Jackson, TN Cap Rate: 6.27% — Rental Property Analysis
Jackson is a budget-friendly market in the South with a smaller market with 68,000 residents. At a 6.27% estimated cap rate, this is a solid market where rents of $1,360/mo lag behind home prices. With a median home price of $200,000 and population is roughly stable, Jackson stands out as a market worth serious analysis for rental investors.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
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Strong investment fundamentals
Based on $200,000 median price and $1,360/mo median rent
Est. Cap Rate
6.27%
1% Rule
0.68%
Fails
GRM
12.3x
Price / Income
4.5x
Market Data
Median Home Price$200,000
Median Monthly Rent$1,360
Property Tax Rate0.56%
Population68,000
Population Growth0.4% / yr
Median Household Income$44,200
Vacancy Rate6.5%
Annual Appreciation2.2%
2026 Market Update: Jackson
Jackson's 0.7% rent-to-price ratio is well below the 1% rule. At median prices of $200,000, the $1,360/mo rent produces only $1,045/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 ($40K at 7%) would result in approximately $-19/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 12.3x gross rent multiplier and 6.5% vacancy rate position Jackson as a value-oriented market. With annual appreciation at 2.2%, total returns (cash flow + equity growth) run approximately 8.5% before financing leverage.
Cap Rate Calculator — Jackson
Pre-filled with Jackson medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
0.56% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
5.20%Moderate
Net Operating Income ÷ Purchase Price
NOI / Year
$10,399
net operating income
Gross Rent Multiplier
12.3x
Good (<15)
1% Rule
0.68%
✗ Fails
Monthly Cash Flow
$867
before debt service
Annual Breakdown
Gross Rental Income$16,320
Less Vacancy−$1,061
Effective Income$15,259
Less Operating Expenses−$4,860
Net Operating Income$10,399
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Factor in financing to see your actual return on invested capital in Jackson.
$
$50,000
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-4.05%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$56,000
$50,000 down + $6,000 closing
Monthly Mortgage
$978
on $150K loan
Monthly Cash Flow
$-189
after all expenses
Annual Cash Flow
$-2,267
before taxes
Cash Flow Breakdown
Monthly Rent$1,360
Less Expenses−$571
Less Mortgage−$978
Monthly Cash Flow$-189
Is Jackson a Good Place to Invest in Rental Property?
Jackson, TN has a population of 68,000 and has been growing at 0.4% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $200,000 paired with median rents of $1,360/mo produces an estimated cap rate of 6.27%.
Property taxes at 0.56% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 6.5% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 4.5x, homes cost about 4.5 times the local median income of $44,200. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 2.2% 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.
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