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
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.
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 0.56% effective rate on the $200,000 median price, the annual tax bill is $1,120 — that's very low (bottom 15% of US markets) (-47% 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 2.2%/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 | $200K | $1,360 | 6.3% |
| Year 1 | $204K | $1,401 | 6.3% |
| Year 2 | $209K | $1,443 | 6.4% |
| Year 3 | $213K | $1,486 | 6.4% |
| Year 4 | $218K | $1,531 | 6.5% |
| Year 5 | $223K | $1,577 | 6.5% |
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 | $200K | $1,045 | $12,539 | 6.3% |
| 20% down conventional @ 7% | $46K | $-19 | $-229 | -0.5% |
| 25% down DSCR @ 8.5% | $58K | $-109 | $-1,303 | -2.2% |
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) | $150K | $1,156 | $9,311 | 6.2% | $776 |
| At median | $200K | $1,360 | $10,728 | 5.4% | $894 |
| Above median (~125% price) | $250K | $1,564 | $12,145 | 4.9% | $1,012 |
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 2.2%:
On a $40K down payment, that's a 84.6% 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, 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.