TL;DR: The best town to buy a duplex, triplex, or fourplex in Northwest Arkansas by cap rate is Gentry, where a $273,900 median purchase price (2026 YTD as of June 25, 2026) and the $1,115-a-month two-bedroom Fair Market Rent produce an 8.67% cap rate after property tax — the highest of four NWA towns with complete acquisition, rent, and millage data. Farmington ranks second at 6.37%, Fayetteville third at 5.63%, and Bentonville fourth at 4.98%, each measured against the 6.66% mortgage rate for the week of August 27, 2026.
What Are the Best Towns to Buy a Duplex in Northwest Arkansas?
This ranking uses one formula for every town: take the annual rent from two units at HUD's $1,115-a-month two-bedroom Fair Market Rent for the Fayetteville-Springdale-Rogers metro ($26,760 a year for two units), subtract the town's property tax bill on the median-priced acquisition, and divide by that median price. The result is a cap rate you can compare town to town without guessing at rent or tax numbers. Only four NWA towns in this data set have both a 2026 median sale price and a matching property tax millage, so the ranking covers Gentry, Farmington, Fayetteville, and Bentonville.
- 1. Gentry — 8.67% cap rate. Median sale price $273,900 (2026 YTD), inside Benton County's 55.04-mill average tax burden (2025 assessment, Arkansas DFA). Best for investors and builders prioritizing acquisition cost and cash flow over urban proximity — the lowest entry price of the four.
- 2. Farmington — 6.37% cap rate. Median sale price $361,782 (2026 YTD), inside Washington County's lower 51.54-mill average (2025 assessment, Arkansas DFA). Suits investors who want Fayetteville-area rent demand with a smaller tax bill than Fayetteville itself.
- 3. Fayetteville — 5.63% cap rate. Median sale price $395,000 (2026 YTD), on the city's 57.3-mill combined rate (2025 assessment, Arkansas DFA). Suits developers building for rental demand supported by active duplex permitting, per the City of Fayetteville's Q4 2025 permit data.
- 4. Bentonville — 4.98% cap rate. Median sale price $430,000 (2026 YTD), the highest combined millage on this list at 62.00 mills (2025 assessment, Arkansas DFA). Suits investors underwriting on appreciation near Walmart's headquarters rather than day-one cash flow.
How Do You Calculate Cap Rate on a Small Multifamily Property in NWA?
Start with rent: HUD sets the Fair Market Rent for a two-bedroom unit across Benton, Madison, and Washington counties at $1,115 a month. Two units at that rent run $1,115 x 12 x 2 = $26,760 a year. Next, property tax: Arkansas assesses real estate at 20% of market value, then applies the local millage to that assessed figure. On Gentry's $273,900 median price, that is $273,900 x 0.2 x 55.04 mills (0.05504) = $3,015 a year. Subtract tax from rent — $26,760 - $3,015 = $23,745 — and divide by the purchase price: $23,745 / $273,900 = 8.67%. That is the cap rate before financing. Compare it to the cost of borrowing: the 30-year fixed mortgage rate averaged 6.66% for the week of August 27, 2026. Gentry's cap rate sits 2.01 percentage points above that rate, the only town on this list where the property's own income beats the cost of the loan on paper.
Why Does the Ranking Change So Much Between Gentry and Bentonville?
Run the same math on the other three towns and the gap comes from purchase price and millage, not rent — every town in this ranking uses the same $1,115 HUD rent per unit. Farmington's $361,782 median price and Washington County's 51.54-mill rate produce a $3,729 tax bill and a 6.37% cap rate, 0.29 percentage points short of the 6.66% mortgage rate. Fayetteville's $395,000 median price and 57.3-mill combined rate produce a $4,527 tax bill and a 5.63% cap rate, a 1.03-point shortfall. Bentonville's $430,000 median price and the highest millage on this list, 62.00 mills, produce a $5,332 tax bill and a 4.98% cap rate — 1.68 percentage points below the cost of financing. For builders instead of buyers, Fayetteville is worth a second look regardless of cap rate: the city issued 9 new two-family duplex permits worth $4,043,521.59 in the fourth quarter of 2025 alone, and Bentonville, Fayetteville, Rogers, and Springdale combined issued 1,982 residential building permits in 2023, up 25.2% from 2022. That is demand for new stock, not just resale inventory. If you are weighing acquisition against county-level supply, Benton County logged 480 closed sales and 7 months of inventory in February 2026 at a $381,595 median price, a gauge of how much competition you will see for existing small multifamily stock.
