Rental Property in Vermont: What the Numbers Actually Look Like

Vermont has the cheapest homeowners insurance in the United States. Two independent surveys, both quoting $300,000 of dwelling coverage, put it at $1,017 and $1,008 — agreement within 1%, which almost never happens, and both rank Vermont either first or second cheapest nationally.

Vermont also charges a landlord 3.62% of the purchase price in transfer tax on the way in, against a blended 1.01% for an owner-occupant. On the statewide median that is $15,337.94 instead of $4,288.39 — an $11,049.55 penalty, paid in one day at closing, and in Vermont the buyer customarily pays it.

That $11,049.55 is 10.9 times the annual insurance premium. You could insure this house for eleven years for the difference.

If you take one thing from this article: in Vermont, the expensive lines are the ones that only apply to you. The transfer tax rate that applies to a rental, and the education property tax rate that applies to a rental, are both different from — and higher than — the published figures a buyer sees. Section 1 and Section 2 rebuild both.

There is a third thing, and it is the one that catches out-of-state investors hardest: cheap to insure is not cheap to rebuild. Vermont's construction cost is $245 per square foot against Florida's $210. The premium is a statement about risk. The rebuild cost is a statement about the building, and they are not the same number.

A note before you start: this is general educational information about how rental property arithmetic works in Vermont. It is not investment, tax, insurance, or legal advice, and it is not a recommendation about any property. Talk to a Vermont CPA about tax treatment, a licensed Vermont insurance agent about a real quote, and a Vermont real estate attorney about anything contractual — Vermont settlements are attorney-conducted.

1. What a rental costs to buy here

The statewide median sale price is $423,700 (Redfin, June 2026 — $423,674, down 2.0% year over year, rounded). Rocket Mortgage independently cites a similar figure near $427,000.

County medians and rates diverge enormously:

• Chittenden County (Burlington): $524,000, effective property tax rate 1.44%, average insurance $1,069
• Rutland County: $303,300, effective property tax rate 1.81%, average insurance $947

The cash you actually need — and the number that defines Vermont

Vermont's property transfer tax has a separate, much higher rate for property that is not a principal residence, and a rental is squarely in that category. The Vermont Department of Taxes publishes the structure as:

• Principal residence: 0.5% on the first $200,000 of value, then the General Tax Rate of 1.25% plus a 0.22% Clean Water Surcharge — 1.47% combined — on value above $200,000.
• A separate lower tier (Exemption 99) where a principal residence purchase is assisted by VHFA, USDA, or VHCB financing: the first $250,000 exempt, 1.47% above.
• Non-principal residences: 3.40%, or 3.62% with the Clean Water Surcharge.

Work both out on the $423,700 median:

• Owner-occupant: ($200,000 x 0.5%) + ($223,700 x 1.47%) = $1,000 + $3,288.39 = $4,288.39 (a blended 1.01%)
• Investor: $423,700 x 3.62% = $15,337.94

The difference is $11,049.55, and the multiple is 3.58x.

This is the single largest landlord-specific penalty in this entire series, and it is charged at the door. It is not recoverable, it is not deductible against the operating line, it does not vary with how well the property performs, and Vermont's custom puts it on the buyer rather than the seller.

• Closing costs: 3% to 5%. Rocket Mortgage puts the Vermont buyer average near 4.31% — among the higher state averages it tracks. This article uses 4%, excluding the transfer tax, which is broken out separately.

On the $423,700 statewide median at 25% down:

• Down payment: $423,700 x 0.25 = $105,925
• Loan amount: $317,775
• Closing costs: $423,700 x 4% = $16,948
• Transfer tax at the non-principal-residence rate: $423,700 x 3.62% = $15,337.94
• Total cash in: $138,210.94

Read the last two lines together: $32,285.94 of transaction cost on a $423,700 house — 30.5% on top of the down payment. Buying the identical house as an owner-occupant would cost $11,049.55 less.

For scale against a state with no transfer tax: the same purchase in Idaho or Montana carries $0 of transfer tax.

On price growth, FHFA's purchase-only index has Vermont at +4.95% year over year through Q1 2026 — the third-highest of any state, behind only Illinois and Alaska. That is a genuine tailwind, and among the states in this batch only Alaska's 5.5% is stronger.

