Memphis, TN rental property guide

Memphis is a classic high-cap-rate cash-flow market. The headline yields are real — but so is the operational reality. Investors who do well here treat property management quality as the deciding factor, not the deal.

The numbers

• Median SFR price: ~$160k metro; $90–180k in investor neighborhoods.
• Typical rent: $1,000–$1,500/mo on a $150k SFR.
• Cap rate: 7–10% B-class, double-digits in C/D (with the tenant risk that implies).
• Tennessee: no state income tax; property tax ~1.5% combined.

Neighborhoods, broadly

• East Memphis, Bartlett, Cordova, Germantown — A/B suburbs; lower yields, lower turnover.
• Berclair, Raleigh, Hickory Hill — B/C; strong cash flow if screening is tight.
• Whitehaven, Frayser — high posted yields, harder operations. Often turnkey-provider territory.

Why PM matters more here

Tenant turnover in Memphis B/C runs higher than Midwest peers. That makes lease-up speed, screening rigor, and maintenance response time the difference between an 8% pro-forma and a 3% actual. Interview three PMs, ask each for their average days-to- lease and eviction rate, and check references.

Watchouts

• Turnkey providers selling in C-class neighborhoods at A-class pro formas.
• Insurance premiums rising due to hail/wind.
• Property tax reassessment on sale.

Confirm neighborhood quality on the ground or through an independent local contact — not from photos.