,277	$3,030/mo	0.38
95864	2.3%	-$2,544	$752,328	$3,080/mo	0.36
95830	1.7%	-$3,996	$1,026,160	$3,560/mo	0.27
95837	0.8%	-$4,662	$1,005,785	$2,580/mo	0.13
95837	0.8%	-$4,662	$1,005,785	$2,580/mo	0.13