Rental Property in Nebraska: What the Numbers Actually Look Like

There is a comfortable assumption behind a lot of Midwest rental investing: that the expensive-insurance problem is a coastal problem, and that a landlocked state is a state where you can price the mortgage, add a modest premium, and move on.

Nebraska is the cleanest counterexample in the country. The average Nebraska homeowners premium is $5,037 a year at $300,000 of dwelling coverage — roughly 1.75 times the $2,872 national average at that identical tier, and the second-highest figure in Insurance.com's 50-state table behind only Florida. There is no coast, no hurricane, no earthquake, no wildfire crisis. There is hail, and hail alone is enough.

Then Nebraska does something no coastal state does. It pairs that premium with an effective property tax rate of 1.44%, among the highest in the nation. Most expensive-insurance states are low-tax states, and most high-tax states are cheap to insure. Nebraska is expensive on both lines at once, which is the actual finding of this article.

And behind all of it: Nebraska has no FAIR Plan. No windstorm pool, no state insurer of last resort of any kind. If your carrier non-renews you after a hail claim, the standard advice — go to the state plan — does not exist here.

A note before you start: this is general educational information about how rental property arithmetic works in Nebraska. It is not investment, tax, insurance, or legal advice, and it is not a recommendation about any property. Nebraska insurance is priced per structure — roof age and roof material in particular move it enormously — and property tax is administered county by county and district by district. Talk to a Nebraska CPA about tax treatment, a licensed Nebraska agent about a real quote, and a Nebraska attorney about anything contractual.

1. What a rental costs to buy here

The statewide median sale price is $300,800 (Redfin, February 2026, up 4.3% year over year). County medians sit close to it and below it:

• Douglas County (Omaha): $310,000, effective property tax rate 1.66%, average insurance $4,195
• Lancaster County (Lincoln): $288,711, effective property tax rate 1.45%, average insurance $4,095

Those county insurance figures come from Insure.com at $300,000 dwelling with $100,000 liability, a thinner liability limit than the $300,000 the statewide comparison uses, so read them as the shape of the county spread rather than as directly swappable for the statewide $5,037.

The cash you actually need

Nebraska's documentary stamp tax is 0.332% — the rate rose from $2.32 to $3.32 per $1,000 of value effective July 18, 2026 — and it is customarily paid by the seller, so it does not normally land in a buyer's cash-to-close. A further scheduled decrease back to $2.32 per $1,000 takes effect January 1, 2032. It is negotiable by contract, so confirm which side is paying in your specific deal rather than assuming.

Closing costs run 2% to 4% for a Nebraska buyer, with Rocket Mortgage's point estimate at about 3.64%. This article uses a 3% midpoint.

On the $300,800 statewide median at 25% down:

• Down payment: $300,800 x 0.25 = $75,200
• Loan amount: $225,600
• Closing costs: $300,800 x 3% = $9,024
• Total cash in: $84,224

On price growth: FHFA's most recent published state-level figure has Nebraska at +3.94% year over year, ranked 11th among states. That is genuinely healthy, and it is the one number in this article working in a Nebraska landlord's favor.

2. The two expenses that decide whether it works

Property tax: high, and not the villain

The Tax Foundation puts Nebraska's effective property tax rate on owner-occupied housing at 1.44%. SmartAsset reads 1.42%; sources cluster 1.39% to 1.61%. County rates range enormously across the state's 93 counties, from about 0.45% in Logan County to 1.92% in Hayes County.

On the $300,800 example: $300,800 x 1.44% = $4,331.52 a year, or $360.96 a month.

There is a Nebraska-specific point for landlords that is unusually simple. Nebraska's Homestead Exemption is not a general owner-occupant benefit — it is means-tested and category-restricted to homeowners 65 and older within income limits, qualified disabled individuals, and qualified disabled veterans. Most Nebraska homeowners do not have it either. So unlike Florida or Texas, converting a house from owner-occupied to rental does not typically trigger an exemption loss, because there was usually no exemption to lose. Nebraska also has no assessment cap comparable to Florida's Save Our Homes, so the seller's current tax bill is much less likely to be an artificially suppressed figure that resets on sale. Still compute the tax from the purchase price rather than the listing — but the Nebraska version of that trap is milder than most.

Insurance: the number that makes Nebraska unusual

The reference figure is $5,037 a year at $300,000 of dwelling coverage with a $2,500 typical all-perils deductible. Both of those numbers deserve a sentence.

