Cap Rate in Huntsville, AL

2026 Market Overview for Real Estate Investors

Last updated: March 2026 • Sources: Census ACS, Zillow, Redfin, county assessor

Avg Cap Rate

7.1%

#16 of 50 markets

Median Home Price

$260,000

Purchase price

Median Monthly Rent

$1,500

$18,000/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	225,492
5-Year Population Growth	+14.2%
Median Household Income	$62,000
Vacancy Rate	5.5%
Property Tax Rate	0.42%($1,092/yr)

Investor Takeaway

Huntsville is the fastest-growing city in Alabama with massive aerospace and defense investment. Low property taxes and explosive population growth make it a strong appreciation + cash-flow hybrid play.

Top Neighborhoods for Investors

Where to focus your search in Huntsville, AL:

Research Park

Appreciation

Adjacent to Cummings Research Park (second largest in US). Aerospace and defense professionals drive premium rent demand. Fastest appreciation in Alabama.

Five Points

House Hacking

Historic walkable district near downtown. Character homes attract young professionals. Strong house hacking potential with duplex availability.

Madison

Appreciation

Suburban growth corridor with new construction. Family-oriented renters with high income levels. Lower cap rates but excellent appreciation trajectory.

Quick Math

Estimated annual numbers for a median-priced property in Huntsville, AL before financing:

Annual Gross Rent$18,000

Less Vacancy (5.5%)($990)

Less Property Tax (0.42%)($1,092)

Less Est. Insurance + Maintenance($5,200)

Estimated NOI$10,718

Implied Cap Rate4.1%

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