Fayette County

Fayette County sits at a 3.84% cap rate and a rent-to-price ratio of 0.059, which places it squarely in appreciation territory rather than cash-flow country. At a $330,784 purchase price and $1,628 median rent, the gross yield simply does not cover the carry. Run the standard 20% down underwrite at 6.85% and you land at a $1,734 monthly mortgage, $570 in estimated expenses, and a combined $328 in monthly tax and insurance, producing negative $676 in monthly cash flow and a cash-on-cash return of -10.66%. The 3.35% year-over-year home price appreciation is real but not explosive, so this is not a market where you bank on near-term price gains to compensate for deep monthly losses. What Fayette offers is a mid-sized city with genuine appreciation momentum and an affordability index of 59, meaning assets are neither distressed bargains nor overpriced by regional standards.

The numbers point toward one investor profile: an appreciation-oriented buyer with patient capital who underwrites the negative carry as a holding cost and expects compounding price growth over a five-to-ten year horizon. The cash-flow buyer should look elsewhere, full stop. A cash-on-cash of -10.66% is not a rounding error or a minor drag; it is a structural feature of the price-to-rent relationship here, and no reasonable value-add renovation closes that gap without a rent premium that the median market may not support. The 0.059 rent-to-price ratio is below the 0.07 threshold most cash-flow investors treat as a floor. The appreciation score of 81 out of 100, however, ranks Fayette as a genuine outperformer on that dimension, suggesting the market has earned its reputation as one of Kentucky's price-growth leaders even if the income math is unfavorable.

Kentucky's state-average effective property tax rate of 0.86%, combined with an insurance rate of 0.33%, produces an estimated $328 per month in tax and insurance, which amounts to $3,936 annually. That is baked into the negative cash-flow figure above, but worth isolating: the tax rate here is flagged as normal rather than punitive, so unlike high-tax states where the levy alone kills a deal, Fayette's carry cost burden comes primarily from the price-to-rent mismatch rather than a hostile tax environment. The $570 in estimated monthly expenses is the other line to stress-test on your underwrite, particularly maintenance reserves and property management, which can shift materially on older Lexington housing stock. As always, the 0.86% figure is a state-average estimate; actual Fayette County rates may differ, and you should pull the county assessor's current millage rate before finalizing any projection.

Fayette's biggest concentration risk is its reliance on a single metro economy. Lexington is Kentucky's second-largest city with a population of 321,276, but that scale brings single-market exposure. The stability score of 50 out of 100 is the lowest of the four scored dimensions here, suggesting the data reflects some underlying volatility or concentration concern worth scrutinizing. A market that scores 81 on appreciation but only 50 on stability is telling you the upside is real but not guaranteed, and that demand cycles may be more pronounced than in more diversified metro areas.

Comparing Fayette to its neighbors clarifies the trade-offs. Oldham County carries a higher median price at $433,371 and a weaker rent-to-price ratio of 0.051, making it an even worse cash-flow proposition despite a comparable overall score of 62. Clark County, at a $256,519 median and a 0.056 rent-to-price ratio, is cheaper to enter but yields a lower ratio than Fayette and scores 65 overall, suggesting modest improvement on a composite basis but not a compelling cash-flow alternative either. Hardin County is the most interesting comparison: at $241,967 median and a 0.068 rent-to-price ratio, it crosses the 0.07 threshold closely enough that a buyer who prices correctly could approach cash-flow neutral, and its 65 overall score edges Fayette. Greenup and McLean counties offer sub-$155,000 medians, which lowers the entry barrier, but both lack rent data in this dataset, making them harder to underwrite with confidence. If your mandate is appreciation in a mid-sized Kentucky city with a real economic base, Fayette is the right choice over its neighbors. If your mandate is income, Hardin County deserves a closer look before you commit capital to Fayette.