The $5,037 is the midpoint of two independent 2026 reads that disagree by about 21%: Insurance.com's by-state table at $5,513 and Insurify's projection report at $4,560. Four further sources bracket it — ValuePenguin at $4,370 on $350,000 of coverage, Insure.com at $4,785 on $300,000, NerdWallet at $6,015 on $400,000, and a separate NerdWallet standardized read of $4,815 that appears elsewhere in this site's Nebraska data. Treat $5,037 as the middle of a band running roughly $4,500 to $5,500, and note that every one of those sources places Nebraska far above the national average. The level is not in dispute even where the exact figure is.

The $2,500 flat deductible is 2.5 times the $1,000 that is standard nationally, and it is how Nebraska homeowners have absorbed a market that rose 25% in a single year.

On the example below, $5,037 is 22.1% of gross rent by itself, $419.75 a month, and 1.16 times the property tax bill.

Here is the cleanest way to see what it does. Take the identical $300,800 house at the identical rent and the identical 1.44% tax rate, and change only the premium:

Moving from West Virginia's premium to Nebraska's costs 1.09 percentage points of cap rate and $273.50 a month on the same house. And notice the narrower comparison: the disagreement between Nebraska's own two sources, $4,560 against $5,513, is worth 0.31 points of cap rate. Even the measurement error here is material.

The direction is bad. Insurify's data shows Nebraska going from $3,212 in 2024 to $4,028 in 2025 — a 25% jump — with a further +13% projected for 2026. That is roughly 42% compounded over two years, one of the steepest runs in the country. Underwrite a Nebraska rental with a flat insurance line at your peril.

The wind/hail deductible, and why it is a landlord's problem specifically

This is the mechanism that makes Nebraska's cost visible on a policy, and it is where most out-of-state investors get caught.

A Nebraska policy typically carries two deductibles: the flat all-perils deductible above, and a separate wind/hail deductible expressed as a percentage of Coverage A. Nebraska agency guidance describes 1% to 2% as the usual range. Insurify measures the statewide average at 1.45% of dwelling coverage, which ranks Nebraska ninth nationally.

On a $300,000 dwelling limit:

• 1% = $3,000
• 1.45% = $4,350
• 2% = $6,000

Three things about this that a hurricane deductible does not share:

There is no naming trigger. Nebraska is not on the Insurance Information Institute's list of 19 states plus DC using hurricane or named-storm deductibles. No storm has to be named, no watch has to be issued, no regional warning has to be posted. An ordinary Tuesday thunderstorm invokes it. The Nebraska/Colorado/Wyoming tri-state corner is the industry's "Hail Alley," averaging seven to nine hail days a year, and hail claims account for roughly half of all Nebraska homeowners claims.

There is no statute behind it. This is carrier practice — no mandated offer, no buy-back requirement, no cap. It appears on the declarations page as a percentage, which is exactly why owners discover its dollar value after a claim rather than before.

There is no FAIR Plan behind you. Section 2's headline. Nebraska has no residual market at all — no FAIR Plan, no hail pool, nothing. The Nebraska Department of Insurance maintains a surplus-lines eligible-carrier list at https://doi.nebraska.gov/surplus-lines, and that is the entire fallback. Surplus-lines policies are not protected by the Nebraska guaranty association and are not subject to the same form and rate review as admitted policies. In practical terms, roof condition and roof age become the decisive factors in staying insurable at all.

Now put the deductible against the property. Section 3 works out that this rental produces $7,229.88 of net operating income in a good year:

• A 1% deductible ($3,000) is 41.5% of a full year's NOI
• A 1.45% deductible ($4,350) is 60.2% of a full year's NOI
• A 2% deductible ($6,000) is 83.0% of a full year's NOI

You cannot pass any of it to a tenant. It is not a lease obligation and it is not billable.

And it stacks with the roof settlement basis, which is the second half of the Nebraska problem. Nebraska has no statute prescribing replacement cost or actual cash value; carriers have moved toward ACV or an age-based depreciation schedule on older roofs. On a $300,000 dwelling with a 1.45% wind/hail deductible and an ACV roof, an owner can absorb a $4,350 deductible and several thousand more in withheld depreciation on the same hail claim. A typical roof replacement runs $30,000 to $50,000. In March 2026 the FHFA also relaxed Fannie Mae and Freddie Mac requirements so that ACV roof coverage can satisfy a lender, removing a constraint that had kept replacement-cost roof coverage in place by default.

Finally: a rental is not insured on a homeowners form. You need a landlord policy — a dwelling fire form with loss-of-rents coverage — priced for the specific address. The figures above are the right anchor for the level of cost in this state. They are not your quote.

3. A full worked example

The property. A single-family house at the Nebraska statewide median of $300,800.

