Recently, while talking to someone who purchased a rental property in Oklahoma City, I saw that they calculated their return on investment without deducting management fees from their rental income. I have witnessed many cases where people decided to buy based solely on total returns, only to be surprised later by how little money they actually received. In the past, many people simply calculated rental income as monthly rent multiplied by 12, but nowadays, more individuals are checking the cap rate based on net operating income relative to the purchase price.

The average home value in Oklahoma City is around $209,117 (Zillow, 2026, with a recent 0.3% decline over the past year). Rental prices vary by source, but according to RentCafe, the average rent for an apartment is $1,065, and for a three-bedroom unit, it is about $1,412. For single-family home rentals, you can estimate around $1,400 per month. Using these figures, the total return on investment calculates to an annual rental income of $16,800 divided by the purchase price, resulting in about 8.0%. This is quite high for a market where rents are 37% lower than the national average.

However, this 8.0% figure does not account for property taxes, insurance, management fees, or maintenance costs. The key items to check in order are three main categories. First is property tax, with the average effective tax rate in Oklahoma being around 0.88% (financialcalculator.io, 2025). Second are insurance and maintenance costs, and third is the management fee, which can range from 8% to 12% of the monthly rent if you hire a property manager. When you combine these, it is common for nearly half of the total rental income to go towards operating expenses. If you apply a rough 50% rule, the net operating income would drop to about $8,400 annually, and the cap rate would decrease to around 4.0%.

Additionally, the cash-on-cash return will vary depending on how much you put down as a down payment. The more you leverage loans, the return on the actual cash invested may be higher than the cap rate, or it could be lower due to mortgage interest burdens. These three metrics answer different questions, so relying on just one can lead to results that are skewed, similar to missing a management fee in your calculations.

The 1% rule is also worth mentioning. This rule suggests that if the monthly rent is more than 1% of the purchase price, the cash flow is likely to be healthy. In Oklahoma City, dividing $1,400 by $209,117 gives about 0.67%, which falls short of this benchmark. However, this rule is not an absolute standard and should only be used as a reference. When considering total returns, including cash flow income, appreciation, principal repayment on loans, and tax benefits from depreciation, the picture can change. However, it cannot be assumed that prices will always rise, so it is wise to check the recent turnover rate of listings and vacancy status through a broker before making a contract.

Here are the items to check before signing a contract:

• Have all property taxes, insurance, management fees, and maintenance costs been deducted from rental income?
• Have you reviewed the purchase price and rent ratio alongside reference standards like the 1% rule?
• Have you confirmed the cash-on-cash return considering the down payment and loan terms?

Oklahoma City is a market where Korean families often look for school districts and investment rental properties. While you can refer to ratings from GreatSchools or Niche for school district quality, keep in mind that school boundaries change frequently, so it's best to verify the assigned school for the specific address before purchasing. If you are moving to Oklahoma from another state, it is advantageous that the property tax rate is generally lower than in your previous state, but be aware that tax rates can vary by county. This article is not investment or legal advice, and it is recommended to consult with real estate and accounting professionals before finalizing any contracts.