Is A Rental In Hazen A Good Investment?

Wondering if a rental in Hazen could deliver steady returns without a lot of drama? In small Arkansas markets, the answer often comes down to the specific property and your numbers, not broad headlines. If you want a clear way to evaluate a Hazen rental, you’re in the right place. In this guide, you’ll learn the key metrics investors use, where to find local data, how to run a simple worksheet with an illustrative example, and what to watch for in a small-market purchase. Let’s dive in.

Hazen market basics

Hazen is a small city in Prairie County with a thinner sales and rental market than larger metros. That means price discovery, time on market and liquidity can vary property by property. Local demand typically ties to employment, commuting patterns and household turnover. You should validate those factors with current listings and conversations with local managers.

For live inputs, focus on reliable sources:

• HUD Fair Market Rents for Prairie County provide a county-level rent baseline you can compare to local listings. Check the latest figures on the HUD FMR page.
• The U.S. Census Bureau’s QuickFacts helps you understand population and housing context. Review Prairie County on Census QuickFacts.
• Confirm tax assessments with the county assessor and compare against statewide benchmarks from the Tax Foundation’s effective property tax rates.
• Verify hazard exposure and any flood zone impacts on the FEMA Flood Map Service Center.
• For financing costs, track rate trends on the Freddie Mac Primary Mortgage Market Survey.

In small markets, a single comp can mislead you. Pull several recent sales and a handful of active and pending rental comps, then triangulate.

The core investment metrics

Understanding a few key formulas helps you compare apples to apples.

• Gross Scheduled Rent (GSR): Monthly rent × 12.
• Vacancy allowance: GSR × vacancy rate. Subtract from GSR.
• Effective Gross Income (EGI): GSR − vacancy allowance + other income.
• Operating expenses: Property tax + insurance + repairs/maintenance + owner-paid utilities + management + HOA + reserves.
• Net Operating Income (NOI): EGI − operating expenses.
• Cap rate: NOI ÷ purchase price. Compares unlevered returns across properties.
• Cash-on-cash return (CoC): Annual cash flow after debt ÷ cash invested at purchase.
• DSCR: NOI ÷ annual debt service. Some lenders require a minimum.

Benchmarks to plug into your worksheet

These are common investor heuristics for single-family rentals. Tailor them to the property’s age, condition and your quotes.

• Vacancy: 5 to 10 percent in small-town markets.
• Property management: 8 to 12 percent of monthly rent.
• Maintenance and repairs: 1 percent of property value per year or 5 to 10 percent of gross rent.
• Capital expenditures reserve: 5 to 10 percent of rent or a flat annual amount based on age and systems.
• Property tax: Use county millage and assessed value. Sanity-check with state effective rates from the Tax Foundation.
• Insurance: Quote locally. Flood zones and severe weather exposure increase cost.
• Financing: Investor loans often need 20 to 25 percent down. Track rates on Freddie Mac’s survey.

Example: a Hazen rental worksheet (illustrative only)

Use this as a structure to plug in your real numbers from MLS comps, local rent data and current quotes.

Inputs

• Purchase price: 85,000 dollars
• Monthly rent: 850 dollars
• Vacancy: 8 percent
• Property tax (effective): 0.60 percent of value → 510 dollars per year
• Insurance: 900 dollars per year
• Property management: 10 percent of gross rent
• Maintenance: 1 percent of value → 850 dollars per year
• CapEx reserve: 500 dollars per year
• Mortgage: 80 percent LTV, 6.5 percent interest, 30-year fixed
• Closing costs and initial repairs: 3,000 dollars

Calculations

• GSR = 850 × 12 = 10,200 dollars
• Vacancy allowance = 8 percent × 10,200 = 816 dollars
• EGI = 10,200 − 816 = 9,384 dollars
• Operating expenses = tax (510) + insurance (900) + management (10 percent of GSR = 1,020) + maintenance (850) + capex (500) = 3,780 dollars
• NOI = 9,384 − 3,780 = 5,604 dollars
• Cap rate = 5,604 ÷ 85,000 = about 6.6 percent
• Annual debt service ≈ 5,160 dollars (on 68,000 dollars at 6.5 percent, 30-year)
• Cash flow after debt = 5,604 − 5,160 = 444 dollars per year
• Cash invested = down payment 17,000 dollars + closing/repairs 3,000 dollars = 20,000 dollars
• Cash-on-cash = 444 ÷ 20,000 = about 2.2 percent

What these numbers suggest

• A cap rate near 6.6 percent is a moderate unlevered return for a small market. Actual cap rates in rural Arkansas vary widely by condition and price.
• The cash-on-cash return is low because financing absorbs most of the NOI. A higher rent, lower purchase price, larger down payment or lower rate could improve cash flow.
• All-cash buyers can treat cap rate as a rough proxy for annual yield before taxes.

