Cap Rate in Nashville, TN

2026 Market Overview for Real Estate Investors

Avg Cap Rate

5.2%

#37 of 50 markets

Median Home Price

$400,000

Purchase price

Median Monthly Rent

$1,800

$21,600/yr gross

Rent-to-Price Ratio

0.45%

Below 1% rule

Cap Rate Rating

Moderate

Typical for stable markets with moderate growth potential. Balanced risk-return profile.

Market Snapshot

Population	683,622
5-Year Population Growth	+10.0%
Median Household Income	$62,000
Vacancy Rate	5.5%
Property Tax Rate	0.66%($2,640/yr)

Investor Takeaway

Nashville has transitioned from cash-flow market to appreciation play as prices have surged. No state income tax and strong population growth support long-term returns, but cap rates have compressed.

Quick Math

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

Annual Gross Rent$21,600

Less Vacancy (5.5%)($1,188)

Less Property Tax (0.66%)($2,640)

Less Est. Insurance + Maintenance($8,000)

Estimated NOI$9,772

Implied Cap Rate2.4%

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