What Should You Do With These Numbers?
- If cash flow from day one is the priority, start your search in Gentry, where the 8.67% cap rate clears the 6.66% mortgage rate by 2.01 percentage points.
- If you want Fayetteville-area rent demand with a lower tax bill, put Farmington on the shortlist before Fayetteville proper — its $361,782 median price carries a $3,729 tax bill against Fayetteville's $4,527.
- If you are building rather than buying, price out sites in Fayetteville first: the city approved $4,043,521.59 in new duplex permit value in the fourth quarter of 2025 alone.
- Before you make an offer, run the same formula — rent, minus tax on the assessed value, divided by price — on the specific property, not just the town median.
- Ask MCG for a side-by-side underwriting comparison across these four towns for the unit count and budget you are working with.
Frequently Asked Questions
What cap rate is good for a duplex in Northwest Arkansas?
A cap rate above the current cost of borrowing is the benchmark: with the 30-year fixed mortgage rate at 6.66% (Aug. 2026), only Gentry's 8.67% cap rate clears that line among the four NWA towns with complete 2026 acquisition, rent, and millage data. Farmington (6.37%), Fayetteville (5.63%), and Bentonville (4.98%) all sit below the financing cost on paper, which does not rule them out but does mean the case rests on appreciation or rent growth instead of day-one spread.
Which NWA town has the cheapest entry price for small multifamily?
Gentry has the lowest entry price among the four ranked towns, with a $273,900 median sale price for 2026 year-to-date. That is $156,100 below Bentonville's $430,000 median in the same period — enough of a gap that Gentry also produces the highest cap rate, 8.67%, on the same $1,115 HUD two-bedroom rent used across the ranking.
How much does property tax affect cap rate for a duplex?
Property tax accounts for most of the spread between Gentry's 8.67% cap rate and Bentonville's 4.98% cap rate. Gentry's $273,900 median price and Benton County's 55.04-mill average produce a $3,015 annual tax bill; Bentonville's $430,000 median price and 62.00-mill combined rate produce a $5,332 bill — $2,317 a year more on top of a higher purchase price. Both towns use the identical $1,115 HUD rent figure, so the tax and price gap alone explains most of the cap rate difference.
Are builders actively constructing duplexes in Northwest Arkansas right now?
Yes — Fayetteville alone issued 9 new two-family duplex building permits worth $4,043,521.59 in the fourth quarter of 2025. Across the four largest NWA cities, Bentonville, Fayetteville, Rogers, and Springdale issued 1,982 total residential building permits in 2023, up 25.2% from 2022, showing construction activity across the region that developers can use to gauge competition for new multifamily stock.
MCG can build a side-by-side cap-rate comparison for the specific duplex, triplex, or fourplex listings you are evaluating, using the same rent, tax, and financing inputs from this ranking. Call 479-925-3333 to start with a first conversation on your target towns and budget.
About the author: Cameron Torabi, Principal Broker — Mason Capital Group. 30+ years of Northwest Arkansas real estate expertise; $2.4B+ in cumulative transaction activity.
Figures in this article are drawn from NWA Look's Northwest Arkansas Real Estate Market Update, ArkansasONE MLS data (2026 YTD as of June 25, 2026), NWA Look's Monthly Real Estate Market Update for February 2026 (NWA Board of Realtors data), HUD User's FY2026 Schedule of Fair Market Rents (effective October 1, 2025), the Arkansas Department of Finance and Administration's State of Arkansas 2025 Millage Report for 2026 collections, the City of Fayetteville's Permit Issuance Summary (Q4 2025), Talk Business & Politics reporting on 2023 NWA building permits, and Freddie Mac's Primary Mortgage Market Survey (week of August 27, 2026).