Real Estate Investing in Lexington, Kentucky (40516)
Everything the listing leaves out — vacancy, rent trend, cap rate, landlord climate. All free.
Should you buy in 40516 (Lexington, KY)? Our answer, based on the numbers below.
Solid choice — stable market with a reasonable entry point and good rental backup if you ever need to move.
A cash-flow market — rent-to-price math works from day one, though value growth is modest. Great for income-focused investors.
No major risk flags on the data we track.
What’s happening in Lexington, KY (40516)?
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Market Analysis: 40516 Lexington
From an investor standpoint, ZIP 40516 has challenges — vacancy pressure, softer price growth, and tenant stability concerns sit alongside the $345K median. It rewards specialists, not generalists.
Distressed markets are won on execution, not on spreadsheets. ZIP 40516 reflects the profile where tenant screening, deferred maintenance, and local relationships determine the outcome.
Statewide comparisons place 40516 among KY's softer markets. That context does not make the ZIP uninvestable, but it does raise the bar for due diligence.
Resident income in 40516 sits below the county median. That reality colors rent collection, vacancy, and reinvestment math in ways that outside investors often underestimate.
Experienced landlords with local relationships tend to find 40516 workable. Turnkey investors from out of state usually find the numbers do not hold up in practice.
Here's what matters if you're considering buying a home in Lexington:
Property Strategy for 40516
Which property type performs best in this market?
📊 Compare All Property Types →
| Type | Median Value | Est. Rent | Cap Rate | 5yr CAGR | $/Bedroom |
|---|---|---|---|---|---|
| 2BR | $189,240 | $1,300 | 4.9% | +10.6% | $94,620 |
| 3BR | $286,271 | $1,780 | 4.5% | +9.7% | $95,424 |
| 4BR | $440,586 | $1,980 | 3.2% | +7.4% | $110,147 |
Market Trends
Home Value History (with trend line)
Rent History (with trend line)
📊 How Does 40516 Compare?
| Metric | 40516 | Lexington | Lexington-Fayette, KY | Kentucky |
|---|---|---|---|---|
| Home Value | $345,284 | $342,797 | N/A | $225,788 |
| 5-Year CAGR | 4.9% | 6.9% | N/A | 6.9% |
| Avg Rent | $1,875 | $1,627 | N/A | - |
| Cap Rate | 4.2% | 3.5% | - | - |
Similar ZIPs Within 25 Miles
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Landlord Ground Truth
Real numbers from people who own or manage rentals in ZIP 40516 (Lexington, KY). Anonymous, moderated, never written by AI.
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📊 Market Snapshot
| Home Value | $345,284 |
| Monthly Rent | $1,875 |
| Price-to-Rent | 15.4:1 |
| 1% Rule | ✗ Fails |
💰 Return Metrics
| Gross Yield | 6.5% |
| Cap Rate | 4.2% |
| 5-Year IRR | 9.1% |
📈 Home Appreciation
| 1-Year | +5.3% ▲ |
| 3-Year CAGR | +2.6% ▲ |
| 5-Year CAGR | +4.9% ▲ |
| 10-Year CAGR | +5.6% ▲ |
🏠 Rent Trends
| 1-Year | N/A |
| 3-Year CAGR | N/A |
| 5-Year CAGR | N/A |
The current 30-yr mortgage rate (6.8%) exceeds the estimated cap rate (4.2%). Financing reduces your cash-on-cash return below the cap rate. Markets like this may still make sense as IRR plays — factoring in appreciation, depreciation, and a future refinance when rates drop.
Run an IRR Analysis →⚠️ Risk Signals
Composite view of factors that can impact a ZIP's stability and your downside risk.
Demographics in 40516
Population: 2,809
Crime & Safety
Crime & Safety Data Coming Soon
We're integrating comprehensive crime statistics including violent crime rates, property crime, and safety scores to help you make informed investment decisions.
Expected: Q1 2025
🎓 Nearby Colleges & Universities
Investor Insight: With 8,337 students living off-campus nearby, this area has strong rental demand from the college population.
Frequently Asked Questions
How much do tenants pay in Lexington, KY?
Rent in Lexington, KY is around $1,875/mo. The resulting rent-to-value relationship with $345K pricing is reasonable for most investor models.
Which investment style suits Lexington, KY?
Investors usually favor careful cash-flow rentals with hands-on management in Lexington, KY. With home values at $345K and rents near $1,875/mo, other strategies can work but produce reliable rather than outsized returns.
How high is vacancy risk in Lexington, KY?
Lexington, KY carries elevated vacancy risk. Expect even-keeled absorption at market rents of $1,875/mo.
How do landlord-tenant laws work in Lexington, KY?
KY law landlord-friendly for landlords, and Lexington inherits those rules. Investors should still review local ordinances for rental licensing.
What is the typical home price in Lexington, KY?
In Lexington, KY the median home value sits at $345K. Against the broader KY market, that reads as reasonable for most investors.
You know 40516 now. You don’t know where it ranks.
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How 40516 ranks in Lexington-Fayette, KY
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