Broward County, FL Cap Rates by Neighborhood

County-Wide Gross Yield: A Starting Point, Not a Conclusion

At a $423,722 median home price against $2,515/month median rent, Broward County clocks a gross yield of 7.12% and a price-to-rent ratio of 14.0x. On paper, that looks attractive for a large coastal Florida market. In practice, the aggregate masks a wide submarket spread, and the net number after taxes, insurance, and flood costs tells a very different story.

The 14.0x price-to-rent ratio implies cap rates in the mid-to-upper single digits before expenses. But Broward carries insurance costs of $5,000–$8,000 per year per property, a property tax effective rate running 1.0%–1.4% of market value for non-homesteaded investors, and, post-July 2024 FEMA remap, mandatory flood insurance for more than 113,000 newly classified high-hazard parcels. Run those costs through a representative deal and gross yield compresses fast.

On a $423,722 acquisition, property tax at the low end of the effective range (1.0%) costs $4,237/year. At 1.4%, it costs $5,933. Add $5,000 in insurance at the low end, and operating costs before maintenance, vacancy, or management already consume $9,237–$10,933 annually. Against $30,180 in gross annual rent ($2,515 x 12), that leaves $19,247–$20,943 before all other expenses. That is a net operating income range implying a true cap rate closer to 4.5%–4.9%, not 7.12%.

If the property sits in a newly designated Special Flood Hazard Area, add a mandatory NFIP or private flood insurance policy on top, pushing total insurance costs to $7,000–$12,000+ per year depending on elevation and construction vintage, and the achievable net cap rate compresses further into the 3.5%–4.3% range.

Neighborhood and Segment Breakdown

Urban Core: Flagler Village, FAT Village, Tarpon River

This is the highest-rent submarket in the county. A one-bedroom in Tarpon River averages $3,362/month, which is 34% above the county median rent. At a $3,362/month rent on a property acquired at the county median price, gross yield jumps above 9.5%. Even accounting for higher taxes and insurance in a dense urban environment, net cap rates in this corridor are likely 200–250 basis points above the county aggregate.

The structural upside case here is transit-driven. The PREMO Light Rail project ($1.25 billion, Phase 1 from FLL Airport to the Broward County Convention Center) targeted for completion by 2028–2029 runs directly through this corridor. A design contract was already awarded to Jacobs Solutions in 2024. Station-area premiums typically compress cap rates by repricing land values upward, so the investor calculus is: buy yield now, accept cap rate compression as the transit buildout de-risks and reprices the corridor. Early positioning before 2028 carries the strongest risk/reward in this segment.

Established Single-Family: Victoria Park, Rio Vista

These neighborhoods operate in a different register. One-bedroom rents run $2,150–$2,175/month, below the county median, but asset quality is higher, tenant profiles are more stable, and GreatSchools ratings of 9–10 reduce vacancy risk. The lower rent relative to likely acquisition premiums (these are desirable, supply-constrained neighborhoods) means gross yields probably land in the 5.5%–6.5% range. Net cap rates after the same $9,000–$11,000 annual tax and insurance load likely settle in the 3.5%–4.5% range.

These are hold-and-appreciate plays, not cash flow plays. The yield is thin, but the vacancy risk is low and the tenant base is durable. Investors who need day-one cash flow should price these neighborhoods out of their underwriting before going under contract.

West Broward Condos: ZIP Codes 33322, 33321 (Sunrise/Lauderhill)

This is the segment to underweight. ZIP codes 33322 and 33321 posted home value declines of -6.6% and -5.7% year-over-year respectively, with average days on market of 82. The broader condo segment hit 12 months of supply county-wide as of July 2025. That level of inventory in a market where prices are still falling does not offer a yield cushion for the risk being taken.

The arithmetic is straightforward: when prices fall faster than rents, gross yields expand in theory. But with 12 months of supply, actual vacancy rates climb, effective rent falls, and the "yield" number visible on a listing becomes fictional. Add condo HOA fees (not in the ZORI figure) and the same insurance headwinds, and the math on west Broward condos is the weakest in the county right now. Pass unless the entry price reflects a distress discount large enough to buy real cushion.

Neighborhood Comparison Table

Net cap rate estimates apply a $9,000–$11,000 annual base load (tax + baseline insurance) against listed gross rents. Flood insurance surcharge not included; add $2,000–$4,000 for SFHA-designated parcels.

Tax Impact on Net Cap Rates

The Florida Save Our Homes cap does not protect investors. On any acquisition, the county reassesses to full market value at closing. On a $423,722 purchase with a 1.2% effective rate (midpoint of the 1.0%–1.4% range), the annual tax bill lands at $5,085. That is not the seller's tax bill; it is the investor's from day one.

The Fiscal Year 2026 millage reduction to 5.6658 mills (the first cut since 2018) trims this modestly but does not change the structural picture. The combined effective rate still runs above the Florida state median of 1.10% when school, city, and special district levies are included. For investors comparing Broward to inland Florida markets, the coastal premium shows up in taxes, not just purchase price.

Cap Rate Outlook

The direction of Broward cap rates depends on three variables moving at different speeds.

Prices fell 4.11% year-over-year through June 2026 at the ZHVI level, while the May 2026 median of $469,000 (down only 0.3% YoY) suggests the correction has mostly absorbed. Inventory normalized from 9.84 months in January 2025 to 5.4 months by September 2025. Sales volume recovered, with total home sales up 7.9% year-over-year in December 2025. The soft pricing environment that briefly widened gross yields is closing.

Insurance costs are not normalizing. First Street Foundation data shows 26% of county properties face severe 30-year flood risk, and 100% carry Extreme Wind Factor hurricane exposure. With prices now stabilizing while insurance costs continue to escalate, net cap rates face ongoing compression from the cost side rather than the price side.

The ADU pathway adds a real yield expansion route. Florida SB 184 (effective July 2025) requires all municipalities to allow one ADU per single-family lot. On a property generating $2,500/month in base rent, an ADU producing an additional $1,400–$1,800/month raises gross yield by 55%–72% on the same acquisition cost. HVHZ construction requirements and 120–180-day permit timelines in Broward add cost and time, but the income upside is real for investors willing to run the construction process.

The Commuter Rail South project ($712 million, NEPA approval secured September 2024, FTA New Starts reclassification November 2024) adds a station-area premium thesis for Hollywood and the FLL corridor that plays out over a 5–7-year horizon. Investors buying in these walkable station-proximate neighborhoods today are underwriting current cap rates with optionality on transit-driven rent and price appreciation.

Model your specific deal with our investment property calculator to stress-test insurance escalation scenarios and ADU income overlays against your actual acquisition price and financing structure.