CAP//RATE — the insurance-adjusted cap rate map

CAP//RATE

THE INSURANCE-ADJUSTED CAP RATE MAP — WHERE PREMIUMS SILENTLY ATE THE DEAL

SOURCEDMODELED ↗ THE PREMIUM MAP GITHUB

LENS

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Rents: Zillow ZORI where covered (1,345 counties), HUD FY26 3-BR Fair Market Rent elsewhere — basis shown per county. Values: Zillow ZHVI. Premiums: Treasury FIO 2018–22 SOURCED, escalated to 2025 on S&P GMI approved-rate anchors MODELED.

DEAL CALCULATOR — INSURANCE-ADJUSTED UNDERWRITE

LIST PRICE $

RENT $/MO

WHAT THIS INSTRUMENT SHOWS

Investors still underwrite with 2021-era insurance assumptions. This map re-prices every county: the same house, the same rent, the same expense stack — first with its 2021 homeowners premium, then with its current one. The difference is the insurance drag, in basis points of cap rate. In most of the Midwest it is noise. On the Gulf, it is the deal.

METHOD (SHORT FORM)

Effective cap rate = (12×rent − 23% operating stack MODELED − county property tax at the ACS effective rate SOURCED − homeowners premium) ÷ ZHVI value. The 23% stack is 5% vacancy + 8% management + 10% maintenance & capex. Premiums: county means built from the Treasury FIO PCMI public subset (2018–22 SOURCED), escalated 2023→2025 on S&P GMI approved-rate anchors (+12.7%, +10.4%, +6.0% MODELED). When you change the list price, the premium scales proportionally with value MODELED. Full methodology, caveats, and reproduction steps in the README. Companion to The Premium Map.

CAVEATS THAT MATTER

ZHVI is a mid-tier owner index, not investor purchase prices; ZORI is asking rent; FMR is a 40th-percentile rent and understates market in the 1,650 counties where it is the fallback. FIO county premiums are decile-weighted ZIP means and run composition-smoothed. Cap-rate levels are therefore modeled estimates — the cross-county differences and the insurance drag are the point of the instrument.