Kingsport, TN Cap Rate 5.01%
Kingsport is a budget-friendly market in the South with a small but investable metro of 50,000. At a 5.01% estimated cap rate, this is a moderate market where rents of $1,370/mo lag behind home prices. With a median home price of $240,000 and steady population growth supports long-term rental demand, Kingsport 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
Market Data
2026 Market Update: Kingsport
Kingsport's 0.6% rent-to-price ratio is well below the 1% rule. At median prices of $240,000, the $1,370/mo rent produces only $1,002/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 ($48K at 7%) would result in approximately $-275/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.
With 1.6% annual population growth paired with 3.1% home appreciation, Kingsport offers a rare combination of current cash flow and future equity upside. The 14.6x gross rent multiplier suggests the market hasn't fully priced in this growth trajectory.
Deal Modeling & Scenarios for Kingsport
All figures below are computed from Kingsport's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
Property Tax Bill in Real Dollars
At 0.65% effective rate on the $240,000 median price, the annual tax bill is $1,560 — 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.
5-Year Cap Rate Trajectory
If Kingsport continues appreciating at 3.1%/yr while rents grow at a conservative 3%/yr, cap rate compresses as price growth outpaces rent. Year-by-year projection at the median:
| Year | Est. Price | Est. Rent/Mo | Cap Rate |
|---|---|---|---|
| Today | $240K | $1,370 | 5.0% |
| Year 1 | $247K | $1,411 | 5.0% |
| Year 2 | $255K | $1,453 | 5.0% |
| Year 3 | $263K | $1,497 | 5.0% |
| Year 4 | $271K | $1,542 | 5.0% |
| Year 5 | $280K | $1,588 | 5.0% |
Three Financing Scenarios
Same median-priced Kingsport 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 | $240K | $1,002 | $12,023 | 5.0% |
| 20% down conventional @ 7% | $55K | $-275 | $-3,299 | -6.0% |
| 25% down DSCR @ 8.5% | $70K | $-382 | $-4,587 | -6.6% |
Three Price Tiers: Below, At, and Above the Median
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) | $180K | $1,165 | $9,056 | 5.0% | $755 |
| At median | $240K | $1,370 | $10,353 | 4.3% | $863 |
| Above median (~125% price) | $300K | $1,575 | $11,649 | 3.9% | $971 |
Total Return Over a 5-Year Hold
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 Kingsport's historical appreciation rate of 3.1%:
On a $48K down payment, that's a 78.1% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Risk Flags Specific to Kingsport
Automated checks against the underlying data — surface only the risks that actually apply to Kingsport, not generic boilerplate:
Cap Rate Calculator — Kingsport
Pre-filled with Kingsport medians. Adjust to match a specific property.
Cash-on-Cash Return — Kingsport
Factor in financing to see your actual return on invested capital in Kingsport.
Is Kingsport a Good Place to Invest in Rental Property?
Kingsport, TN has a population of 50,000 and has been growing at 1.6% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $240,000 paired with median rents of $1,370/mo produces an estimated cap rate of 5.01%.
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 5.7% 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 $53,744. This relatively affordable ratio suggests a deep pool of renters who find buying out of reach, supporting rental demand. 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: Kingsport presents moderate opportunities. Cap rates near 5.01% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.