Stress-test your scenario

Small markets can be sensitive to vacancy and insurance swings. Test your margin before you offer.

• Reduce rent by 5 to 10 percent and re-run cash flow.
• Increase insurance by 15 percent and maintenance by 50 percent to see downside.
• Add 1 to 2 percentage points to your interest rate to test payment risk.
• Model longer vacancy between tenants, especially in off-season months.

Local risks and checks to complete

Every Hazen property is different. Use these checkpoints to avoid surprises.

Liquidity and resale

Expect fewer comps and potentially longer time on market compared to metro areas. Price with multiple recent sales, not a single outlier.

Tenant demand and turnover

Demand typically follows local employment and commuting patterns. Speak with a local manager about typical vacancy periods and turnover costs.

Property condition and hidden costs

Older homes may need roof, structural, septic or system upgrades. Budget larger reserves if age or inspection findings suggest near-term CapEx.

Insurance and hazard exposure

Confirm flood zone status on the FEMA map. Flood requirements can add a separate policy and raise total insurance costs.

Taxes and assessments

Use Prairie County’s assessment method and millage to estimate property taxes, then cross-check against statewide effective rates from the Tax Foundation.

Legal process and timelines

Arkansas landlord-tenant rules govern notice and eviction. Timelines can vary by jurisdiction and affect vacancy costs. Consult local counsel or the county clerk for procedures.

Financing availability

Some national lenders restrict loans in low-population areas or require higher down payments. Compare local banks, credit unions and portfolio lenders. Rate trends are published on the Freddie Mac PMMS.

What to gather for a fast analysis

Here is a simple checklist you can copy for each property.

• Property address and year built
• Asking price and 3 to 6 recent sold comps in Hazen or nearby Prairie County towns
• Current rent or expected rent from active listings and HUD FMR baselines
• Property tax estimate from county data
• Insurance quote, including flood if applicable
• Utility responsibilities: owner-paid vs tenant-paid
• Age and condition of roof, HVAC, plumbing, electrical and septic or sewer
• Vacancy assumption and management fee based on local norms
• Your loan terms: down payment, rate, term, points and closing costs

Is a Hazen rental a good investment for you?

It depends on the property, your financing and your risk tolerance. In a small market like Hazen, strong deals usually come from careful comping, conservative underwriting and solid execution. Use the worksheet above with verified local inputs, run a stress test and compare your projected cap rate and cash-on-cash to your target returns and alternatives.

If you want a second set of eyes, bring the address, asking price and current rent and I’ll build a tailored worksheet with local comps, property taxes and insurance considerations. When you are ready to tour, analyze or make a move, connect with Brooke Wheeler for responsive, data-backed guidance and full-service representation.

FAQs

How do I estimate rent for a Hazen rental if comps are sparse?

• Start with county-level baselines from HUD Fair Market Rents, then adjust using several active rental listings in Hazen and nearby Prairie County towns.

What cap rate should I target for small-town rentals in Hazen?

• Cap rates vary widely by condition and price. Use the worksheet to estimate your property’s cap rate, then compare to your target and alternatives, not a blanket rule.

How can I estimate property taxes in Prairie County for a rental?

• Use the county assessor’s assessment method and millage for the address, then sanity-check your result against statewide benchmarks from the Tax Foundation.

How do flood zones affect Hazen rental costs and financing?

• If a property sits in a mapped flood zone, lenders typically require flood insurance, which increases annual costs. Confirm status on the FEMA Flood Map Service Center.

What vacancy rate should I underwrite for a Hazen single-family rental?

• A 5 to 10 percent vacancy allowance is a reasonable small-market starting point. If local managers report longer turns, underwrite toward the higher end.

How will mortgage rates impact my cash flow in Hazen?

• Higher rates raise debt service and can compress cash-on-cash returns. Track current averages on the Freddie Mac PMMS and stress-test your deal with rates 1 to 2 points higher.