Someone asked which of two properties in the same neighborhood in Burlington would be better. One has a lower purchase price and lower rent, while the other has a higher purchase price and higher rent. At first glance, both seem to have similar total yields, but when factoring in property taxes to calculate the cap rate, the results differ.

The rental levels in Burlington vary by source. As of April 2026, the median rent was $3,170, and recent averages are reported between $2,842 and $2,951. The average for a one-bedroom is $2,839, which is over 40 percent higher than the national average of $2,100. The median listing price as of July 2026 was $964,000, while the actual median sale price was around $947,000. According to Zillow, the average home value is estimated at $804,000, which can be lower. Burlington is a place where this gap can be significant depending on the condition and location of the properties.

Starting with property taxes, Burlington is relatively low even within Middlesex County. The residential tax rate for the 2026 fiscal year is $8.69 per $1,000, which is noticeably lower than the Middlesex County average of $12.42. This difference significantly impacts the cap rate calculation.

Calculating based on one-bedroom rent, the annual rental income is $34,068. Dividing by the purchase price of $947,000 gives a total yield of 3.60 percent. If we apply the 50 percent rule for operating expenses, the NOI is $17,034. The cap rate drops to about 1.80 percent. Because the purchase price is so high, even with high rent, the cap rate remains low.

Now, let's compare the two properties. If the property with the relatively lower purchase price and slightly lower rent has the same tax rate, the proportion of rent to purchase price increases, which can actually raise the cap rate. In areas like Burlington with low property tax rates, this difference is purely based on the ratio of purchase price to rent. This is why one should not judge the two properties as equal based solely on total yield.

Looking at the numbers for the second property, if the purchase price is $780,000 and the rent is $2,650, the annual rental income would be $31,800. The total yield is 4.08 percent, which is higher than the previously calculated 3.60 percent. Applying the 50 percent rule here gives an NOI of $15,900, resulting in a cap rate of 2.04 percent. Compared to the previously calculated cap rate of 1.80 percent, this one is slightly higher. Despite a nearly $200,000 difference in purchase price, the rent difference is smaller, making the relatively lower purchase price more favorable in terms of cap rate. Burlington is known for having a steady demand for rentals due to its large office parks and shopping centers, which is worth considering when assessing cap rates and vacancy risks.

If financing the purchase, the cash-on-cash return should also be considered. This method calculates pre-tax cash flow relative to the down payment, and the higher the purchase price, the larger the loan and mortgage burden. Properties with lower cap rates are likely to yield lower cash-on-cash returns as well. When comparing the two properties, it's better to look at both cap rates and cash-on-cash returns side by side.

Burlington is considered a desirable area for Korean families, especially due to its good school districts, located northwest of Boston. While school ratings can be checked on GreatSchools or Niche, boundaries change frequently, so it's advisable to verify the assigned school for the specific address before purchasing.

If moving from another state to Massachusetts, it's worth considering towns like Burlington with relatively low property tax rates. However, since the purchase prices are high, leading to lower cap rates, it's important to compare cap rates and cash-on-cash returns sequentially rather than relying solely on total yield. This article does not constitute investment or legal advice, and tax rates and market values can vary by town and time, so consulting a professional before making any agreements is recommended.