The rent — read this carefully. This site does not carry rent data. The $1,900 a month used below is an assumption chosen to be plausible for a house at that price. It is not a market observation. Pull three to five real comparable listings for the specific neighborhood and substitute the actual number.

The other assumptions:

• Vacancy: 8% of gross rent (roughly one month of turnover a year)
• Property management: 10% of collected rent
• Repairs and maintenance: 5% of gross scheduled rent
• Capital reserve: 5% of gross scheduled rent
• Financing: 25% down, 30-year fixed at 7.00% — the rate is an assumption, not a quote
• No HOA

Step 1 — income

• Gross scheduled rent: $1,900 x 12 = $22,800
• Vacancy loss: $22,800 x 8% = $1,824
• Effective gross income: $22,800 - $1,824 = $20,976

Step 2 — operating expenses

Management is charged on rent actually collected, not scheduled rent:

• Management: $20,976 x 10% = $2,097.60
• Property tax: $300,800 x 1.44% = $4,331.52
• Insurance: $5,037
• Maintenance: $22,800 x 5% = $1,140
• Capital reserve: $22,800 x 5% = $1,140
• Total operating expenses: $13,746.12

Expense ratio: $13,746.12 / $20,976 = 65.53% of collected rent — well above the 35% to 55% band most rentals land in. Tax and insurance together are $9,368.52, or 68.2% of the entire expense line.

Step 3 — net operating income and cap rate

• NOI = $20,976 - $13,746.12 = $7,229.88
• Cap rate = $7,229.88 / $300,800 = 2.40%

The mortgage is deliberately absent from that figure. Cap rate exists to compare properties independently of how they are financed; putting debt service into it is the most common error in this whole exercise, and it makes two identical houses look like different investments because one buyer put more down.

Step 4 — debt service and cash flow

Loan: $300,800 x 75% = $225,600. At 7.00% over 30 years, principal and interest is $1,500.92 a month, or $18,011.04 a year.

• Annual cash flow = $7,229.88 - $18,011.04 = -$10,781.16
• Monthly cash flow = -$898.43
• Debt service coverage ratio = $7,229.88 / $18,011.04 = 0.40

Step 5 — cash-on-cash return

• Cash invested: $84,224 (Section 1)
• Cash-on-cash = -$10,781.16 / $84,224 = -12.80%

Rate sensitivity, since 7.00% was an assumption

• At 6.50%: P&I $1,425.95/mo, annual cash flow -$9,881.52
• At 7.00%: P&I $1,500.92/mo, annual cash flow -$10,781.16
• At 7.50%: P&I $1,577.43/mo, annual cash flow -$11,699.28

A full point of rate is worth about $1,817.76 a year. The two-year insurance run — from $3,212 to a projected $4,560 in Insurify's series — was worth more than that, and nobody negotiated it.

The simplest version of the same finding

Add up the four bills a lender escrows:

• Principal and interest: $1,500.92
• Property tax: $4,331.52 / 12 = $360.96
• Insurance: $5,037 / 12 = $419.75
• Total: $2,281.63 a month

Against $1,900 of assumed rent, that is -$381.63 a month before vacancy, management, or a single repair. The naive "does the rent cover the mortgage" check already fails, and it fails because $780.71 of that monthly payment is tax and insurance — more than half of the P&I figure again.

4. The expenses people leave out

Vacancy, management, and capital reserves do not arrive as invoices. Nobody bills you for the month the house sits empty, or for the roof you will need in nine years, or — if you self-manage — for your own weekends. So they fall out of the mental model, and the property looks better than it is.

Here is the same house with those three removed and everything else identical:

The three omissions are worth $5,061.60 a year — $1,824 of vacancy, $2,097.60 of management, $1,140 of reserve. They flatter the cap rate by 1.69 percentage points and hide 47.0% of the annual loss. A reader looking only at the left column sees a house losing $477 a month. It is losing $898.

Vacancy. Eight percent is roughly one month a year, which is what a single clean turnover costs between move-out and the next tenant's first full month. Setting it to zero assumes the house is never empty, including between tenants.

Management. Set it to zero and the return is paying you for your own labor rather than for the property. Self-managing this house saves $2,097.60 a year, lifting NOI to $9,327.48, the cap rate to 3.10%, and cash flow to -$723.63 a month. A real saving. It does not fix the deal, and it stops being free the moment you stop being available.

Capital reserves. In Nebraska the roof reserve is not a generic line item — it is the specific line item. Hail is half of all claims in the state, carriers are moving to ACV settlement on older roofs, and there is no FAIR Plan to catch you if enough claims make you uninsurable. The 5%-of-rent convention above sets aside $1,140 a year against a $30,000 to $50,000 roof. A harsher and equally common convention is 1% of purchase price a year for maintenance and 1% for capital, which here is $3,008 each. Run that way: total operating expenses $17,482.12, expense ratio 83.34%, NOI $3,493.88, cap rate 1.16%, cash flow -$1,209.76 a month.

