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Cap Rate Analysis: Knoxville, TN

Investment metrics, interactive calculators, and data-driven analysis for Knoxville rental properties.

Moderate — source deals carefully
Based on $280,000 median price and $1,380/mo median rent
Est. Cap Rate
4.26%
1% Rule
0.49%
Fails
GRM
16.9x
Price / Income
6.0x

Market Data

Median Home Price$280,000
Median Monthly Rent$1,380
Property Tax Rate0.55%
Population192,648
Population Growth1.2% / yr
Median Household Income$46,800
Vacancy Rate5.2%
Annual Appreciation3.5%

Cap Rate Calculator — Knoxville

Pre-filled with Knoxville medians. Adjust to match a specific property.

Property Details
$
$
3–8% typical
%
Monthly Expenses
0.55% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
3.60%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$10,071
net operating income
Gross Rent Multiplier
16.9x
High (>15)
1% Rule
0.49%
✗ Fails
Monthly Cash Flow
$839
before debt service
Annual Breakdown
Gross Rental Income$16,560
Less Vacancy−$861
Effective Income$15,699
Less Operating Expenses−$5,628
Net Operating Income$10,071

Cash-on-Cash Return — Knoxville

Factor in financing to see your actual return on invested capital in Knoxville.

$
$70,000
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-8.71%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$78,400
$70,000 down + $8,400 closing
Monthly Mortgage
$1,369
on $210K loan
Monthly Cash Flow
$-569
after all expenses
Annual Cash Flow
$-6,829
before taxes
Cash Flow Breakdown
Monthly Rent$1,380
Less Expenses−$580
Less Mortgage−$1,369
Monthly Cash Flow$-569

Is Knoxville a Good Place to Invest in Rental Property?

Knoxville, TN has a population of 192,648 and has been growing at 1.2% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $280,000 paired with median rents of $1,380/mo produces an estimated cap rate of 4.26%.

Property taxes at 0.55% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 5.2% is moderate and within normal parameters for a healthy rental market.

At a price-to-income ratio of 6.0x, homes cost about 6.0 times the local median income of $46,800. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 3.5% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.

Bottom line: Knoxville presents moderate opportunities. Cap rates near 4.26% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.

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