Clarksville, TN Cap Rate: 3.85% — Rental Property Analysis
Clarksville is a mid-range market in the South with a mid-sized city of 168,050. At a 3.85% estimated cap rate, this is a appreciation-focused market where rents of $1,340/mo lag behind home prices. With a median home price of $290,000 and steady population growth supports long-term rental demand, Clarksville is primarily an appreciation play that requires creative strategies to generate positive cash flow.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
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Challenging for pure cash flow
Based on $290,000 median price and $1,340/mo median rent
Est. Cap Rate
3.85%
1% Rule
0.46%
Fails
GRM
18.0x
Price / Income
5.5x
Market Data
Median Home Price$290,000
Median Monthly Rent$1,340
Property Tax Rate0.58%
Population168,050
Population Growth2% / yr
Median Household Income$52,400
Vacancy Rate5.6%
Annual Appreciation3.1%
2026 Market Update: Clarksville
Clarksville's 0.5% rent-to-price ratio is well below the 1% rule. At median prices of $290,000, the $1,340/mo rent produces only $931/mo in NOI. Investors here need to target below-median properties or pursue value-add strategies to make the numbers work.
At current rates, a 20% down conventional loan ($58K at 7%) would result in approximately $-612/mo cash flow — negative at median prices. Larger down payments, seller financing, or buying 15–25% below median are strategies to turn the numbers positive.
The 18.0x gross rent multiplier and 5.6% vacancy rate position Clarksville as a growth-dependent market. With annual appreciation at 3.1%, total returns (cash flow + equity growth) run approximately 7.0% before financing leverage.
Cap Rate Calculator — Clarksville
Pre-filled with Clarksville medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
0.58% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
3.26%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$9,444
net operating income
Gross Rent Multiplier
18.0x
High (>15)
1% Rule
0.46%
✗ Fails
Monthly Cash Flow
$787
before debt service
Annual Breakdown
Gross Rental Income$16,080
Less Vacancy−$900
Effective Income$15,180
Less Operating Expenses−$5,736
Net Operating Income$9,444
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Factor in financing to see your actual return on invested capital in Clarksville.
$
$72,500
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-9.47%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$81,200
$72,500 down + $8,700 closing
Monthly Mortgage
$1,418
on $218K loan
Monthly Cash Flow
$-641
after all expenses
Annual Cash Flow
$-7,691
before taxes
Cash Flow Breakdown
Monthly Rent$1,340
Less Expenses−$563
Less Mortgage−$1,418
Monthly Cash Flow$-641
Is Clarksville a Good Place to Invest in Rental Property?
Clarksville, TN has a population of 168,050 and has been growing at 2% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $290,000 paired with median rents of $1,340/mo produces an estimated cap rate of 3.85%.
Property taxes at 0.58% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 5.6% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 5.5x, homes cost about 5.5 times the local median income of $52,400. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 3.1% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: At current median prices, Clarksville is challenging for pure cash flow investing. Consider BRRRR strategies with below-market purchases, or look at neighboring metros with stronger price-to-rent ratios.
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