So the honest cap-rate range for this property is 1.16% to 2.40% depending on which reserve convention you choose. Given Nebraska's hail exposure, the harsher one is not obviously wrong.

What would actually have to be true

The rent this property needs. For cash flow to reach zero at this price and this financing, gross scheduled rent must reach about $37,609.29 a year, or $3,134.11 a month — 1.04% of purchase price per month. That is where the old "1% rule" comes from. The assumed $1,900 rent is 0.63% of price.

The price this rent supports. Hold rent at $1,900 and solve for the price at which cash flow reaches zero with 25% down: about $110,741, roughly 37% of the statewide median.

The down payment this price needs. Keep the $300,800 price and the $1,900 rent and solve for the loan the NOI can service: about $60,249 — which means roughly $240,551 down, or 80% of the price. At that point you have bought a 2.40% cap rate almost entirely with cash.

Those three numbers are demanding because tax and insurance together take $9,368.52 before anything else happens. Cut insurance to West Virginia's level and the breakeven rent falls by roughly $376 a month.

5. What actually varies by county here

Property tax is where Nebraska's county spread bites, and it is the reverse of the Florida pattern where insurance did all the work.

Take the identical $300,800 house at $1,900 rent and apply each county's actual tax rate and average premium:

The Douglas-to-Lancaster tax gap alone — 1.66% against 1.45% — is $631.68 a year on this house. Statewide, the county range from Logan's 0.45% to Hayes's 1.92% would swing the tax bill from $1,353.60 to $5,775.36, a $4,421.76 spread that is worth 1.47 percentage points of cap rate on its own. In Nebraska, the county you buy in is a bigger property-tax decision than in most states.

Now run each county at its own median price and its own assumed rent:

• Douglas County at $310,000 with an assumed $1,950 rent, 1.66% tax and $4,195 insurance: cash in $86,800, NOI $7,694.20, cap rate 2.48%, cash flow -$905.65 a month, DSCR 0.41. Breakeven rent: $3,194.02 a month.
• Lancaster County at $288,711 with an assumed $1,850 rent, 1.45% tax and $4,095 insurance: cash in $80,839.08, NOI $7,880.29, cap rate 2.73%, cash flow -$783.91 a month, DSCR 0.46. Breakeven rent: $2,926.80 a month.

Two further things to check for a specific address, neither of which is in a county average:

The taxing district, not just the county. Nebraska property tax is levied by overlapping districts — school, county, city, community college, natural resources district, fire, sanitary improvement district. Two houses a mile apart in Douglas County can carry meaningfully different levies. Pull the actual parcel's levy from the county assessor.

SID assessments. Sanitary and Improvement Districts are common in newer suburban development around Omaha, carry their own levy on top of the county rate, and are not in any effective-rate average.

6. Financing a rental is not financing a home

These are the standard mechanisms across the mortgage market. Any specific rate or overlay is your lender's, not this article's.

Down payment. Conventional financing on a non-owner-occupied one-unit property generally requires more equity than an owner-occupied purchase — 20% is usually the floor and 25% the common expectation, which is why this article models 25%. FHA and VA are not available for a property you do not occupy. Nebraska's own first-time buyer programs are explicitly out: NIFA's First Home Program requires an owner-occupied primary residence. The genuine exception is house hacking — a two-to-four-unit property you live in one unit of qualifies for owner-occupied programs.

Rate. Investment-property loans price above owner-occupied loans. Fannie Mae and Freddie Mac apply loan-level price adjustments for investment occupancy that scale with loan-to-value and credit score; lenders pass those through as rate or points. The 7.00% modeled above is an assumption.

Reserves. Lenders typically require post-closing reserves — months of principal, interest, taxes, and insurance held in liquid assets — scaling with the number of financed properties you own. In Nebraska you want those reserves regardless of the lender's requirement, because Section 2's wind/hail deductible is a four-to-five-figure cash event that can arrive from a routine thunderstorm.

The 2026 conforming loan limit for a one-unit property is $832,750 in both Douglas and Lancaster Counties — neither is an FHFA-designated high-cost area, and no Nebraska county is. At Nebraska prices, conforming limits are not the constraint.

Rental income counting. Lenders credit a portion of market or lease rent toward qualifying, not all of it. Ask what percentage yours uses and whether they need an appraiser's rent schedule.