2. The two expenses that decide whether it works

Property tax: high, and higher than published for a rental

The Tax Foundation puts Vermont's effective property tax rate on owner-occupied housing at 1.51%. SmartAsset reads 1.42% and calls it the sixth-highest in the country, driven substantially by Vermont's statewide education property tax. Sources cluster 1.42% to 1.51%; our data uses 1.47% as the midpoint.

On the $423,700 example: $423,700 x 1.47% = $6,228.39 a year, or $519.03 a month.

That is 25.9% of gross rent and 52.6% of the operating expense line — a majority, like New Hampshire's.

Now the part that is specific to a landlord. Vermont has no ad-valorem homestead exemption in the Florida or Texas sense. Instead, all Vermont property is classified for the statewide education property tax as either "homestead" or "nonhomestead," and the two are taxed at different rates. A homestead — a Vermont resident's owned and occupied principal dwelling and surrounding parcel — gets the lower homestead education tax rate. The nonhomestead rate applies to second homes, rentals, and commercial property.

This is not automatic in either direction. Vermont law requires an owner to file a Homestead Declaration (Form HS-122) annually by the April filing deadline to be assessed at the homestead rate. The separate, income-based Vermont Property Tax Credit — filed on the same HS-122 form, with a household income limit of $115,400 for tax year 2025 and maximums of $5,600 on the education portion and $2,400 on the municipal portion — likewise requires a Homestead Declaration and year-round Vermont domicile.

A rental gets neither. It is nonhomestead by definition, and the property tax credit is unavailable.

The 1.47% figure used in Section 3 is measured on owner-occupied housing. Our data does not carry Vermont's nonhomestead education rate, and this article will not invent one. What it will tell you is the shape of the answer: your education rate is the higher of the two, your bill is above the figure below, and the $6,228.39 in Section 3 is a floor rather than an estimate.

Get the town's current homestead and nonhomestead education rates plus the municipal rate, and recompute. In Vermont this is not optional diligence — it is the difference between a right answer and a systematically low one.

Insurance: the cheapest in the country, and it barely matters

The reference figure is $1,013 a year at $300,000 of dwelling coverage with a $1,000 all-perils deductible — the average of two surveys that both quote at exactly that tier:

• Insurance.com: $1,017 ($300,000 dwelling / $300,000 liability / $1,000 deductible, as of August 25, 2026)
• Insurify: $1,008 ($300,000 dwelling / $1,000 deductible / $25,000 personal property / $300,000 liability, drawn from more than 180 carriers, as of August 20, 2026)

They agree to within 1% — the tightest premium figure in this dataset, and both rank Vermont either the cheapest or second-cheapest state in the country. Directional corroboration at other coverage levels: NerdWallet reads $1,170 at $400,000, and ValuePenguin $929 at $350,000.

Vermont's low figure reflects no hurricane exposure, limited tornado and hail exposure, modest home values, and low population density — not a data gap.

That is $84.42 a month and only 8.6% of the operating expense line. Here is what the whole published span is worth:

The disagreement between Vermont's own two sources rounds to zero points of cap rate. Compare that with Section 5's county tax spread, worth 0.34 points. In Vermont, the insurance quote is the least consequential number in the analysis and the town's education rate is the most.

The bottom two rows are there for scale. Swapping Vermont's premium for Florida's would take this property from a 2.41% cap rate to 0.65% — which is the same finding read backwards, and a reminder that Vermont's cheapness is real and worth something. It is just not worth spending diligence time on.

Insurify projects +0.6% for Vermont in 2026 against a national +4%.

There is no catastrophe deductible — and the actual catastrophe peril is not covered at all

Checked, not skipped. Vermont is landlocked with no hurricane or named-storm exposure, is absent from the NAIC's list of jurisdictions with hurricane or named-storm deductibles, and sits well outside the Plains hail belt where percentage wind/hail deductibles have become common. No source describes a separate percentage deductible as an ordinary feature of a Vermont policy.

But the peril that actually drives Vermont catastrophe losses is riverine and flash flooding off mountain runoff — the July 2023 and July 2024 events being the recent examples — and flooding is excluded from a standard homeowners policy entirely.

