Cap Rate in Los Angeles, CA

2026 Market Overview for Real Estate Investors

Avg Cap Rate

3.2%

#49 of 50 markets

Median Home Price

$900,000

Purchase price

Median Monthly Rent

$2,700

$32,400/yr gross

Rent-to-Price Ratio

0.30%

Below 1% rule

Cap Rate Rating

Low

Below average return. Common in high-appreciation markets. You are betting on property value growth, not cash flow.

Market Snapshot

Population	3,898,747
5-Year Population Growth	-1.0%
Median Household Income	$70,000
Vacancy Rate	4.5%
Property Tax Rate	0.76%($6,840/yr)

Investor Takeaway

Los Angeles is an appreciation-driven market with strict rent control in many areas. High entry costs and tenant protections make cash flow challenging, but long-term land value appreciation has historically rewarded patient investors.

Quick Math

Estimated annual numbers for a median-priced property in Los Angeles, CA before financing:

Annual Gross Rent$32,400

Less Vacancy (4.5%)($1,458)

Less Property Tax (0.76%)($6,840)

Less Est. Insurance + Maintenance($18,000)

Estimated NOI$6,102

Implied Cap Rate0.7%

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