Cap Rate in Louisville, KY

2026 Market Overview for Real Estate Investors

Avg Cap Rate

7.3%

#14 of 50 markets

Median Home Price

$195,000

Purchase price

Median Monthly Rent

$1,300

$15,600/yr gross

Rent-to-Price Ratio

0.67%

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	633,045
5-Year Population Growth	+1.5%
Median Household Income	$52,000
Vacancy Rate	6.8%
Property Tax Rate	0.83%($1,619/yr)

Investor Takeaway

Louisville combines Midwest affordability with Southern growth dynamics. Low property taxes and a diversified economy (healthcare, logistics, bourbon tourism) make it a reliable rental market.

Quick Math

Estimated annual numbers for a median-priced property in Louisville, KY before financing:

Annual Gross Rent$15,600

Less Vacancy (6.8%)($1,061)

Less Property Tax (0.83%)($1,619)

Less Est. Insurance + Maintenance($3,900)

Estimated NOI$9,021

Implied Cap Rate4.6%

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