Tupelo, MS Cap Rate 5.69%
Tupelo is the regional anchor of Northeast Mississippi — uniquely positioned at the intersection of three economic forces: the Toyota Mississippi assembly plant just north in Blue Springs, the North Mississippi furniture-manufacturing cluster, and Elvis Presley's birthplace tourism. The 5.69% cap rate at a $185,000 median price keeps the 0.64% rent-to-price ratio at or close to functional. Population growth at 0.2%/yr is essentially flat.
Employment is anchored by Toyota Mississippi (the assembly plant in Blue Springs ~10 miles north of Tupelo — builds the Corolla and related models for the North American market, with the broader supplier ecosystem extending throughout Lee County and into surrounding counties; one of the larger US Toyota plants by output), the North Mississippi furniture-manufacturing cluster (Tupelo and surrounding counties are historically one of the major US upholstered-furniture manufacturing regions — Lane, Ashley Furniture suppliers, and dozens of mid-sized furniture manufacturers concentrate here), North Mississippi Medical Center (the dominant regional medical system, headquartered in Tupelo — one of the larger US private hospital systems for a rural-anchor metro), the broader BancorpSouth (now Cadence Bank) operations, the Elvis Presley Birthplace and Museum (tourism anchor), Itawamba Community College, the broader Lee County government, and a meaningful logistics base. Submarkets stratify cleanly: the historic Highland Circle and Joyner areas are walkable urban-historic with strong appreciation; the broader West Tupelo and Belden draw family-school suburban rentals; the broader Lee County extends with rural-edge construction; central and parts of southern Tupelo offer deeper-value workforce inventory.
Mississippi property tax at 0.66% is among the lowest in the country. State income tax is graduated with a top rate near 4.4% — and Mississippi is in the process of phasing toward eliminating its income tax entirely, which if completed would be a meaningful long-term cash-flow improvement. Insurance is reasonable (Tupelo sits inland — no Gulf hurricane exposure, though tornado/severe-weather risk is meaningful; the 2014 EF3 tornado that hit Tupelo is the relevant catastrophic reference). The structural advantages: Toyota + NMMC + furniture cluster is a genuinely diversified employer mix unusual for a Mississippi metro this size; Toyota's long-term commitment to Mississippi appears durable; tax structure is among the most favorable nationally; cost basis is materially below the Memphis or Birmingham metros. The structural risks: Toyota concentration matters (any major program shift would affect supplier employment); furniture-manufacturing employment has been pressured by overseas competition for decades; tornado/severe-weather exposure is real. For investors who want a defensible Mississippi mid-size market with manufacturing anchors at one of the lowest cost bases in the country, Tupelo is the most underrated North Mississippi option.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
Market Data
2026 Market Update: Tupelo
Tupelo's 0.6% rent-to-price ratio is well below the 1% rule. At median prices of $185,000, the $1,190/mo rent produces only $877/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 ($37K at 7%) would result in approximately $-107/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 13.0x gross rent multiplier and 7.4% vacancy rate position Tupelo as a value-oriented market. With annual appreciation at 1.8%, total returns (cash flow + equity growth) run approximately 7.5% before financing leverage.
Deal Modeling & Scenarios for Tupelo
All figures below are computed from Tupelo's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
Property Tax Bill in Real Dollars
At 0.66% effective rate on the $185,000 median price, the annual tax bill is $1,221 — that's below national average (-38% 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 Tupelo continues appreciating at 1.8%/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 | $185K | $1,190 | 5.7% |
| Year 1 | $188K | $1,226 | 5.8% |
| Year 2 | $192K | $1,262 | 5.8% |
| Year 3 | $195K | $1,300 | 5.9% |
| Year 4 | $199K | $1,339 | 6.0% |
| Year 5 | $202K | $1,380 | 6.0% |
Three Financing Scenarios
Same median-priced Tupelo 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 | $185K | $877 | $10,522 | 5.7% |
| 20% down conventional @ 7% | $43K | $-107 | $-1,288 | -3.0% |
| 25% down DSCR @ 8.5% | $54K | $-190 | $-2,282 | -4.3% |
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) | $139K | $1,012 | $7,832 | 5.6% | $653 |
| At median | $185K | $1,190 | $8,977 | 4.9% | $748 |
| Above median (~125% price) | $231K | $1,369 | $10,133 | 4.4% | $844 |
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 Tupelo's historical appreciation rate of 1.8%:
On a $37K down payment, that's a 59.2% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Risk Flags Specific to Tupelo
Automated checks against the underlying data — surface only the risks that actually apply to Tupelo, not generic boilerplate:
Cap Rate Calculator — Tupelo
Pre-filled with Tupelo medians. Adjust to match a specific property.
Cash-on-Cash Return — Tupelo
Factor in financing to see your actual return on invested capital in Tupelo.
Is Tupelo a Good Place to Invest in Rental Property?
Tupelo, MS has a population of 50,000 and has been growing at 0.2% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $185,000 paired with median rents of $1,190/mo produces an estimated cap rate of 5.69%.
Property taxes at 0.66% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 7.4% runs above average, which increases cash flow volatility and warrants conservative underwriting.
At a price-to-income ratio of 4.7x, homes cost about 4.7 times the local median income of $39,333. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 1.8% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: Tupelo presents moderate opportunities. Cap rates near 5.69% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.