Sevierville, TN Cap Rate: 3.53% — Rental Property Analysis
Sevierville is a higher-priced market in the South with a small but investable metro of 50,000. At a 3.53% estimated cap rate, this is a appreciation-focused market where rents of $1,740/mo lag behind home prices. With a median home price of $395,000 and steady population growth supports long-term rental demand, Sevierville is primarily an appreciation play that requires creative strategies to generate positive cash flow.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
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Challenging for pure cash flow
Based on $395,000 median price and $1,740/mo median rent
Est. Cap Rate
3.53%
1% Rule
0.44%
Fails
GRM
18.9x
Price / Income
7.3x
Market Data
Median Home Price$395,000
Median Monthly Rent$1,740
Property Tax Rate0.65%
Population50,000
Population Growth1.6% / yr
Median Household Income$53,744
Vacancy Rate5.7%
Annual Appreciation3.1%
2026 Market Update: Sevierville
Sevierville's 0.4% rent-to-price ratio is well below the 1% rule. At median prices of $395,000, the $1,740/mo rent produces only $1,164/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 ($79K at 7%) would result in approximately $-937/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 18.9x gross rent multiplier and 5.7% vacancy rate position Sevierville as a growth-dependent market. With annual appreciation at 3.1%, total returns (cash flow + equity growth) run approximately 6.6% before financing leverage.
Cap Rate Calculator — Sevierville
Pre-filled with Sevierville medians. Adjust to match a specific property.
Property Details
$
$
3–8% typical
%
Monthly Expenses
0.65% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
2.98%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$11,782
net operating income
Gross Rent Multiplier
18.9x
High (>15)
1% Rule
0.44%
✗ Fails
Monthly Cash Flow
$982
before debt service
Annual Breakdown
Gross Rental Income$20,880
Less Vacancy−$1,190
Effective Income$19,690
Less Operating Expenses−$7,908
Net Operating Income$11,782
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Factor in financing to see your actual return on invested capital in Sevierville.
$
$98,750
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-10.01%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$110,600
$98,750 down + $11,850 closing
Monthly Mortgage
$1,931
on $296K loan
Monthly Cash Flow
$-922
after all expenses
Annual Cash Flow
$-11,068
before taxes
Cash Flow Breakdown
Monthly Rent$1,740
Less Expenses−$731
Less Mortgage−$1,931
Monthly Cash Flow$-922
Is Sevierville a Good Place to Invest in Rental Property?
Sevierville, 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 $395,000 paired with median rents of $1,740/mo produces an estimated cap rate of 3.53%.
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 7.3x, homes cost about 7.3 times the local median income of $53,744. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. 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: At current median prices, Sevierville is challenging for pure cash flow investing. Consider BRRRR strategies with below-market purchases, or look at neighboring metros with stronger price-to-rent ratios.
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