Collin County, TX Cap Rates by Neighborhood

County-Wide Gross Yield: The Number That Misleads

At a 4.28% gross yield, Collin County looks like a cash-flow desert on paper. Divide the $1,736 median monthly rent by the $486,570 median home price and you get a market that prices in future appreciation, not current income. A leveraged investor underwriting at today's rates will run negative cash flow on a median-priced asset before accounting for property tax, insurance, maintenance, or vacancy.

But the county median is a blended average across Plano, Frisco, McKinney, Allen, and outer-ring cities like Celina, each with distinct price points, rent bases, and supply dynamics. The spread between those submarkets is where the actual decision lives.

Neighborhood-by-Neighborhood Yield Analysis

Plano: Lowest Price Appreciation, Highest Yield Stability

Plano's 2025 median sits at about $540,000, and it was the only peer city where median prices rose year-over-year. That price stability is partly a supply story: Plano is a resale-dominated market with minimal new construction adding downward pressure.

Gross yield on a $540,000 Plano property at the county median rent of $1,736 computes to about 3.86%. That is below the county average, reflecting Plano's price premium. The counter-argument for Plano is that rent declines are less likely here than in outer suburbs because the competitive set of new construction rental supply is thinner. Investors in Plano are buying yield durability, not yield magnitude.

The DART Silver Line, connecting DFW Airport through Richardson into Plano, completed end-to-end vehicle testing in early 2025. Station-area properties in Plano are positioned to capture a transit-proximity premium as the line moves toward operational status, which could compress cap rates further through price appreciation faster than rent growth.

Allen: Mid-Tier Price Point, Mid-Tier Yield

Allen's 2025 median of $525,000 slots between Plano and McKinney. At county median rent, the gross yield runs about 3.97%. Allen has not attracted the same volume of new construction pressure as McKinney or Frisco, and four of the county's top-50 nationally ranked cities include Allen at 10th per WalletHub's 2025 ranking, a tailwind for occupancy.

The November 2024 FEMA map update expanded Special Flood Hazard Area designations in portions of Allen specifically. Any Allen acquisition requires a flood zone check before underwriting; a newly mapped SFHA property adds mandatory flood insurance for federally backed loans, which can reduce net yield by 30–60 basis points depending on coverage cost.

McKinney: Widest Acquisition Opportunity, Most Supply Risk

McKinney's median dropped about $35,000 in 2025 as builders flooded the market with lower-priced new product. At a revised median closer to $460,000 and county median rent, the gross yield improves to about 4.52%, the best raw number among the major cities in this county.

Days on market averaged 27 in McKinney versus 25 in Plano, a narrow gap suggesting demand has not collapsed despite the price correction. The Globe Life headquarters relocation bringing 3,000 jobs to McKinney, combined with the $79 million McKinney National Airport expansion targeting commercial flights by 2026, represent real demand catalysts that could tighten the rent market in the northern corridor over the next 12–24 months.

The risk: that same new construction pipeline creates occupancy competition for existing landlords. A buy-and-hold investor entering McKinney today gets a better entry yield and a potentially accelerating demand story, but must underwrite vacancy at higher levels than Plano until the corporate relocations absorb the excess supply.

Frisco: Premium Prices, Weakest Current Yield

Frisco's $690,000 median is the highest in the county by a wide margin. At county median rent, the gross yield falls to about 3.01%, roughly 127 basis points below the county average. Median prices in Frisco declined about $6,000 in 2025, and days on market averaged 36, the longest of any major Collin submarket.

Frisco ranked 6th nationally in WalletHub's 2025 city rankings, which sustains in-migration pressure and long-run appreciation potential. For an income-focused investor, though, the current yield math is too thin to justify the entry price unless the underwriting is almost entirely appreciation-driven with a long hold horizon of 7–10 years or more.

Celina: Highest Yield Potential, Highest Execution Risk

Celina saw the sharpest price correction in the county, with median prices down about $90,000 in 2025. If entry prices have compressed to the $400,000–$430,000 range, gross yields on a Celina single-family asset could approach 4.85%–5.00% at current rents, the only submarket where break-even cash flow becomes plausible on a moderately financed deal.

Celina adopted Planned Development zoning ordinances in 2024 permitting attached single-family and horizontal multifamily on key growth corridors, opening a path for small multifamily and build-to-rent plays. The risk is that Celina's rent base is not yet deep enough to absorb a vacancy, and the new construction pipeline remains active. Thin rental comps, longer stabilization timelines, and early-phase infrastructure all require a higher yield cushion to justify.

