Westchester County, NY Cap Rates by Neighborhood

County-Wide Gross Yield: The Number That Misleads

At a 4.35% gross yield on a $879,219 median home price, Westchester County looks like a marginal cash-flow market. At 23.0x price-to-rent, it sits well above the threshold where net operating income covers debt service in any conventional financing scenario. Those figures are accurate and nearly useless for deal evaluation.

The county-wide median blends Bronxville's $2,837,500 median sales price against Mount Vernon and Peekskill entry points that run a fraction of that. It blends properties inside FEMA flood hazard zones with inland lots carrying no flood insurance burden. And it treats a $9,223 median annual property tax bill as a constant, when the multi-jurisdictional, uncapped assessment system means two adjacent parcels with different improvement histories can carry vastly different effective burdens. The spread across submarkets is what determines whether a deal works. The aggregate obscures it.

Property Tax: The NOI Killer You Must Quantify First

Before analyzing any submarket, run this math. Westchester's effective property tax rate is about 1.65%, the highest median property tax burden of any county in the United States. On a property purchased at the county ZHVI of $879,219, that rate implies roughly $14,500 in annual taxes.

Work that against the gross rent. At the county median rent of $3,184 per month, gross annual rent is $38,208. Subtract $14,500 in taxes alone and you are left with $23,708 before insurance, maintenance, vacancy, and any management costs. The gross-to-net compression from taxes alone is about 38 cents on every rent dollar. A rough net cap rate on a median-priced property, after taxes and a conservative 15% expense load on remaining costs, lands somewhere in the 2.0%–2.5% range.

That compression does not disappear at higher price points; it intensifies. Bronxville at $2,837,500 implies taxes of roughly $46,800 per year at the same effective rate. No rental income at that price point produces a viable current yield. Bronxville is an appreciation hold, full stop. Investors who model it as an income asset will find negative cash flow on day one.

The county's uncapped assessment system adds a compounding risk: any renovation or value-add that raises market value can trigger a reassessment, increasing the tax line in the same year rents are still catching up. Stress-test for a 10%–15% assessment increase in year two of any acquisition that involves significant capital improvement.

Submarket Breakdown: Where the Real Yield Spread Lives

Premium Metro-North Corridor: Bronxville, Scarsdale, Larchmont, Pelham, Mamaroneck

These towns posted strong price growth into early 2026 with supply measured in weeks, not months. Bronxville's median hit $2,837,500 in February 2026, up 7.1% year-over-year. At that entry price, gross yields shrink to sub-2% before any operating expense. Net cap rates approach zero or go negative.

For investors already holding assets here, the equity story is intact. For new acquisitions, the only rational underwriting model is appreciation-driven: banking on continued price growth against a backdrop of 2.4 months of county-wide supply and a secular NYC-to-suburbs migration pipeline. Cash flow is not the return mechanism.

Workforce Submarkets: Mount Vernon, Port Chester, Peekskill

These three towns are where the county's internal demand displacement is most legible. Buyers priced out of Scarsdale and Larchmont are moving down-market, and projected appreciation of 5%–7% in these towns reflects that compression. Entry prices are lower relative to the county median, which matters because the tax burden, while still expressed at roughly the same effective rate, produces a smaller absolute dollar drag at lower purchase prices.

At a hypothetical acquisition price of $500,000 in Mount Vernon or Port Chester, the 1.65% effective rate generates about $8,250 in annual taxes. Against rents plausibly achievable in workforce submarkets that trend toward the county median, gross yields are closer to 5.5%–6.5%, and net yields after taxes land in the 3.0%–4.0% range. That is still thin in an absolute sense but is the best attainable current yield within the county.

The workforce renter base in these towns is reinforced by the county's 497,000-person employment base anchored in healthcare (85,028 jobs) and education (63,585 jobs). Those are not work-from-home jobs; they generate persistent, in-place rental demand.

Life Sciences and Healthcare Corridor: Tarrytown, Valhalla

Regeneron's Tarrytown campus anchors a life sciences sector projected to grow 18% from 2021 to 2031. Prestige Consumer Healthcare's 79,386 SF re-commitment at 660 White Plains Road in Tarrytown signals continued corporate stabilization in the submarket. The health and hospital systems across the county generate $18 billion in economic impact and over 50,000 direct jobs.

Residential properties within commuting distance of Tarrytown and Valhalla benefit from a tenant pool of healthcare and life-sciences professionals with above-median incomes. Gross yields in this corridor likely track the county average or slightly below given price appreciation, but tenant quality and lease stability reduce effective vacancy costs, improving net performance relative to raw yield figures.

Neighborhood Comparison Table

Price estimates for Tarrytown/Valhalla and workforce submarkets are inferred from county-level data and submarket descriptions in the research brief; verify with current MLS data before underwriting.

Flood Risk Adjustment to Net Yield

First Street Foundation projects 20% of Westchester County properties will face flood risk within 30 years. The county has only three active flood-risk-reduction projects protecting 594 properties. For assets near the Long Island Sound shoreline, the Hudson River, or any of the county's inland rivers, flood insurance is a non-optional cost that must enter the net yield calculation.

FEMA's post-Sandy Advisory Base Flood Elevations expanded mapped hazard areas across the county. Any municipality that fails to adopt updated FIRMs within six months of FEMA issuance risks losing NFIP participation, which would make federally backed mortgages unavailable on Special Flood Hazard Area properties, directly impairing resale liquidity. For waterfront or near-water acquisitions, add a flood insurance line item to your pro forma before assessing net cap rates, and screen each parcel individually against current FEMA flood maps and First Street's 30-year projections.

Cap Rate Compression vs. Decompression

Prices are moving faster than rents. The county-wide ZHVI is up 5.89% year-over-year. Single-family median prices rose 6.5% in full-year 2025 and 8% in Q3 2025 specifically. No equivalent rent growth figure is available at the county level, but at a static $3,184 ZORI against rising purchase prices, the gross yield is compressing over time, not expanding.

For existing holders, that compression is equity accretion. For new buyers, every month of price appreciation without commensurate rent growth widens the gap between gross yield and any threshold net yield that justifies acquisition on income terms. The 2.4-month supply figure and 35-day average days on market confirm that the supply constraint keeping prices elevated is not easing. Decompression would require a supply shock (unlikely given chronic undersupply and political resistance to density) or a demand collapse (not supported by the employment or migration data).

Cap Rate Outlook

The ADU expansion across Dobbs Ferry, Cortlandt, and other municipalities represents the most actionable path to improving net yields on single-family acquisitions. Adding a legal ADU to an existing lot increases gross rent on the same tax base, improving net cap rates without triggering a full reassessment on a new purchase price. The county's model ordinance recommending removal of minimum lot-size requirements and reduction of minimum lease terms to six months broadens the pool of eligible properties.

The planned White Plains TransCenter BRT convergence and I-287 corridor BRT could generate TOD premiums in walkable station-area properties, though no firm construction timeline exists. Investors treating that upside as certain are speculating; investors who buy at current yields and treat transit access as optionality are positioned better.

Ken Jenkins's county executive administration has made pro-housing-production policy a stated priority. That increases the probability of further ADU and multifamily zoning reforms over the next 24–36 months, which would improve the economics of existing-lot value-add strategies.

The range is clear: Westchester net cap rates run from near zero in premium towns to roughly 3.0%–4.0% in workforce submarkets. Taxes are the largest single variable separating gross from net. The county rewards patient capital, not yield investors with short hold periods. Model your specific deal with our investment property calculator to stress-test tax burden, flood insurance exposure, and ADU income potential before committing to a price point.