1st Advantage MortgageMemphis requires a city short-term rental permit for each unit, and prices here are low enough that many buyers run into lender minimums.
Population: 610,919 (U.S. Census Bureau city and town estimate, July 1, 2024).
What drives rents in Memphis
Memphis renters work in logistics around FedEx's world hub and the airport, healthcare systems like Methodist and Baptist, St. Jude, the University of Memphis and the river economy. Prices are low and rent-to-price ratios are strong, which is why Memphis draws out-of-state buyers, but neighborhoods vary sharply from block to block.
Districts that matter in Memphis
- Midtown and Cooper-Young. older bungalows and duplexes near Overton Square
- Cordova and Germantown. eastern suburbs with newer single-family rentals
- Whitehaven. southwest Memphis with lower-priced homes near Graceland
- Downtown and South Main. loft and apartment conversions
- Binghampton and Berclair. older stock with low entry prices
Rules a Memphis landlord should know
Memphis requires a short-term rental permit before operating or advertising, with each unit holding its own permit under Chapter 5-44 (Ordinance 5856, effective July 1, 2023), filed through the Develop901 portal with the number displayed on listings. Properties outside Memphis in Shelby County follow a separate county ordinance, so confirm which jurisdiction a property falls in. Long-term leases do not need that permit.
Local rules checked October 2026 against: Memphis short-term rental registration, Memphis code Chapter 5-44. Rules change, so confirm with the city before you rely on them.
Insurance, flood and tax context
Tennessee has no state personal income tax, and Shelby County property taxes are set at county and city rates, so a Memphis city address and a Shelby County address can differ. Because purchase prices are low, check the lender's minimum loan size on the first call.
Memphis by the Census numbers
Two Census medians frame the Memphis rental market: gross rent of $1,181 a month, which is close to the Tennessee median of $1,189, and a home value of $169,000, which is well below the Tennessee median of $286,700. The gross rent-to-value ratio for Memphis works out to 8.4% (twelve months of median rent divided by median value), a higher-yield profile than most markets in this region. The figure combines all rental types with all owner-occupied homes, so it is a screening number and not an appraisal.
| Indicator | Tennessee | Memphis | Difference |
|---|---|---|---|
| Persons per household | 2.45 | 2.39 | |
| Share in 2-4 unit buildings | 5.6% | 8.7% | +56% |
| Share of homes detached | 68.3% | 59.5% | -13% |
| Long commuters, 45 min plus | 15.2% | 4.9% | -68% |
| Renters paying 30%+ of income | 48.8% | 55.7% | +14% |
| Units sitting vacant | 10.2% | 12.7% | +25% |
| Typical construction year | 1987 | 1970 | |
| Annual rent divided by value | 5.0% | 8.4% | +69% |
| Households that rent | 33.1% | 55.1% | +67% |
| Tax as a share of home value | 0.50% | 1.09% | +117% |
| Annual property tax bill, median | $1,442 | $1,845 | +28% |
| Household income, median | $69,595 | $51,736 | -26% |
| Typical owner-occupied value | $286,700 | $169,000 | -41% |
| Typical monthly rent | $1,189 | $1,181 | -1% |
| Residents (Census estimate) | 7,066,383 | 618,980 |
Tenure leans toward renters here, at 55.1% of occupied housing (well above the Tennessee median of 33%), which supports a durable pool of prospective tenants. Median household income of $51,736 (well below the Tennessee median of $69,595) sets the ceiling for rent growth, and 56% of renters already spend 30 percent or more of income on rent.
Housing stock and vacancy in Memphis
Multifamily matters in Memphis. About 34% of housing units are in multi-unit buildings, and 9% are in two to four unit properties that fit standard DSCR programs. Homes here date to 1970 at the median, which is old enough to need system replacement but modern enough to avoid the worst surprises.
The Census counts 13% of Memphis housing units as vacant, with a rental vacancy figure of 8.2%.
Reading Memphis as an investor
Gross yield of 8.4% puts Memphis in a comfortable range for DSCR math, so the questions shift from whether the rent covers the payment to how durable that rent is. Homes of this vintage age unevenly, so rent comparables should come from properties in similar condition. A large renter population (55%) supports leasing, though it also means many competing landlords, so condition and price positioning count.
Carrying costs in Memphis
Homeowners in Memphis paid a median $1,845 in real estate taxes, well above the Tennessee median of $1,442, an effective rate near 1.09% of home value against 0.50% statewide. In rent terms, the tax bill equals roughly 13% of twelve months of median rent.
FEMA's National Risk Index (version 1.20, December 2025) rates Shelby County as relatively high overall for natural hazard risk, with cold waves (very high), tornadoes (very high) and heat waves (relatively high) among its leading hazards.
| Hazard in Shelby County, FEMA index | Level |
|---|---|
| Earthquakes exposure | Relatively High |
| Heat waves exposure | Relatively High |
| Tornadoes exposure | Very High |
| Cold waves exposure | Very High |
| Social vulnerability score | Relatively High |
| Annualized loss estimate | Relatively High |
| Composite risk | Relatively High |
Many investors meet insurance too late, so get a quote tied to the Memphis property's roof age and flood zone before you waive your inspection period.
