On a typical Rhode Island rental, a single-family home near $435,000 renting for about $1,925, the numbers produce a 2.7% cap rate after Rhode Island's 1.07% property tax, insurance, vacancy, and upkeep. That is $11,699 a year of net operating income before any mortgage. The tool below is preloaded with that rental; every return measure updates as you change it.
Rhode Island rental returns at a glance
| Example rental price85% of the statewide median value | $435,000 |
|---|---|
| Example rent1.35× the $1,418 statewide median | $1,925 |
| Gross rent multiplierPrice ÷ a year's rent | 18.8 |
| 1% ruleMisses: rent is under 1% of price | 0.44% |
| Effective property tax rateTakes about 1.07% straight off the cap rate | 1.07% |
| Expense ratioOperating costs ÷ gross income | 49% |
Home values: Zillow, September 2026. Income, rent, and property tax: U.S. Census Bureau ACS, 2024. Insurance is an estimate. Sources · How every state compares
A Rhode Island rental, every return measure
| Gross rent, yearly | $23,100 |
|---|---|
| Operating costs, yearlyTaxes, insurance, 5% vacancy, 8% maintenance, 8% management | $11,401 |
| Net operating income | $11,699 |
| Cap rateHeadline result | 2.7% |
| Cash invested (25% down, closing, repairs) | $126,250 |
| Mortgage at 6.875%Per month | $2,143 |
| Cash flowPer month | -$1,168 |
| Cash-on-cash returnHeadline result | -11.1% |
| Year-one total returnWith principal paydown and appreciation | 1.9% |
| All-cash cash-on-cash | 2.6% |
Rhode Island costs behind the cap rate
Property taxes come straight off the cap rate
When taxes are assessed near the purchase price, the effective tax rate subtracts almost one for one from the cap rate: Rhode Island's 1.07% costs the example rental about 1.07% of yield. Property is assessed at 100% of market value; the homestead relief and circuit-breaker programs reduce the effective rate for owner-occupants only.
Insurance in Rhode Island
Budget about $1,900 a year for a landlord policy. Older housing stock and winter freeze risk drive claims here — burst pipes and ice dams are common — and shoreline properties frequently need separate wind or flood endorsements.
Landlord rules in Rhode Island
No statewide rent control. Security deposits must be returned within 20 days of the end of the tenancy. Rules on deposits, notice, and rent increases shape vacancy and turnover cost, two of the softest numbers in any NOI.
How to analyze a Rhode Island rental
- Enter the asking price and the cash you'll need at closing and for repairs before the first tenant.
- Set rent from comparable Rhode Island leases for the same bed and bath count within a mile, signed in the last few months.
- Replace the statewide 1.07% tax rate with the parcel's actual bill; watch for reassessment after a sale.
- Keep maintenance and management in the budget even if you self-manage; your time and the next roof are real costs.
- Read cap rate for the property, cash-on-cash for your deal, and use the price table to set an offer at your target cap rate.
Methodology
Net operating income is rent and other income, less vacancy and every operating cost, before the mortgage. Cap rate divides annual NOI by the price. Cash-on-cash divides cash flow after the mortgage by cash invested; total return adds year-one principal paydown and appreciation to cash flow over the same cash.
Rhode Island prices, rents, and tax rates start from sourced statewide data (listed under Sources), scaled to a typical single-family rental; insurance is an estimate. Cap rates vary widely between neighborhoods; compare against recent sales of similar rentals nearby.
Sources
- Typical home value: Zillow Home Value Index (all homes, mid tier, seasonally adjusted), September 2026.
- Median household income: U.S. Census Bureau, American Community Survey 1-year estimates, table B19013, 2024.
- Median gross rent: U.S. Census Bureau, American Community Survey 1-year estimates, table B25064, 2024.
- Effective property tax rate: Median real estate taxes paid (B25103) ÷ median home value (B25077), Census ACS 1-year, the Tax Foundation's method, 2024.
- Homeowners insurance: Keystone estimate of a typical annual premium. Replace it with a quote for the address, 2026.
Read the full methodology, worked example, and caveats in the national Cap Rate & Rental ROI Calculator guide.
Rhode Island FAQ
- What is a good cap rate in Rhode Island?
- There is no single figure, but the typical Rhode Island single-family rental in this example earns 2.7%. Prime neighborhoods trade lower, higher-risk ones higher. The useful test is the spread over your mortgage rate: at 6.875%, this rental's cap rate is below it, so financing dilutes the cash return.
- How do Rhode Island property taxes affect cap rate?
- Almost one for one. Taxes are an operating expense, and when they are assessed near the price, the effective rate comes straight off the cap rate. Rhode Island's 1.07% costs about 1.07% of yield; that is close to the national middle.
- Does the 1% rule work in Rhode Island?
- The example rental rents for 0.44% of its price each month, short of the 1% screen. Few US markets meet it at today's prices, so use it to sort listings and the full NOI to decide.
- How much does a rental property make in Rhode Island?
- On the example numbers, about $11,699 a year before the mortgage and -$14,020 after it with 25% down, a -11.1% cash-on-cash return. Adding principal paydown and 3% appreciation brings the year-one total return to 1.9%.
Other state editions
Every state gets its own edition of the Cap Rate & Rental ROI Calculator, preloaded with that market's typical values, tax rates, and insurance costs: