Tennessee Rental Portfolio Guide
What you need to know before building or growing a rental portfolio in Tennessee — property tax burden, state income tax, security-deposit rule, source-of-income law, and the metros that actually cash-flow after accounting for local taxes.
Tax burden on Tennessee rentals
Property tax
0.67%
effective rate on median home value
At 0.67% effective, the property tax burden sits in the lower half nationally (rank 16 of 51). Modest annual carrying cost keeps cash flow projections realistic on median-priced homes.
State income tax
None
top marginal rate
No state income tax means rental income and gains from sales flow through your federal return without a state surcharge. This is a structural tailwind for long-term portfolio compounding, especially if you plan to sell into gains later.
Security deposit rule
No statutory cap on security deposits. Landlords set the deposit at whatever the market accepts — typically one to two months' rent, sometimes more for higher-risk applicants or pets. Local ordinances may still apply.
Deposit rules change; verify current statute before drafting a lease.
Best cash-flow markets in Tennessee
Modeled monthly cash flow on a median-priced single-family purchase at 20% down, 30-year fixed, using Tennessee’s 0.67% effective property tax rate plus 25% of rent for insurance, maintenance, vacancy and management.
| Market | Median price | Median rent | Annual property tax | CF / month |
|---|---|---|---|---|
| Jackson, TN | $208,153 | $1,434 | $1,395 | $-132 |
| Memphis, TN | $247,229 | $1,441 | $1,656 | $-353 |
| Martin, TN | $193,910 | $1,006 | $1,299 | $-371 |
| Kingsport, TN | $246,242 | $1,350 | $1,650 | $-416 |
| Dyersburg, TN | $174,475 | $765 | $1,169 | $-438 |
| Newport, TN | $246,338 | $1,300 | $1,650 | $-454 |
State median across the metros: $294,568 home, $1,444 rent, $-632/mo modeled cash flow.
Track your Tennessee rental portfolio
The Pro Portfolio Tracker rolls up every property in your portfolio, auto-revalues them monthly against local price data, and flags DSCR risk and equity milestones. Each Tennessee property carries the state-specific tax burden shown above through to the cash flow calculation.
Property tax rate: Tax Foundation. Security deposit rule: state statute. Verify current law before making decisions — statutes change and this page is a planning reference, not legal or tax advice.