Cap Rate in Chicago, IL

2026 Market Overview for Real Estate Investors

Avg Cap Rate

6.0%

#27 of 50 markets

Median Home Price

$275,000

Purchase price

Median Monthly Rent

$1,600

$19,200/yr gross

Rent-to-Price Ratio

0.58%

Moderate

Cap Rate Rating

Good

Strong return relative to market norms. Common in cash-flow-focused markets in the Midwest and South.

Market Snapshot

Population	2,665,039
5-Year Population Growth	-1.2%
Median Household Income	$62,000
Vacancy Rate	7.5%
Property Tax Rate	2.23%($6,133/yr)

Investor Takeaway

Chicago offers big-city rents at Midwest prices, but property taxes are a significant drag on returns. Target south Loop, Logan Square, and Pilsen for the best cap rate dynamics.

Quick Math

Estimated annual numbers for a median-priced property in Chicago, IL before financing:

Annual Gross Rent$19,200

Less Vacancy (7.5%)($1,440)

Less Property Tax (2.23%)($6,133)

Less Est. Insurance + Maintenance($5,500)

Estimated NOI$6,128

Implied Cap Rate2.2%

Estimates based on median values. Insurance + maintenance estimated at 2% of home value. Actual results vary by property condition, neighborhood, and management.