Cap Rate in Memphis, TN

2026 Market Overview for Real Estate Investors

Avg Cap Rate

9.2%

#3 of 50 markets

Median Home Price

$130,000

Purchase price

Median Monthly Rent

$1,200

$14,400/yr gross

Rent-to-Price Ratio

0.92%

Strong (1% rule range)

Cap Rate Rating

Very Good

Above average. Make sure the higher return is not masking higher risk or deferred maintenance.

Market Snapshot

Population	628,127
5-Year Population Growth	-1.5%
Median Household Income	$41,000
Vacancy Rate	10.2%
Property Tax Rate	1.45%($1,885/yr)

Investor Takeaway

Memphis is a proven turnkey rental market with strong property management infrastructure. The logistics hub economy (FedEx HQ) provides stable blue-collar employment supporting rental demand.

Quick Math

Estimated annual numbers for a median-priced property in Memphis, TN before financing:

Annual Gross Rent$14,400

Less Vacancy (10.2%)($1,469)

Less Property Tax (1.45%)($1,885)

Less Est. Insurance + Maintenance($2,600)

Estimated NOI$8,446

Implied Cap Rate6.5%

Estimates based on median values. Insurance + maintenance estimated at 2% of home value. Actual results vary by property condition, neighborhood, and management.