That distinction matters enormously to a landlord, and it is the opposite of a percentage deductible:

• A hurricane deductible means the loss is covered and you pay a large retention. You can reserve against a known number.
• A flood exclusion means the loss is not covered at all. There is no retention to reserve against, because there is no coverage above it.

Vermont homeowners in flood-exposed towns need a separate NFIP or private flood policy, which carries its own deductible and its own limits. That policy is a different product, it is not in the $1,013 above, and it is the single largest unmodeled cost in a Vermont rental analysis.

Two practical consequences:

Flood zone is a parcel-level question, not a town-level one. Vermont's flooding follows rivers and steep drainages, and being outside a mapped high-risk zone is a statement about a flood map, not about whether water can reach the building. The 2023 and 2024 events damaged property in places that had not flooded in living memory.

Loss of rents does not help if the loss is not covered. Confirm that your flood policy — not just your property policy — addresses rental income interruption, and understand that NFIP dwelling policies are structured differently from a commercial or landlord property policy.

There is no FAIR plan. This is confirmed, not assumed: Vermont does not operate a FAIR plan or any state-backed insurer of last resort. A Vermont homeowner declined by the admitted market has to work the voluntary market harder — regional and mutual carriers are unusually well represented here — and failing that, excess and surplus lines through a surplus lines broker. In practice this is a much smaller problem here than in wildfire or coastal states: Vermont is among the cheapest and least distressed homeowners markets in the country, and declination pressure is driven by property condition and rural fire protection class rather than by carriers withdrawing from a catastrophe peril. For a landlord buying an old rural Vermont house a long way from a fire station, that sentence is the one to reread.

Roof settlement, and one of the best matching rules in the country. No Vermont statute or regulation sets a roof settlement basis, but Vermont has an unusually well-drafted matching rule, and — rarely — it is not limited to replacement-cost policies.

Section 8(A)(6) of Department of Financial Regulation Regulation I-79-2 (Fair Claims Practices, revised effective July 1, 2018), titled "Matching of Exterior and Interior Partial Losses," provides that when a covered loss requires replacement of an item and the replacement does not match adjacent items in quality, colour, or size, the insurer must replace such items with material of like kind and quality so as to conform to a reasonably uniform appearance within the same line of sight, taking natural breaks into account, and the insured bears no cost over the applicable deductible.

Read the scope carefully: "within the same line of sight, taking into account natural breaks." That protects the visible plane, not necessarily the whole roof. It is a real and useful protection, and it is narrower than "replace the roof." No Vermont matching caselaw is reported.

What decides the payout is still roof age and the endorsement attached. Vermont's exposure is snow load, ice damming, and wind rather than hail, and carriers commonly require inspection or certification once a roof passes roughly 20 years, then either non-renew or continue coverage only on an actual-cash-value roof settlement.

Rebuild cost — the number that contradicts the premium. Vermont construction runs about $245 per square foot, within a published band of $180 to $310 shared with South Carolina, Virginia, and Wisconsin — a grouping with no regional logic to it, which is what makes clear these are cost buckets rather than surveyed state averages.

Set that against the Sun Belt:

• An 1,800 square foot Vermont house: $441,000 to rebuild
• The same house in Florida at $210 per square foot: $378,000
• A $63,000 difference, in Vermont's disfavour

Vermont's premium is roughly 88% below Florida's. Its rebuild cost is 17% above Florida's. Those are facts about two different things — the probability of a large loss, and the cost of fixing one — and a landlord who reads a cheap premium as a cheap building will set the dwelling limit far too low. At $245 per square foot, a 1,600 square foot house is already $392,000 to rebuild, well above a $300,000 dwelling limit.

3. A full worked example

The property. A single-family house at the Vermont statewide median of $423,700.

The rent — read this carefully. This site does not carry rent data. The $2,000 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, because Section 4 shows how sensitive the answer is to it.

