Iowa Rental Portfolio Guide
What you need to know before building or growing a rental portfolio in Iowa — property tax burden, state income tax, security-deposit rule, source-of-income law, and the metros that actually cash-flow after accounting for local taxes.
Tax burden on Iowa rentals
Property tax
1.52%
effective rate on median home value
At 1.52% effective, this is one of the highest property tax burdens in the country (rank 42 of 51). Every underwrite needs to account for the full carrying cost — even a strong rent-to-price ratio can go negative once property tax is properly modeled.
State income tax
5.70%
top marginal rate
A top marginal rate of 5.70% is moderate. Portfolio income above the federal deduction stack still faces this rate on top of federal, so tax-optimized holding structures (installment sales, 1031s, cost-segregation) matter more here than in no-tax states.
Security deposit rule
State law caps security deposits at 2 months' rent. Charging above the cap exposes the landlord to statutory damages in most states, so build lease templates that respect this ceiling from day one.
Deposit rules change; verify current statute before drafting a lease.
Best cash-flow markets in Iowa
Modeled monthly cash flow on a median-priced single-family purchase at 20% down, 30-year fixed, using Iowa’s 1.52% effective property tax rate plus 25% of rent for insurance, maintenance, vacancy and management.
| Market | Median price | Median rent | Annual property tax | CF / month |
|---|---|---|---|---|
| Ottumwa, IA | $131,577 | $833 | $2,000 | $-231 |
| Burlington, IA | $144,809 | $873 | $2,201 | $-288 |
| Davenport, IA | $195,380 | $1,021 | $2,970 | $-506 |
| Sioux City, IA | $225,213 | $1,252 | $3,423 | $-527 |
| Clinton, IA | $177,938 | $840 | $2,705 | $-529 |
| Waterloo, IA | $200,191 | $1,027 | $3,043 | $-533 |
State median across the metros: $201,111 home, $1,023 rent, $-603/mo modeled cash flow.
Track your Iowa rental portfolio
The Pro Portfolio Tracker rolls up every property in your portfolio, auto-revalues them monthly against local price data, and flags DSCR risk and equity milestones. Each Iowa property carries the state-specific tax burden shown above through to the cash flow calculation.
Property tax rate: Tax Foundation. Security deposit rule: state statute. Verify current law before making decisions — statutes change and this page is a planning reference, not legal or tax advice.