Franklin County, OH Cap Rates by Neighborhood

The Aggregate Yield Is a Starting Point, Not a Decision

Franklin County's computed gross yield sits at 6.01% against a median home price of $301,340 and median rent of $1,510/month. That number is real but almost useless for deal-level underwriting. The county spans everything from Franklinton rowhouses at cap rates approaching 10% to New Albany luxury homes generating 4% or less. Using the county-wide figure to screen any individual acquisition means you are averaging two entirely different investment theses and arriving at neither.

The spread between sub-markets is where the analysis starts.

Neighborhood Cap Rate Tiers

Franklin County's single-family rental market breaks into three distinct tiers, each with a different risk/return profile.

Tier 1: Urban Cash-Flow Corridors (7–10% Cap Rates)

Hilltop, South Linden, and Franklinton are the county's highest-yielding neighborhoods on a gross basis. Entry prices in these corridors are far below the $301,340 county median, which is precisely what pushes gross yields into the 7–10% range. These are real cash-flow assets, not appreciation plays priced at a premium.

Franklinton adds a specific wrinkle. It is one of the county's most active gentrification corridors in 2025 and sits adjacent to the West Broad Street BRT corridor, which has federal funding secured, right-of-way work underway, and a 2028 opening target. That combination of early-stage appreciation potential and yield is rare. The cost is flood risk: much of Franklinton sits in FEMA AE zones where NFIP coverage is mandatory for federally backed mortgages. Flood insurance averages about $870/year in Ohio. On a $200,000 acquisition, that adds roughly 44 basis points to effective annual operating cost before you touch standard property insurance or management. Net cap rates in Franklinton's AE-zone parcels will land well below the gross headline.

Tier 2: First-Ring Suburbs (6–8% Cap Rates)

Reynoldsburg, Gahanna, and Westerville generate gross cap rates in the 6–8% range. These markets offer more stable tenancy profiles, lower management friction, and more predictable appreciation than Tier 1 but less yield than the urban core. They are the natural landing spot for investors who want cash-flow coverage with a long-hold component and are less comfortable with urban submarket volatility.

Tier 3: Premium Suburbs (4–6% Cap Rates)

Dublin, Powell, and New Albany sit at the low end of the yield range. New Albany's average sale price was $1,183,864 in 2024. At that price point and a 4–5% gross cap rate, initial cash flow is minimal to negative after financing. These are appreciation-hold positions. The Intel Ohio chip fab, which would have provided a near-term demand catalyst for New Albany/Johnstown, has pushed its production start to 2030–2031. Land speculation in those corridors has cooled, which creates better entry pricing than existed 18 months ago, but the thesis is still a 7–10 year hold, not a yield story.

Neighborhood Comparison Table

Property Tax Drag on Net Cap Rates

Franklin County's effective property tax rate ranges from 1.48% in Columbus proper to 1.72% in Whitehall. The difference matters when you run it against actual purchase prices.

On a $301,340 median-priced property:

• At 1.48% (Columbus proper): $4,460/year in property taxes
• At 1.72% (Whitehall): $5,183/year in property taxes

Annual gross rent at $1,510/month is $18,120. Property taxes alone consume 24.6% to 28.6% of gross rent before insurance, maintenance, vacancy, or management. That compresses a 6.01% gross yield down to roughly 4.3–4.5% before all other operating line items.

For a Tier 1 urban asset generating 8% gross, the math is better but the absolute dollar drag is the same. An $180,000 Hilltop property at 1.48% carries $2,664/year in taxes against perhaps $15,000 in gross rent (8.3% yield), consuming about 17.8% of gross revenue.

Two additional tax headwinds layer on top of these rate calculations. Ohio's House Bill 186, passed in 2025, eliminates the nonbusiness credit for most rental properties. Landlords who previously used that credit to reduce their bills lose that offset entirely. Model the per-parcel impact before closing. Separately, Franklin County's 2026 Triennial Update is underway this summer. The 2023 reappraisal drove a projected 27% surge in county property-tax revenues. Investors who acquired post-2023 near assessed value face a real possibility of upward bill adjustment in 2026. Stress-test your NOI against a 10–15% tax increase when underwriting any acquisition today.

Cap Rate Compression vs. Decompression

The current environment is close to neutral at the headline level. Home price appreciation is flat: ZHVI YoY change is 0.08%. Rents, meanwhile, stabilized after two consecutive years of occupancy decline, with multifamily net absorption in 2024 running 25% above the 10-year average.

What that combination produces is modest decompression pressure going forward, not compression. Prices are not running ahead of rents. And with multifamily construction starts down nearly 50% in 2024 to their lowest level in over a decade, the pipeline stands at just 4.4% of total inventory, 18% below the cycle peak. When supply dries up and absorption runs above historical norms, the directional pressure on rents is upward. That benefits existing yield assets more than new buyers, since any rent growth on a flat-price entry improves forward cap rates rather than getting immediately arbitraged away by price appreciation.

The risk to this decompression thesis is the 2026 reassessment. If tax bills jump and owners reprice assets to maintain their yield targets, you could see list prices nudge upward even in a flat rate environment, which would offset the rent-growth tailwind.

Insurance and Flood-Risk Yield Adjustment

For assets in Zone X, no flood insurance adjustment is needed. The majority of Columbus proper is Zone X.

For Franklinton AE-zone parcels specifically: budget $870/year for NFIP coverage as a hard line item. On a $180,000 Franklinton acquisition, that represents about 48 basis points of annual yield erosion before the standard property insurance premium. Combined with the property tax drag calculated above, a 9% gross cap rate on a Franklinton asset realistically nets to 6.5–7% after taxes, flood insurance, and standard property coverage, and before vacancy or management. That is still a strong yield relative to the county median, but the gross number overstates what you will actually collect.

Cap Rate Outlook

The setup for buy-and-hold investors entering Franklin County in 2025–2026 is more favorable than at any point since 2019 on the supply side. The construction pipeline is the thinnest it has been in over a decade, and record transaction volume of $11.1 billion in 2025 confirms that institutional and retail capital is pricing in continued demand.

The BRT corridors on West Broad and East Main represent the clearest geographic concentration of upside. West Broad construction starts in 2026 with a 2028 opening. East Main follows by about a year. Properties within walkable distance of planned stations on those corridors carry both a current cash-flow yield in the Tier 1–2 range and a visible, funded catalyst for appreciation as construction advances. Early acquisition before 2026 station construction announcements is when the pricing advantage is largest.

The risks that require active management: the 2026 reassessment (model a 15% tax increase in your worst case), the HB 186 nonbusiness credit loss (quantify per parcel before closing), and AE-zone flood insurance costs in Franklinton and similar west-of-Scioto locations.

Columbus median home prices sitting 33% below national averages gives the market a structural floor against sharp downside. At $301,340 median and a price-to-rent ratio of 16.6x, Franklin County remains one of the few markets where cash flow and long-term appreciation are simultaneously achievable without choosing between them.

Model your specific deal with our investment property calculator to apply the location-specific tax rate, flood zone status, and BRT proximity adjustment to your target asset.