Austin Real Estate: Highest Cap Rate ZIP Codes for Rental Investors in 2025

Top 5 Austin-Area ZIP Codes with the Highest Cap Rates – May 2025 Data

Published 05/07/2025 | Posted by Robert Foradory

As of May 7, 2025, updated real estate data highlights which ZIP codes in the Austin metro area are offering the strongest gross cap rates for single-family rental properties. The cap rate, or capitalization rate, is a key performance metric that compares a property's rental income to its purchase price. This report calculates cap rate using the following formula:

Cap Rate = (Estimated Annual Rent – Property Tax) ÷ Median Sold Price

The average desired gross cap rate used for comparison in this analysis is 4.226%. Maintenance costs are listed in the report but are not included in the cap rate formula. Only ZIP codes with sufficient sales data and without too many high-end listings were considered.

The ZIP code 78725, located in East Austin, recorded the highest gross cap rate at 5.51%. The median sold price in this area was $301,900. With property taxes around $5,470 and estimated annual rent at $23,255, the net operating income (NOI) totaled $16,629. This cap rate places 78725 at the top of the list for rental return potential.

The second-highest cap rate was found in 78724, also in East Austin. This area posted a gross cap rate of 5.10%. Homes in this ZIP code had a median price of $325,000. Annual property taxes were reported at $7,249, while estimated rent was $25,088. The resulting NOI was $16,572.

Next on the list was 78654, located in Marble Falls, with a cap rate of 4.70%. The median home price here was $360,000. Property taxes were $6,966, and projected annual rent was $25,167. The NOI in this area reached $16,915.

The 78611 ZIP code in Burnet also showed strong numbers with a cap rate of 4.69%. The average sold price was $325,175. Taxes came in at $6,210 annually, and rent was estimated at $22,584, resulting in a NOI of $15,253.

Rounding out the top five was 76537, covering Jarrell. This area reported a gross cap rate of 4.52%. Homes were selling for a median price of $280,563. Property taxes were $7,554, and annual rent came in at $21,237. The NOI reached $12,670.

These five ZIP codes exceeded the 4.226% average desired cap rate used in the analysis. All five had median home prices under $400,000, lower property tax totals compared to other areas, and rental income that supported strong net operating figures. These numbers reflect gross cap rate performance based solely on property taxes and rent and do not account for other expenses like maintenance, insurance, or vacancy rates.

This data snapshot was compiled by Cap Rate Team Price Real Estate and is current as of May 7, 2025.

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