The other assumptions:

• Vacancy: 8% of gross rent
• Property management: 10% of collected rent
• Repairs and maintenance: 5% of gross scheduled rent
• Capital reserve: 5% of gross scheduled rent
• Property tax at the 1.47% homestead-measured effective rate, which Section 2 explains is a floor for a rental
• Financing: 25% down, 30-year fixed at 7.00% — an assumption, not a quote
• No flood policy. Section 2 explains why that is an assumption you should be uncomfortable with; price one for your specific parcel
• No HOA, no plowing contract, no heating fuel obligation

Step 1 — income

• Gross scheduled rent: $2,000 x 12 = $24,000
• Vacancy loss: $24,000 x 8% = $1,920
• Effective gross income: $24,000 - $1,920 = $22,080

Step 2 — operating expenses

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

• Management: $22,080 x 10% = $2,208
• Property tax: $423,700 x 1.47% = $6,228.39
• Insurance: $1,013
• Maintenance: $24,000 x 5% = $1,200
• Capital reserve: $24,000 x 5% = $1,200
• Total operating expenses: $11,849.39

Expense ratio: $11,849.39 / $22,080 = 53.67% of collected rent — at the top of the 35% to 55% band most rentals land in, and that is before Section 2's nonhomestead adjustment. Property tax is 52.56% of that expense line; insurance is 8.55%.

Step 3 — net operating income and cap rate

• NOI = $22,080 - $11,849.39 = $10,230.61
• Cap rate = $10,230.61 / $423,700 = 2.41%

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: $423,700 x 75% = $317,775. At 7.00% over 30 years, principal and interest is $2,114.17 a month, or $25,370.04 a year.

• Annual cash flow = $10,230.61 - $25,370.04 = -$15,139.43
• Monthly cash flow = -$1,261.62
• Debt service coverage ratio = $10,230.61 / $25,370.04 = 0.40

Step 5 — cash-on-cash return

• Cash invested: $138,210.94 (Section 1, including the $15,337.94 non-principal-residence transfer tax)
• Cash-on-cash = -$15,139.43 / $138,210.94 = -10.95%

Note what the transfer tax does here. It does not change NOI, the cap rate, the cash flow, or the DSCR — it changes only the denominator. So it makes the cash-on-cash look milder while making you $11,049.55 poorer than an owner-occupant buying the same house. That is a good demonstration of why cash-on-cash alone is a poor summary statistic: a ratio can improve for a bad reason.

Rate sensitivity, since 7.00% was an assumption

• At 6.50%: P&I $2,008.55/mo, annual cash flow -$13,871.99
• At 7.00%: P&I $2,114.17/mo, annual cash flow -$15,139.43
• At 7.50%: P&I $2,221.93/mo, annual cash flow -$16,432.55

A full point of rate is worth about $2,560.56 a year — roughly 41% of the property tax bill, and about 2.5 times the insurance premium.

The simplest version of the same finding

Add up the four bills a lender escrows:

• Principal and interest: $2,114.17
• Property tax: $6,228.39 / 12 = $519.03
• Insurance: $1,013 / 12 = $84.42
• Total: $2,717.62 a month

Against $2,000 of assumed rent, that is -$717.62 a month before vacancy, management, or a single repair. Of the $603.45 in tax and insurance, $519.03 is tax — six times the insurance line.

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 $5,328 a year — $1,920 of vacancy, $2,208 of management, $1,200 of reserve. They flatter the cap rate by 1.26 percentage points and hide 35% of the annual loss.

Like New Hampshire, Vermont is a state where the stripped-down analysis does not announce itself with an absurdly low expense ratio: 35.17% sits just inside the normal 35% to 55% band. The heavy tax line fills the hole the omissions leave, and a bad analysis looks plausible. In high-property-tax states you cannot rely on the expense ratio to catch a missing input. Check the inputs directly.

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. Vermont has a specific version of this: in the ski and lake towns, the highest-demand weeks are short-term weeks, and a property underwritten as a year-round rental but operated seasonally is being described by the wrong model entirely — and, per Section 2, is still nonhomestead either way.

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 $2,208 a year, lifting NOI to $12,438.61 and the cap rate to 2.94%, with cash flow improving to -$1,077.62 a month and DSCR to 0.49. It is a real saving. It is also the smallest management fee in this series, because Vermont's rent is the lowest — which means self-management buys you less here than anywhere.

Capital reserves. Roofs, HVAC, water heaters, and flooring have known lives, and Vermont's snow load, ice damming, and freeze-thaw shorten several of them. And Section 2's rebuild figure is the reason a price-based reserve convention is easy to defend in this state: at $245 per square foot, Vermont buildings cost real money to fix, whatever the premium says.

