Cap Rate for Massachusetts (2026)
Massachusetts (MA) Key Facts
Average Cap Rate
4.5%
Market Type
Seller's market
Median Property Value
$570,000
Average Annual Rent (1 B R)
$25,200
Estimated N O I
$15,120
How This Calculator Works in Massachusetts
This cap rate calculator helps you evaluate the return potential of investment properties in Massachusetts. Enter the property's value, annual rental income, and operating expenses to instantly calculate the cap rate. Compare your result against Massachusetts's average of 4.5% to see how a specific property stacks up. The calculator is pre-loaded with Massachusetts averages for quick estimates.
Massachusetts Overview
The average cap rate in Massachusetts is 4.5%, with median property values of $300,000 and average 1BR rents of $1,200/month. Massachusetts is tenant-friendly, requiring careful due diligence on local regulations. Without statewide rent control, Massachusetts allows market-rate rent adjustments that can improve cap rates over time.
How Massachusetts Compares
Massachusetts's cap rate of 4.5% is below average, reflecting higher property values relative to rental income. Neighboring Connecticut has a cap rate of 5.5% and Rhode Island is at 5.5%. Investors often diversify across states with different cap rate profiles to balance cash flow and appreciation.
| State | Top Rate | Notes |
|---|---|---|
| Connecticut | 5.5% | Average cap rate of 5.5% with median property value of $380,000. Balanced market. |
| Rhode Island | 5.5% | Average cap rate of 5.5% with median property value of $420,000. Balanced market. |
| New Hampshire | 5.5% | Average cap rate of 5.5% with median property value of $450,000. Balanced market. |
Massachusetts's average cap rate of 4.5% places it in seller's market territory. Nationally, cap rates range from about 3.5% in expensive coastal markets to 8% or more in affordable Midwest and Southern states. Higher cap rates indicate better cash-flow returns, while lower cap rates often come with stronger appreciation potential.
Tips for Massachusetts Residents
- 1The average cap rate in Massachusetts is 4.5%. Cap rate = net operating income / property value. This moderate cap rate in Massachusetts offers a balance of cash flow and potential appreciation.
- 2When calculating cap rate in Massachusetts, deduct all operating expenses: property taxes (1.1%), insurance, maintenance, vacancy, and management fees. Do not include mortgage payments—cap rate measures unleveraged return.
- 3Massachusetts has no rent control, meaning you can raise rents to market rates and improve your cap rate as the local rental market appreciates.
- 4Compare cap rates across Massachusetts neighborhoods. Urban cores often have lower cap rates (higher prices, lower yields) while suburban and secondary markets may offer better returns. A 1-2% cap rate difference on a $300,000 property changes annual net income by $3,000-$6,000.
- 5Massachusetts's tenant-friendly regulations increase operational complexity and risk. Investors should demand higher cap rates in Massachusetts to compensate for longer eviction timelines and potential rent restrictions.
Frequently Asked Questions
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