Cap rates 4.0–4.8% · Median price $480,000 · Median rent $2,000/mo · Population 520K
Sacramento is California's most affordable major market and state capital, with stable government employment and growing tech spillover from the Bay Area. Better yields than SF/LA with some California protections still in place.
Here's what the numbers look like on a typical Sacramento rental at current market rates (20% down, 7.5% rate, standard expenses):
| Metric | As-Is (Current Rents) | Stabilized (Market Rents) |
|---|---|---|
| Purchase Price | $480,000 | $480,000 |
| Down Payment (20%) | $96,000 | $96,000 |
| Monthly Rent | $1,800 | $2,000 |
| Monthly Mortgage | $2,685 | $2,685 |
| Monthly OpEx (est 35%) | $630 | $700 |
| Est. Monthly Cash Flow | $-1,515/mo | $-1,385/mo |
| Cap Rate | 2.9% | 3.2% |
* Estimates only. Uses 20% down, 7.5% rate, 30yr term, 35% expense ratio, 5% vacancy. Run your own numbers with the calculator below.
Best for cash flow: Focus on workforce housing in established neighborhoods with strong employer anchors. Avoid chasing the highest raw yield numbers — the 10% cap rate in a declining neighborhood often means vacancy and management headaches that destroy returns.
Best for appreciation: Target neighborhoods within 2 miles of job centers, universities, or transit that are in the early stages of gentrification. Look for the coffee shop / yoga studio signal — amenities follow renters, and renters follow amenities.
Best for STR: Check local STR regulations carefully before investing. Some {name} neighborhoods have restrictions on short-term rentals.
DSCR Loans: Most Sacramento properties qualify for DSCR financing with a 1.0+ ratio. Use our DSCR Calculator to check qualification before making an offer.