Memphis rental property analysis — calculator + 2026 cap-rate benchmarks
Run a Memphis rental deal in 60 seconds with TrueCap. Address auto-fills Tennessee property tax (~0.7-1.1% in Shelby County), HUD rent by county, and current FRED mortgage rates. Below: neighborhood cap-rate map plus the turnkey vs. direct trade-off most Memphis investors face.
Memphis neighborhood cap-rate map (2026)
Ranges reflect typical conventional-financing single-family + small-multi deals. Memphis is one of the top US markets for out-of-state investors thanks to a mature PM ecosystem; the trade-off is turnkey-pricing premium on the cleanest deals.
| Submarket | Cap rate | Rent | Character |
|---|---|---|---|
| Downtown / Harbor Town / South Main | 4-6% | $1,400-2,400 | Urban revival, lofts + condos; appreciation-leaning |
| Midtown / Cooper-Young / Overton Square | 5-7% | $1,200-1,900 | Walkable established neighborhoods, solid tenant base |
| East Memphis / Germantown (suburb) | 5-7% | $1,400-2,100 | Premium family suburbs, top schools, lower vacancy |
| Bartlett / Cordova (north suburbs) | 6-8% | $1,200-1,700 | Family neighborhoods, steady demand, newer SFR |
| Whitehaven / Westwood (south) | 8-10% | $900-1,300 | Working-class neighborhoods, common turnkey targets |
| Frayser / Raleigh (north) | 10-13% | $700-1,100 | Higher cap, real tenant + property risk; deep due diligence |
| Orange Mound / South Memphis | 12%+ | $650-1,000 | Highest cap territory; requires hands-on PM relationships |
Why Memphis keeps drawing out-of-state capital
Memphis has three things together that few markets match: low property tax (~0.7-1.1%), no state income tax, and the deepest turnkey ecosystem in the country (15+ established PM/turnkey firms competing for your business). For passive out-of-state investors, this means lower friction at every step — buy, manage, sell — than almost any other cash-flow market. The trade-off is turnkey premium pricing and the ongoing PM fee that comes with it.
Frequently asked — Memphis investing
What's a typical Memphis cap rate in 2026?
Memphis cap rates land 4-6% in Downtown/Midtown (appreciation-leaning), 5-7% in inner suburbs (East Memphis, Germantown, Bartlett, Cordova), 8-10% in workforce neighborhoods (Whitehaven, Westwood), and 10-13%+ in classic cash-flow territory (Frayser, Raleigh, Orange Mound). The headline numbers are real but turnkey-bought properties typically trade at a premium (5-10% above local owner-occupant pricing), which compresses net cap.
What's the deal with Memphis turnkey rentals?
Memphis has the deepest turnkey-rental ecosystem in the US — companies that buy distressed properties, rehab them, place tenants, and sell to out-of-state investors with their PM company attached. Pro: lowest-friction entry for first-time out-of-state landlords; deals are vetted, occupied, and managed. Con: you pay a 5-10% turnkey premium on price, plus 8-10% ongoing PM fees, so your net is typically 2-4% lower than the headline cap. Best for passive investors; bad for hands-on BRRRR operators.
What's the property tax rate in Memphis?
Tennessee has no state income tax (huge advantage), and effective property tax is among the lowest in the US (~0.6-0.7% statewide). Memphis (Shelby County) lands ~0.7-1.1% depending on city + school district overlays. Lower than every Midwest market and most Sun Belt markets. TrueCap auto-fills the TN rate; confirm with Shelby County Assessor for the specific parcel.
Is Memphis flooding/insurance a risk?
Less than coastal Florida, more than the Midwest. Memphis has Mississippi River flood zones (especially south/southwest of downtown — Riverside Drive area, Presidents Island). Most residential neighborhoods are not in flood zones. Insurance runs $1,200-2,400/yr on typical SFR — higher than Indianapolis or Kansas City but well below Tampa. Always check FEMA flood maps for the specific parcel — flood is NOT covered by standard property insurance.
How's tenant quality in Memphis cash-flow neighborhoods?
Variable. Memphis has significant economic diversity within neighborhoods, so quality screening matters more than market-wide reputation. The mature turnkey companies have decades of refined tenant screening for their target neighborhoods; independent landlords need to replicate that rigor. Eviction process in Tennessee is relatively landlord-favorable (faster than CA/NY) but still 4-8 weeks typical.
Is Memphis better than Detroit for cash flow?
Different trade-offs. Detroit has higher headline caps but materially higher operational risk + capex surprises on older housing stock. Memphis has slightly lower caps (10-13% vs 15%+) but more mature PM market, newer housing stock (more 1960s+), and warmer climate (lower deferred-maintenance shock). For first-time out-of-state investors: Memphis is the safer bet. For experienced BRRRR operators with on-the-ground crews: Detroit can produce better numbers.
Run your next Memphis deal in 60 seconds
Paste the address. Tennessee tax, HUD rent for Shelby County, and current rate auto-fill. Cap rate, CoC, DSCR, and monthly cash flow in 1 second. Free to start. No card required.
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