Johnson City is a mid-range market in the South with a smaller market with 72,000 residents. At a 4.27% estimated cap rate, this is a moderate market where rents of $1,330/mo lag behind home prices. With a median home price of $270,000 and steady population growth supports long-term rental demand, Johnson City offers opportunities for investors who source deals carefully.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
Johnson City's 0.5% rent-to-price ratio is well below the 1% rule. At median prices of $270,000, the $1,330/mo rent produces only $961/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 ($54K at 7%) would result in approximately $-475/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 16.9x gross rent multiplier and 5.4% vacancy rate position Johnson City as a balanced market. With annual appreciation at 3%, total returns (cash flow + equity growth) run approximately 7.3% before financing leverage.
All figures below are computed from Johnson City's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
At 0.52% effective rate on the $270,000 median price, the annual tax bill is $1,404 — that's very low (bottom 15% of US markets) (-51% 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 Johnson City continues appreciating at 3%/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 | $270K | $1,330 | 4.3% |
| Year 1 | $278K | $1,370 | 4.3% |
| Year 2 | $286K | $1,411 | 4.3% |
| Year 3 | $295K | $1,453 | 4.3% |
| Year 4 | $304K | $1,497 | 4.3% |
| Year 5 | $313K | $1,542 | 4.3% |
Same median-priced Johnson City 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 | $270K | $961 | $11,534 | 4.3% |
| 20% down conventional @ 7% | $62K | $-475 | $-5,703 | -9.2% |
| 25% down DSCR @ 8.5% | $78K | $-596 | $-7,153 | -9.1% |
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) | $203K | $1,131 | $8,805 | 4.3% | $734 |
| At median | $270K | $1,330 | $10,061 | 3.7% | $838 |
| Above median (~125% price) | $338K | $1,529 | $11,317 | 3.4% | $943 |
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 Johnson City's historical appreciation rate of 3%:
On a $54K down payment, that's a 56.8% 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 Johnson City, not generic boilerplate:
Pre-filled with Johnson City medians. Adjust to match a specific property.
Factor in financing to see your actual return on invested capital in Johnson City.
Johnson City, TN has a population of 72,000 and has been growing at 1% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $270,000 paired with median rents of $1,330/mo produces an estimated cap rate of 4.27%.
Property taxes at 0.52% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 5.4% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 6.3x, homes cost about 6.3 times the local median income of $42,800. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. Home values have appreciated at roughly 3% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Johnson City presents moderate opportunities. Cap rates near 4.27% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.