The 5%-of-rent convention used above is one option. A harsher and equally common convention is 1% of purchase price a year for maintenance and 1% for capital, which here is $4,237 each. Run that way: total operating expenses $17,923.39, expense ratio 81.17%, NOI $4,156.61, cap rate 0.98%, cash flow -$1,767.79 a month, DSCR 0.16.

So the honest cap-rate range for this property is 0.98% to 2.41%, before the nonhomestead education rate pulls the top of that range down further. Choose a convention deliberately.

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 $44,795.88 a year, or $3,732.99 a month — 0.88% of purchase price per month, tied with New Hampshire for the highest breakeven in this series. The assumed $2,000 rent is 0.47% of price, or 54% of what the property needs.

The price this rent supports. Hold rent at $2,000 and solve for the price at which cash flow reaches zero with 25% down: about $220,697, roughly 52% of the statewide median.

The down payment this price needs. Keep the $423,700 price and the $2,000 rent and solve for the loan the NOI can service: about $128,145 — which means roughly $295,555 down, or 70% of the price.

The one thing genuinely working in this property's favour is Section 1's last line: +4.95% appreciation, third-highest of any state. Vermont is the state in this batch where the "buying appreciation, not cash flow" argument has an actual print behind it. That is an argument, not a plan — and it is worth remembering that a 3.62% transfer tax on the way in eats most of a year's appreciation before you have collected a dollar of rent.

5. What actually varies by county here

Vermont has the widest county tax spread in this series, and it is the section that matters most.

Take the identical $423,700 house at $2,000 rent and apply each county's actual tax rate and its own average insurance:

A $1,567.69 a year swing in tax between Chittenden and Rutland on the same house, worth 0.34 percentage points of cap rate. Rutland's cheaper insurance — $122 a year less than Chittenden's — recovers almost none of it.

Put the two spreads side by side, because this is the practical takeaway for Vermont:

• Insurance disagreement across every published source: effectively 0 points of cap rate
• County tax spread: 0.34 points of cap rate

Now run each county at its own real median price:

• Chittenden at $524,000 with a $2,300 assumed rent, 1.44% tax and $1,069 insurance: NOI $11,478.20, cap rate 2.19%, cash flow -$1,658.12 a month, cash-on-cash -11.64%, DSCR 0.37.
• Rutland at $303,300 with a $1,600 assumed rent, 1.81% tax and $947 insurance: NOI $7,540.87, cap rate 2.49%, cash flow -$884.99 a month, cash-on-cash -10.73%, DSCR 0.42.

Rutland wins on every ratio despite the higher tax rate, because its median price is 42% lower while its assumed rent is only 30% lower. Chittenden's Burlington premium does not survive Chittenden's price, which is the same pattern this series finds in Portland, Boise, and Missoula.

Note also that both cash-on-cash figures already carry the 3.62% transfer tax on their own county's price — $18,968.80 in Chittenden, $10,979.46 in Rutland.

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

The town's homestead and nonhomestead education rates, plus the municipal rate. Vermont's education property tax is statewide but applied through town-level rates, and the homestead/nonhomestead distinction sits inside it. This is the number Section 2 says you must go and get.

Flood zone and the parcel's drainage. Vermont's flooding is riverine and steep-terrain flash flooding, and it is not covered by any homeowners policy. A county rate tells you nothing about it.

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. The genuine exception is house hacking: a two-to-four-unit property you live in one unit of qualifies for owner-occupied programs.

And in Vermont, house hacking changes the transfer tax too. The 3.62% non-principal-residence rate and the 1.01%-blended principal-residence rate are separated by occupancy. That is an $11,049.55 difference on a median-priced house — larger than most of the operating expenses in Section 3 combined. Anyone weighing owner-occupancy against a pure rental in Vermont should price that line explicitly rather than treating it as a closing-cost detail.

Conforming loan limit. Both Chittenden and Rutland carry the 2026 one-unit baseline of $832,750, well above both county medians.

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. Get a real quote.

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 Vermont, size them against two things the property policy will not pay for: a flood, which is excluded outright, and a Vermont winter, where a frozen pipe or failed heating system is the realistic five-figure event and much of the slow damage reads as maintenance rather than a covered loss.