Working the Memphis rent math
The quick test for Memphis: rent of $1,181 divided by a 1.25 ratio allows a total payment of $945, and subtracting $154 in monthly taxes leaves $791 for the loan, insurance and dues. At 1.00 the allowance is the full $1,027.
Legal checks before a Memphis purchase
State tax treatment of short stays, as it applies to Memphis. Tennessee charges sales tax on short-term rentals and a local occupancy tax on stays of 30 consecutive days or fewer, and platforms such as Airbnb collect both on bookings they process, while owners still handle business tax and direct bookings.
A landlord collecting a deposit in Memphis works under Tenn. Code Ann. § 66-28-301, which sets the limit as follows: No statutory cap (Tenn. Code Ann. § 66-28-301 sets none). A landlord who wants a Memphis month-to-month tenant out must give 30 days written notice before the periodic rental date (10 days for week-to-week) of notice. Rent increases in Tennessee: No; local governments may not control rent (Tenn. Code Ann. 66-35-102).
Statewide comparison for Memphis
Statewide context for Memphis: median home values in the other Tennessee cities below run from $234,100 to $402,100, and Memphis is $169,000.
| Market | Renter share | Tax bill | Home value | Residents | Rent |
|---|---|---|---|---|---|
| Murfreesboro | 48% | $2,323 | $402,100 | 161,445 | $1,481 |
| Cookeville | 59% | $1,590 | $305,400 | 36,088 | $917 |
| Kingsport | 40% | $1,645 | $234,100 | 56,262 | $907 |
| Memphis | 55% | $1,845 | $169,000 | 618,980 | $1,181 |
Tenants, jobs and anchors in Memphis
Self-employed workers, incorporated or not, make up 7.6% of employed residents, a group that often has irregular tax-return income and a natural fit with rent-based qualification. Around the edges, government workers are about 13% of employment, 28% of adults hold a bachelor's degree or higher and 5% of commuters travel 45 minutes or more.
The largest employers listed for Memphis include The Commercial Appeal, Memphis Daily News, Memphis Flyer and Memphis Tri-State Defender. Large, stable payrolls like these tend to anchor rental demand near their job sites. The Memphis area is home to University of Memphis. Students and employees at schools like these are a recurring source of rental demand. Memphis offers interstate access via I-40, I-55, I-69 and I-240 and air service through Memphis International Airport and Hong Kong International Airport, details that affect commute times and how easily a distant investor can inspect a property.
Investor-type guides for Memphis
From a Memphis listing to a loan
Bring the Memphis numbers to a loan officer: the rent, the taxes, the insurance and your reserves. Apply online or ask for a quote, and use the calculator to preview the ratio.
More Tennessee markets
- All Tennessee DSCR loans
- DSCR loans in Kingsport, TN
- DSCR loans in Cookeville, TN
- DSCR loans in Murfreesboro, TN
- Every market we cover
Sources and data notes
- State rule cited for Memphis hosts: Tennessee short-term rental tax manual
- For nightly stays in Memphis: Tennessee local occupancy tax
- ACS 2020 to 2024 estimates for Memphis
- National Risk Index entry, Shelby County
- Background reading: Memphis, Tennessee
- Text of Tenn. Code Ann. § 66-28-301 for Memphis landlords
Memphis's figures are ACS estimates covering 2020 to 2024 and are not exact counts. RedFlagLease (CC BY 4.0) supplies the Tennessee landlord-tenant notes, and the statutes are linked. Verified October 2026. Ordinances and statutes change, so confirm before acting.
DSCR loan availability varies by property and lender program and is not an offer to lend. See our disclosures.
Frequently asked questions
Does Memphis require a permit for an Airbnb?
Yes. Memphis requires a short-term rental permit for each unit before operating or advertising, filed through the Develop901 portal. Outside Memphis, Shelby County has its own rules.
Lease or market rent: what counts in Memphis?
On most files the lender uses the lower of the signed lease rent and the appraiser's market rent for the address in Memphis. For orientation, the Census median gross rent here is $1,181 a month.
How do taxes and insurance affect a DSCR loan in Memphis?
They do. Rent of $1,181 divided by 1.25 gives about $945 as the payment ceiling, and $154 of that is spoken for by the median Memphis tax bill.
What does Shelby County charge in property tax, in practice?
Memphis owners report a median $1,845 in annual real estate taxes, an effective 1.09% (Tennessee: 0.50%). Your own bill depends on the assessed value after purchase.
Will a lender count nightly rental income at a Memphis property?
Possible where lender guidelines allow it, subject to Memphis and Shelby County rules and to the building's association. Lenders usually average a year of bookings and discount the result.
What deposit rules apply to a TN rental?
Limit: No statutory cap (Tenn. Code Ann. § 66-28-301 sets none). Statute: Tenn. Code Ann. § 66-28-301. Confirm current text before you rely on it.
What does FEMA say about hazard risk near Memphis?
The National Risk Index gives the county an overall relatively high rating. Use that as a prompt to get quotes, not as a verdict on one Memphis street.
Can a company be the borrower on a Memphis purchase?
You do not need one, and many investors close in an entity. If you use an LLC, the lender asks for formation documents and usually a personal guaranty. Talk to your attorney and accountant about structure for a Tennessee property.