US 2028 Rental Property Cap Rate
2028 cap rate ranges: top markets 4-5%, secondary 5-7%, tertiary 7-9%. Cash-on-cash 6-12% achievable with 25% down + 2028 mortgage rates ~6.5%.
| Annual NOI | — |
| Monthly mortgage | — |
| Annual cash flow | — |
| Cap rate | — |
| Cash-on-cash ROI | — |
2028 rental property metrics: Cap Rate = Annual NOI / Purchase Price (use for property comparison). Cash-on-Cash = Annual Cash Flow / Cash Invested (use for investor returns). 2028 ranges: top markets 4-5% cap, secondary 5-7%, tertiary 7-9%. Higher cap = more cash flow but typically older/lower-quality property.
Cap Rate vs Cash-on-Cash
Cap rate ignores financing — pure property quality measure. Cash-on-cash reflects YOUR returns after mortgage. Same property: 6% cap rate could mean -2% to +15% cash-on-cash depending on down payment + financing.
2028 Market Reality
Higher rates than 2020-21 = lower prices needed for same cash flow. Many properties bought at 3% rates now fail cash flow tests at 6.5%. Look for: (1) below-market rents (raise upon turnover), (2) value-add opportunities, (3) seller carry-back financing.
Beyond Cash Flow
Total return = cash flow + appreciation + mortgage paydown + tax benefits. Even low/negative cash flow deals can win on 3-5 year horizon with appreciation. 2028 trend: stable to modest appreciation in most markets vs sharp drops feared.
Last updated May 2026. Sources: BiggerPockets.