Jackson is one of the lowest-cost-basis metros in the country — the headline cap rate looks extraordinary, and the underlying math at the median produces real cash flow, but the operational complexity and structural challenges are meaningful and need honest underwriting. The 6.33% cap rate at a $210,000 median price puts the 0.70% rent-to-price ratio above the 1% rule. Population growth at -0.2%/yr is negative — Jackson has been losing population steadily to surrounding suburbs and to other Sun Belt metros, and that structural trend is the central underwriting variable.
Employment is anchored by Mississippi state government (Jackson is the state capital — federal, state, and Hinds County government collectively the largest employment cluster), the University of Mississippi Medical Center (UMMC, the state's academic medical center and a major regional employer), Jackson State University and Belhaven, the broader healthcare ecosystem (Baptist Memorial, St. Dominic, the VA Medical Center), Nissan's manufacturing plant in nearby Canton, the Mississippi Department of Corrections operations, and a smaller but real professional-services base tied to government. Submarkets stratify dramatically — and this is where Jackson differs sharply from most other Deep South metros. North Jackson and Belhaven have premium walkable historic with strong appreciation; Fondren is the gentrified creative-class submarket with rent strength; the Jackson State / west Jackson zones have deeper-value inventory with significant condition variance; Madison and Ridgeland (Madison County, just north) are the high-growth suburban-school zones drawing investment away from Jackson proper.
Mississippi property tax at 0.65% is among the lowest in the country. State income tax is graduated with a top rate near 4.4% — and Mississippi is in the process of phasing toward eliminating its income tax entirely, which if completed would be a meaningful long-term cash-flow improvement. Insurance is reasonable for inland Jackson (no Gulf Coast exposure). The structural risks are real and need honest accounting: Jackson's water infrastructure crisis (the 2022 boil-water failures and ongoing reliability issues), continuing population outflow to Madison and Rankin County suburbs, and the per-zip variance in condition and tenant base. Effective operating in Jackson proper requires local relationships, conservative reserves (6+ months operating expenses minimum), and an honest vacancy assumption (8-12% rather than the 5% national average). For local operators or those with genuine local partners, the math can work — for remote turnkey investors, the operational risk usually exceeds the headline yield.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
Jackson's 0.7% rent-to-price ratio is well below the 1% rule. At median prices of $210,000, the $1,480/mo rent produces only $1,108/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 ($42K at 7%) would result in approximately $-9/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 8% vacancy rate is a key risk factor — above the 6.5% national average. Budget for 8–10% vacancy in your underwriting rather than the headline number. Focus on neighborhoods and property types with demonstrated low turnover to mitigate this risk.
All figures below are computed from Jackson's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
At 0.65% effective rate on the $210,000 median price, the annual tax bill is $1,365 — that's below national average (-39% vs the national average of ~1.06%). Verify the actual assessed value before purchase; sale-triggered reassessments can push the bill higher than the seller's current statement.
If Jackson continues appreciating at 1.6%/yr while rents grow at a conservative 3%/yr, cap rate holds roughly steady as price growth outpaces rent. Year-by-year projection at the median:
| Year | Est. Price | Est. Rent/Mo | Cap Rate |
|---|---|---|---|
| Today | $210K | $1,480 | 6.3% |
| Year 1 | $213K | $1,524 | 6.4% |
| Year 2 | $217K | $1,570 | 6.5% |
| Year 3 | $220K | $1,617 | 6.6% |
| Year 4 | $224K | $1,666 | 6.7% |
| Year 5 | $227K | $1,716 | 6.8% |
Same median-priced Jackson property — different capital structures. All-cash maximizes cap rate. Leverage trades cash flow for higher cash-on-cash return when the spread between cap rate and borrowing cost is positive.
| Scenario | Cash Invested | Monthly Cash Flow | Annual CF | Cash-on-Cash |
|---|---|---|---|---|
| All cash | $210K | $1,108 | $13,294 | 6.3% |
| 20% down conventional @ 7% | $48K | $-9 | $-112 | -0.2% |
| 25% down DSCR @ 8.5% | $61K | $-103 | $-1,240 | -2.0% |
Properties don't always trade at the median. Lower-priced units typically offer higher cap rates but harder operations; higher-priced properties tend to compress cap rates while attracting better tenants. All-cash assumptions below:
| Tier | Price | Rent/Mo | NOI/Yr | Cap Rate | Monthly CF |
|---|---|---|---|---|---|
| Below median (~75% price) | $158K | $1,258 | $9,819 | 6.2% | $818 |
| At median | $210K | $1,480 | $11,293 | 5.4% | $941 |
| Above median (~125% price) | $263K | $1,702 | $12,766 | 4.9% | $1,064 |
Cap rate is just one piece. Real estate returns come from four sources: cash flow, appreciation, principal paydown, and tax benefits. Assuming 20% down conventional financing at 7% and a 5-year hold at Jackson's historical appreciation rate of 1.6%:
On a $42K down payment, that's a 70.0% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Automated checks against the underlying data — surface only the risks that actually apply to Jackson, not generic boilerplate:
Pre-filled with Jackson medians. Adjust to match a specific property.
Factor in financing to see your actual return on invested capital in Jackson.
Jackson, MS has a population of 153,701 and has been growing at -0.2% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $210,000 paired with median rents of $1,480/mo produces an estimated cap rate of 6.33%.
Property taxes at 0.65% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 8% runs above average, which increases cash flow volatility and warrants conservative underwriting.
At a price-to-income ratio of 5.7x, homes cost about 5.7 times the local median income of $36,800. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 1.6% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Jackson offers attractive fundamentals for rental investors. low taxes, and cap rates above 6% put it in the upper tier of investable markets.