Calloway County

Calloway County posts a gross rent-to-price ratio of 7.6%, which puts it well above the threshold where cash flow becomes plausible on paper. The modeled cap rate of 4.96% at a $175,394 purchase price is respectable for a market at this price point, and it reflects the fact that $1,116 per month in median rent goes meaningfully further here than in most Kentucky counties. The problem is that the modeled cash-on-cash return comes in at -5.77% after financing at 6.85%, producing an estimated -$194 per month in net cash flow. That gap between a decent cap rate and negative levered returns is a direct consequence of today's interest rate environment, not a flaw in the market's rent-to-price dynamics. Calloway scores 76 on cash flow and 0 on appreciation, which is the data's clearest statement about what kind of market this is: it is priced for income, not growth. Home values fell 13.3% year over year, so the appreciation score of zero is not a rounding error.

The buyer this market suits is a cash or low-leverage operator. At a 20% down payment and 6.85% debt, the math doesn't pencil. Reduce leverage meaningfully, or bring the purchase price below median through value-add acquisition, and the 7.6% rent-to-price ratio starts doing real work. An investor who can either pay cash, access cheaper capital, or buy distressed at a 15-20% discount to the $175,394 median could push effective cap rates toward 6% or better and turn the levered returns positive. The affordability index of 92 and the median price under $180,000 mean there is a real supply of properties in the $120,000-$150,000 range worth targeting. This is not a market for an appreciation buyer: a 13.3% price decline in one year, combined with a population base of 37,345, does not support a thesis built on equity growth.

No economic anchor data was provided for Calloway County, so this analysis does not speculate on specific employers or demand drivers beyond what the numbers reflect.

The combined monthly tax and insurance load at the Kentucky state-average effective rate of 0.86% works out to $174 per month, with $1,508 in annual property tax and $579 in annual insurance baked into that figure. That $174 is already embedded in the $391 estimated monthly expense figure and the -$194 cash flow projection. With a propertyTaxFlag of "normal," the rate is not a particular headwind here, and it is not the reason the levered returns are negative. Worth flagging: the 0.86% figure is a state-average estimate per Tax Foundation 2024 data, and actual Calloway County or township-level rates may differ, so pull the current county assessor data before finalizing your underwrite.

The sharpest risk in this market is demographic and demand concentration. A population of 37,345 is small, and any meaningful softening in local rental demand, whether from enrollment changes at Murray State University, which is a reasonable inference from the market profile but not a number in the data, or from broader population trends, would hit vacancy rates quickly in a market this size. The 13.3% year-over-year home price decline is worth sitting with: it either signals a mean-reversion from pandemic-era overpricing, a liquidity-thin market with lumpy transaction data, or genuine demand deterioration. You need to understand which before committing capital.

Among the provided neighbors, Calloway's rent-to-price ratio of 7.6% is the highest in the group by a wide margin. Warren County sits at 5.2% on a $286,155 median, and Madison County comes in at 4.2% on a $276,671 median. Both score marginally higher overall (56 and 57 versus Calloway's 54), but neither offers the income-oriented entry point that Calloway does. McLean County has the group's best overall score at 60 and a median price of $152,820, making it worth a direct comparison if you want a smaller, potentially lower-risk rural market. Johnson County at $138,885 is the cheapest in the group but scores only 51. If your mandate is maximizing gross yield and you have the operational discipline to manage a small, potentially university-adjacent rental market at low leverage, Calloway's price point and rent-to-price ratio give it an edge over its neighbors. If you need a financed deal to work at market rates today, none of these counties solve that problem, and Calloway is not the exception.