DSCR loans. A debt service coverage ratio loan qualifies the property rather than the borrower, comparing property income to debt service and largely skipping personal income documentation. The trade is a higher rate, a larger down payment, frequent prepayment penalties, and a minimum DSCR — commonly stated at or above 1.0 and often above 1.2.

Look at Section 3. This property's DSCR is 0.40, and even with vacancy, management, and reserves stripped out it is 0.68. It does not qualify at 75% loan-to-value. The DSCR underwriting is telling you the same thing the cash flow line is.

Insurance is a closing condition. Get a bindable landlord quote for the specific address during your inspection period, and get the roof age in writing before you do. In a state with no FAIR Plan, an uninsurable roof is not a pricing problem — it is a dead deal.

7. What to check before you buy in this state

Insurance, first, before anything else.

1. Get a bindable landlord policy quote for the specific address — not a homeowners quote, not a statewide average.
2. Read the wind/hail deductible off the quote and multiply it into dollars against the dwelling limit. Write that number down. It is your minimum cash reserve. Remember it can trigger on an ordinary thunderstorm.
3. Ask explicitly whether the roof settles at replacement cost or actual cash value, and whether a roof payment schedule applies. This is the single largest variable in what a Nebraska claim actually pays.
4. Get the roof age and roof material in writing. Impact-resistant shingles carry premium credits with many carriers; ask.
5. Confirm the policy carries loss of rents coverage and find out how many months it pays.
6. Understand that if you are non-renewed, there is no Nebraska FAIR Plan. Your fallback is the surplus-lines list at https://doi.nebraska.gov/surplus-lines, without guaranty-association protection.
7. Budget insurance as a rising line. Nebraska has compounded roughly 42% over two years.

Property tax, from the parcel rather than the state average.

1. Pull the actual parcel levy from the county assessor, including every overlapping district. The statewide 1.44% is an average across a 0.45%-to-1.92% county range.
2. Check for a Sanitary and Improvement District levy, common in newer Omaha-area subdivisions.
3. Do not expect a homestead exemption to change anything — Nebraska's is age-, disability-, and income-restricted, and a rental never qualifies.

The rent, from the market.

1. Pull three to five genuine comparable rentals for the specific neighborhood and note how long they sat.
2. Divide monthly rent by purchase price. Section 4's breakeven for this example was 1.04%. Knowing where you sit against that tells you immediately whether you are buying cash flow or betting on appreciation — and Nebraska's last published appreciation figure, +3.94%, is at least a real number to bet on.

The law, from the statute rather than from an article.

1. Do not take eviction timelines, notice periods, security-deposit handling, or late-fee rules from a blog — including this one. Nebraska residential tenancies are governed by the Nebraska Uniform Residential Landlord and Tenant Act, Neb. Rev. Stat. sections 76-1401 through 76-1449. Read it at the Legislature's own site, https://nebraskalegislature.gov/laws/, or have a Nebraska attorney walk you through it. Security-deposit handling in particular carries specific requirements that are easy and expensive to get wrong.
2. Check city and county rules separately: Omaha and Lincoln both have their own rental registration, inspection, and occupancy requirements that the state act does not cover.

The money and the tax treatment.

1. Size your cash reserves against the wind/hail deductible in dollars, not against a month of mortgage payments.
2. Ask a Nebraska CPA how the property will be taxed, including depreciation, passive activity loss rules, and Nebraska's own income tax treatment of rental income.

What to do next

Every figure above came from a data file or was computed in front of you. Re-run all of it with your own numbers.

The Nebraska rental analysis calculator does exactly the work in Sections 3 and 4 — enter your price, your real local rent, and your own vacancy, management, and reserve assumptions, and it produces NOI, cap rate, cash flow, cash-on-cash, and DSCR. It also warns you when you have left out the expenses Section 4 is about, rather than letting them pass silently.

Because Nebraska is one of the few states where insurance and property tax are both expensive, start with the Nebraska insurance premium estimator — it will get you closer to a real figure than the $5,037 statewide midpoint, and it converts the 1%, 1.45%, and 2% wind/hail deductibles into actual dollars rather than leaving them as percentages on a declarations page.

The Nebraska mortgage payment calculator gives you the principal and interest figure for the rate you are actually quoted, which Section 3 shows is worth about $1,817.76 a year per point.

This article is general educational information about rental property arithmetic in Nebraska, based on figures current as of August 2026. It is not investment, tax, insurance, or legal advice. The rent figures in the worked examples are stated assumptions, not market data. Insurance premiums, property tax levies, and mortgage rates change and vary by property. Consult a Nebraska CPA, a licensed Nebraska insurance agent, and a Nebraska real estate attorney before buying.