Best Places to Buy Rental Property in Iowa (2026)

Iowa has 15 cities where the median home closed at or under $250,000 in the last six months and where at least 100 sales actually closed. This ranking orders them by entry price, cheapest first, and pairs each with its six-month closing count, because those two facts answer different questions: how much capital does a door consume, and how hard will it be to sell. A limitation stated up front. We do not have rent data for these cities. Nothing in this article states or implies a rent amount, a rent to price ratio, a cap rate, or a cash-on-cash return. Citywide yield figures are averages of properties that have nothing in common with the one you are evaluating, and they are one of the most common ways investors talk themselves into bad purchases. Rent is determined by the specific unit, its condition, and its immediate submarket, and it must be verified per property. For context: Iowa's statewide median sold price is $265,000 across 12,587 closings in six months. Every city below prices under that.

The ranking, cheapest entry price first

1. Burlington, $132,000 median, 156 closings

The lowest entry price in Iowa with meaningful volume. At $132,000, 20% down is roughly $26,400, which is about a third of what the same down payment costs in Waukee at its $379,990 median. Southeast Iowa on the Mississippi. Older housing stock at this price point means rehab scope, not purchase price, will decide the deal.

2. Ottumwa, $134,000 median, 123 closings

Effectively tied with Burlington on price, $2,000 higher, with slightly thinner volume at 123 closings. South central Iowa. Same caution about scarce comps and slower exits.

3. Clinton, $136,750 median, 131 closings

Eastern Iowa on the Mississippi, north of the Quad Cities. Under $140,000 with 131 closings.

4. Mason City, $162,000 median, 194 closings

North central Iowa regional hub. 194 closings gives it better comp availability than the three cities above it at a $25,250 to $30,000 higher entry price, which is generally a trade worth making.

5. Marshalltown, $168,000 median, 121 closings

Central Iowa, within reach of the Des Moines labor market. 121 closings is thin, so treat automated valuations here as a starting point that needs manual comp review.

6. Davenport, $186,375 median, 479 closings

A significant jump in liquidity. Davenport is the largest of Iowa's Quad Cities markets, producing 479 closings while still pricing under $190,000. That volume means plentiful comparable sales, which raises confidence on both the purchase valuation and the eventual sale. The Quad Cities economy spans the Illinois line, so a Iowa-only view of that market misses half of it.

7. Waterloo, $194,000 median, 301 closings

Northeast Iowa with 301 closings and a sub-$200,000 median. Good depth for the price. Paired with adjacent Cedar Falls in a single labor market, though the two price differently.

8. Muscatine, $196,500 median, 126 closings

Eastern Iowa on the Mississippi. 126 closings. Manufacturing-weighted local economy, which is a concentration risk worth understanding.

9. Newton, $197,700 median, 124 closings

Central Iowa, east of Des Moines. 124 closings makes this one of the thinner markets on the list despite its proximity to the state's largest metro.

10. Boone, $199,500 median, 103 closings

The thinnest market here at 103 closings, just clearing the volume threshold. Central Iowa near Ames. Every valuation in a market this small needs individual comp review.

11. Cedar Rapids, $215,000 median, 804 closings

The second most liquid market on this list and one of the strongest price-to-volume combinations in the state. 804 closings at $215,000 means Iowa's number two market by transaction count prices $50,000 below the state median. Abundant comps, faster exits, and correspondingly more competition from other buyers.

12. Des Moines, $218,000 median, 1,300 closings

The most liquid market in Iowa, period, and it still qualifies as affordable. 1,300 closings is more than eight times Burlington's count, at a median only $86,000 higher. This is the entry to look at first if liquidity matters to you, because valuation confidence and exit speed both scale with transaction volume. Be careful with the city boundary: Des Moines closes at $218,000 while West Des Moines closes at $339,000 and Waukee at $379,990, so a comp set that leaks across the line is off by a wide margin.

13. Sioux City, $220,000 median, 371 closings

Western Iowa on the Missouri River, with 371 closings. Solid depth, and its metro extends into Nebraska and South Dakota, which means local demand drivers are not captured by Iowa data alone.

14. Council Bluffs, $230,000 median, 310 closings

Directly across the river from Omaha, Nebraska. 310 closings and a $230,000 median. Like Sioux City and Davenport, Council Bluffs belongs to a bi-state metro, so its demand picture is driven substantially by a market outside Iowa.

15. Dubuque, $250,000 median, 334 closings

Northeast Iowa on the Mississippi, at the top of the affordable range with 334 closings. Good liquidity for a market its size.

What entry price and volume can and cannot tell you

Entry price sets how much capital each door ties up, which determines how many properties you can own and how concentrated your risk becomes. Closing volume sets how much comparable sales evidence exists to value the property and how quickly the market can absorb it when you sell. Across this list those two vary independently: Boone at 103 closings and Des Moines at 1,300 are both on it. Neither figure tells you whether a specific property makes money. Rent, property taxes, insurance, vacancy, management, and rehab cost are all property level variables. Iowa's assessment and rollback mechanics in particular mean the tax line on a rental can differ from what a quick estimate suggests, and that single line can decide the deal. So use this list to choose where to look, then verify the economics on the actual address:

• •Verify rent from real comparable listings in that submarket, then run the property through the rental property calculator. - Model purchase, rehab, holding costs, and exit together in the deal analyzer. - If you are rehabbing, establish the finished value first with the ARV calculator. - Check ZIP level context on the local market pages before assuming a city median describes your block. Estimates are frozen when a property lists and later graded against the real closing price on a public accuracy dashboard. The free tools need no signup.