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 0.61. It does not qualify at 75% loan-to-value. The DSCR underwriting is telling you the same thing the cash flow line is.

Settlement is attorney-conducted in Vermont. Engage counsel early, and have them confirm the transfer tax rate that will apply to your transaction before you are at the closing table with it.

7. What to check before you buy in this state

The transfer tax, before you write the offer.

1. Confirm with your attorney that the non-principal-residence rate of 3.40% plus the 0.22% Clean Water Surcharge applies to your purchase. On the median that is $15,337.94 against $4,288.39.
2. Budget it as cash at closing. Vermont custom puts it on the buyer.
3. If you are considering house hacking, price the rate difference explicitly. It is $11,049.55 on a median-priced house.

Property tax, from the town.

1. Get the town's homestead education rate, nonhomestead education rate, and municipal rate. A rental pays the nonhomestead rate, and the 1.47% statewide effective figure is measured on homestead property.
2. Confirm whether the seller filed a Homestead Declaration (HS-122). Their bill reflects the homestead rate; yours will not.
3. Recompute the tax from the town's listers' assessment rather than from the seller's bill, and ask when the town last reappraised.

Insurance, quickly — and flood, carefully.

1. Get a bindable landlord policy quote for the specific address — a dwelling fire form with loss-of-rents coverage. One quote settles it; Section 2 shows the published range is worth effectively nothing in cap-rate terms.
2. Get a flood quote separately, for the specific parcel, whatever the flood map says. This is the largest unmodeled cost in a Vermont analysis. The July 2023 and July 2024 events reached property that had not flooded in living memory.
3. Ask whether the flood policy addresses rental income interruption. Your property policy's loss-of-rents coverage does not respond to an excluded peril.
4. Confirm the dwelling limit against replacement cost, not purchase price. At $245 per square foot, a 1,600 square foot house is already $392,000 to rebuild and an 1,800 square foot house is $441,000.
5. Get the roof age in writing and ask whether it settles at replacement cost or actual cash value. Twenty years is the threshold that matters.
6. Ask about the property's fire protection class and distance to a responding station. In Vermont that is a leading declination reason, and there is no FAIR plan.
7. Ask specifically about ice dam coverage — the damage is usually covered, the removal usually is not.

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 0.88% and the assumption was 0.47%.
3. If it is a ski or lake town property, decide explicitly whether you are underwriting year-round tenancy or short-term rental. They are different businesses and Section 3 only describes the first.

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. Vermont residential rental agreements are governed by 9 V.S.A. Chapter 137. Read it at the Legislature's own site, https://legislature.vermont.gov/statutes/, or have your Vermont real estate attorney walk you through it. Security-deposit handling in particular carries specific notice requirements that are easy to get wrong and expensive to get wrong.
2. Check the town separately: rental registration, housing code and health inspection, lead paint obligations in Vermont's old housing stock, and short-term rental restrictions are all municipal. Burlington in particular has legislated actively.

The money and the tax treatment.

1. Ask a Vermont CPA how the property will be taxed, including depreciation, passive activity loss rules, and treatment on sale. Vermont levies a state income tax, so this conversation matters — and ask specifically how the transfer tax is treated for basis purposes.

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 — and in Vermont, with the town's nonhomestead education rate rather than the statewide effective rate.

The Vermont 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 — which matters more here than in most states, because Section 4 shows the expense ratio does not flag the omission when the tax line is this large.

The Vermont insurance premium estimator will get you a real figure for a specific dwelling limit. In Vermont its most useful job is not finding you a cheaper premium — it is showing you what a dwelling limit sized to a $245-per-square-foot rebuild actually costs, which is the number this state's cheap headline hides.

The Vermont mortgage payment calculator gives you the principal and interest figure for the rate you are actually quoted, which Section 3 shows is worth about $2,561 a year per point.

This article is general educational information about rental property arithmetic in Vermont, 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. The property tax figures use the statewide homestead-measured effective rate and are a floor for a rental, which pays Vermont's nonhomestead education rate. Insurance premiums, property tax assessments, transfer tax treatment, and mortgage rates change and vary by property and by town. Consult a Vermont CPA, a licensed Vermont insurance agent, and a Vermont real estate attorney before buying.