Cap rate, real cash flow, and return on the cash you put in — including the expenses most analyses leave out. Estimate only, not investment advice.
Estimates only — not investment, tax, or legal advice. How we calculate every figure
Estimated all-in monthly payment for a home price you have in mind.
What homeowners insurance costs in your state, and whether what you pay is out of line.
Income, savings, and debts in — max home price and qualification signal out.
A rental bought for $300,000 and sold seven years later for $394,780 nets $158,925 at closing — and owes about $24,753 of federal tax, $15,273 of it on depreciation you were required to take. Here is the math, why a sale with zero appreciation still owes tax, and the three clocks a fourth-quarter sale starts.
A leveraged rental makes money three ways and cash flow is only one of them. Here is what the other two are worth — and why the structure that maximises them is a bet, not a plan.
How to verify one specific rental deal: audit the seller's pro-forma line by line, comp a real rent, reassess the tax, age the systems, and price the offer the numbers actually support.
Set up basis correctly, claim the depreciation you are owed, survive the passive-loss rules, and know what the sale will cost — with every figure tied to the statute.
Arkansas guide
On paper Arkansas is the friendliest rental math in this series. The effective property tax rate is 0.54% — the lowest of the seven Southern states covered here. Closing costs run 2% to 4%, the cheapest and narrowest band of the seven. The statewide average premium at $300,000 of dwelling coverage is $3,374, second-lowest. And the most recent published appreciation figure is +3.40% a year, second-highest.
The worked example below still loses $552.67 a month. It is the closest to breaking even of any state in this series, and it is still a loss — which is the honest headline for a low-cost Southern market at 2026 financing costs.
There are two things a low headline hides here, and neither is a cost line.
The first is that Arkansas has no insurer of last resort at all — no FAIR plan, no windstorm pool, no state-backed backstop of any kind. That is confirmed, not merely unverified: Arkansas is absent from the rosters of the roughly 33 states plus DC that operate one. A property declined by the admitted market, most often for roof age or hail claim history, goes to the surplus-lines market, which typically costs more and frequently writes narrower terms including actual-cash-value roof settlement.
The second is that Arkansas sits squarely in the severe convective storm corridor — tornado, straight-line wind and hail — and its carriers have moved decisively onto separate percentage wind-and-hail deductibles. Because that is carrier practice rather than Arkansas statute, the percentage is negotiable at the point of sale, and almost nobody negotiates it.
A note before you start: this is general educational information about how rental property arithmetic works in Arkansas. It is not investment, tax, insurance, or legal advice, and it is not a recommendation about any property. Arkansas insurance is priced per structure — roof age and material above all, plus construction, claim history, and hail territory — and property tax is administered county by county. Talk to an Arkansas CPA about tax treatment, a licensed Arkansas insurance agent about a real quote, and an Arkansas attorney about anything contractual.
Read the full Arkansas guide →21 min read · Updated 2026-08-28