Submarket Gross Yield Comparison

Property Tax Drag on Net Yield

Collin County's median effective property tax rate is 1.30%. On a $486,570 median-priced property, that produces an annual tax bill of about $6,325. Applied to the county median rent of $20,832 annually, property tax alone consumes 30.4% of gross rent before any other operating expense.

Run the same math on a Frisco property at $690,000: the tax bill rises to about $8,970 per year, consuming 43% of gross rent at $1,736 per month. At that level, net operating yield after tax and a 5% vacancy allowance is somewhere in the 1.5%–1.8% range before maintenance and insurance. That is not an investable current yield.

McKinney at $460,000 generates a tax bill near $5,980, consuming about 28.7% of gross rent. Combined with the higher gross yield, the net yield in McKinney is wider than in Frisco or Plano by a real margin, which is why sub-$450,000 price points in McKinney and Allen are where the cash-flow math is least negative.

The county's 33-year streak without a county-level rate increase holds the base rate stable, but rising assessed values still push effective bills higher annually. The 10% annual appraisal cap on homesteaded properties protects owner-occupants but does not apply to investor-owned rental property, meaning assessed value resets to market on acquisition.

Cap Rate Compression vs. Decompression

Prices in Collin County fell 6.07% year-over-year through mid-2026. If rents held flat or declined less than prices, that means cap rates have been decompressing from the 2021–2023 compressed levels, reversing the pandemic-era squeeze.

Active resale listings surged 57.6% year-over-year as of mid-2025, with 55.7% of listings showing price reductions by November 2025. Builders added 1,900 new construction listings, up 27.1%. This supply wave is pushing prices down faster than rents in outer suburbs like Celina and McKinney, which is the classic condition for yield expansion at acquisition.

The decompression is most visible in Celina and McKinney, where the $90,000 and $35,000 price drops have not been matched by rent declines of comparable magnitude, because renters and buyers are different pools. Plano is the exception: price appreciation there, combined with thin new supply, means cap rates in Plano are not decompressing the way they are in the growth-corridor cities.

Flood Insurance Adjustment to Net Yield

The November 2024 FEMA map update expanded SFHA designations in Allen, McKinney, Princeton, Fairview, Lowry Crossing, Lucas, New Hope, and unincorporated areas. Properties newly drawn into a high-risk zone require mandatory flood insurance on federally backed mortgages.

Flood insurance premiums under the NFIP Risk Rating 2.0 methodology vary by elevation, structure type, and coverage amount, but annual premiums in the $800–$2,400 range on a single-family rental are realistic. On a McKinney property generating $20,832 gross annual rent, a $1,500 flood insurance premium shaves another 7.2 percentage points off the gross rent before all other expenses, pulling net yield down by a further 35–70 basis points depending on financing terms.

Critically, over 25% of NFIP claims nationally come from properties outside designated high-risk zones. Investors in lower-lying areas of established Plano and Allen, where drainage infrastructure is aging, should price in flood risk even without an SFHA designation. The 2024 remapping signals FEMA is actively updating risk models in this county, which means future map amendments remain a live risk to underwriting.

Cap Rate Outlook

The structural housing deficit of 85,258 units needed over the next five years sets a floor under rent demand that the current supply cycle cannot eliminate. As the new construction pipeline in McKinney and Celina gets absorbed, the rent competition for existing landlords will ease, and occupancy rates in those submarkets should recover.

The Globe Life headquarters relocation, the McKinney National Airport commercial flight expansion, and the Silver Line's approach to operational status in Plano are three demand accelerants with real timelines. Each one tilts the rent growth probability positive in its respective corridor over the 2026–2028 window.

The near-term risk to cap rates is further price decompression in outer suburbs if builders continue delivering new product faster than demand absorbs it. At a 4.28% gross yield county-wide, investors entering today are buying a market that requires appreciation to work. The data supports that appreciation case over a five-year or longer hold, but not over 12–18 months.

For investors targeting the tightest possible spread to cash-flow break-even, McKinney below $450,000 and Celina with strong PD-zoned multifamily fundamentals are the only two submarkets where the gross yield leaves room to structure a workable deal after tax, insurance, and vacancy.

Model your specific deal with our investment property calculator to stress-test these numbers against your actual financing terms and target hold period.