Published market hub · September 2026
Memphis, TN: a typical house misses 1.20x; the lender's ratio passes under about $131,200, and a house cash flows under about $118,000
At typical rent ($1,232, across rentals of all kinds, apartments included, not a house rent), a house at the typical price ($145,335) comes in at 1.08x, short of the 1.20x cushion. At the typical price, a house needs about $1,364 a month in rent to clear 1.20x. At $1,232 a month, the lender's 1.20x ratio works up to about $131,200 (a $98,400 loan); positive cash flow after a 25% set-aside for vacancy, repairs and management needs about $118,000. Many lenders accept 1.00x, and a house at the typical price clears it on a $109,000 loan; no house clears both 1.20x and a $100,000 loan at this rent, and a lower price makes the loan smaller.
The numbers
DSCR is the monthly rent divided by the full monthly payment (principal, interest, taxes, insurance and any HOA dues). At 1.20x the rent is 20% more than the payment. We use 1.20x as a cushion; many DSCR lenders accept as low as 1.00x. A lender sizes the loan on the lease or the appraiser's estimate of market rent (Form 1007), often the lower of the two, not on a city figure.
Typical rent
$1,232/mo
A typical asking rent across rentals of all kinds, apartments included, not a house rent. This page has no 3-bedroom figure, so every ratio on this page uses this rent. A specific house can rent for more or less than this figure, so run the numbers on that house's own rent.
Max monthly payment
$1,027/mo
Typical rent ($1,232/mo) divided by 1.20 (a 1.20x DSCR). Taxes and insurance are included in this payment; budget vacancy and repairs on top. Check it against your own numbers.
Typical home value
$145,335
The typical home value for the city as a whole.
Rent-to-price
10.2%
A year of rent divided by the typical home value. Higher means the rent does more of the work.
HUD 2-bedroom Fair Market Rent
$1,274/mo
A government figure for a 2-bedroom unit, set near the 40th percentile of metro rents. It is not a listing rent: a specific house can rent for more or less, so run the ratios on the house's own rent.
A typical house
1.08x DSCR
A house at $145,335 renting for $1,232 a month falls short of 1.20x and loses about $213 a month after a 25% set-aside for vacancy, repairs and management. The lender's ratio works near $131,200 (10% lower); a house that rents for more, or a bigger down payment, also gets there.
Price that works
up to about $131,200
The most a house can cost at 1.20x if it rents for $1,232 a month. That clears the lender's ratio; to also cover a 25% set-aside for vacancy, repairs and management, the price needs to be near $118,000. At 1.00x, many lenders' floor, it is about $157,300, though lenders often charge more or lend less there. Every price here assumes the house rents for $1,232; check its own rent.
Assumptions for every price on this page: 25% down and a 7.5% 30-year rate. Property taxes about 1.6% and landlord insurance about 1.5% of the price a year, a rough estimate for Memphis-area rentals. No HOA dues; add them if the house has them.
- Property taxes, insurance, flood insurance, and HOA dues can push the full monthly payment beyond what rent supports.
ZIP codes
Where to start
38127 Frayser and 38118 Oakhaven / Parkway Village clear 1.20x at the median price, but a 75% loan on a median house there is under the common $100,000 minimum, so no ZIP code here passes both at its median. A single house there needs a lender with a lower minimum; a 2-4 unit property can clear it.
| ZIP code | Median price | Median rent | Price that works | Verdict |
|---|---|---|---|---|
| 38127 Frayser | ~$105,500 | ~$1,200/mo | up to ~$127,700 | Clears 1.20x at the median (1.45x); loan under the common $100,000 minimum |
| 38118 Oakhaven / Parkway Village | ~$130,000 | ~$1,255/mo | up to ~$133,600 | Clears 1.20x at the median (1.23x); loan under the common $100,000 minimum |
| 38104 Midtown | ~$260,000 | ~$1,300/mo | up to ~$138,300 | Median house misses 1.20x (0.64x); 1.20x needs a price about 47% under the median |
Price that works: the most you could pay at 1.20x on that ZIP's median rent, on the assumptions above. A ZIP works when its median price is at or under that price and a 75% loan on it reaches the common $100,000 minimum; otherwise the verdict gives the ratio at the median price and what is missing. ZIP codes without both a median price and a median rent are not listed.
38127 Frayser: A 75% loan on a median house is about $79,000, under the minimum loan amount of about $100,000 many DSCR lenders set (the smallest loan they will make). Even at the price that works here (about $127,700), the loan is about $95,800, so a single house here rarely fits both the ratio and the minimum. Ask lenders for their minimum, or look at a small multifamily property.
38118 Oakhaven / Parkway Village: A 75% loan on a median house is about $98,000, under the minimum loan amount of about $100,000 many DSCR lenders set (the smallest loan they will make). At the median rent, only a price between about $133,400 and $133,600 clears both 1.20x and that minimum; ask the lender for its minimum before you offer.
Monthly read · September 2026
What we would do this month
The short answer
Memphis deserves more research, but not a citywide buy. More listings and lower median listing prices give you choices, while typical rent still limits what a typical house can carry. First, verify the rent and full monthly costs for the specific house.
What to do next
- Ask your lender: What rent, property costs, loan minimum, and required cash reserves will you use for this specific house?
These are market numbers. A specific house needs its own rent, tax and insurance numbers, and the example deal is an illustration, not a loan quote.
When a specific house's rent covers its full payment with the 1.20x cushion, Sphinx Capital's loan application is the next step. Continue to application
Earlier monthly reads
Each used that month's numbers; the figures above are current.
- August 2026: While Memphis presents a moderate DSCR landscape, savvy investors can unlock potential by targeting specific ZIP codes like 38127, leveraging buyer negotiation power, and meticulously managing expenses to achieve target returns.
- July 2026: Memphis presents a compelling, albeit selective, DSCR opportunity. High inventory and aggressive price cuts offer significant buyer leverage. While the city's typical rent of $1,086/mo suggests a $905/mo payment ceiling at a 1.20x DSCR, investors must zero in on the strongest ZIP codes, particularly 38128 and 38127, where rent-to-price ratios exceed city averages. A disciplined, ZIP-by-ZIP acquisition strategy, coupled with rigorous local rent verification and strict adherence to the $905/mo payment threshold after all expenses, is crucial for success.
- June 2026: The Memphis market still offers attractive DSCR opportunities. A 1.20x DSCR clears with a $905/month monthly payment ceiling, while ZIP-level rent-to-price ratios (up to 19.1%) and 8.3% year over year price growth point to cash-flow upside. Focus on ZIP 38106 and nearby promising ZIPs, but verify rent and value data before committing.
- May 2026: With inventory up 25% and median prices down 11%, Memphis offers DSCR investors a window to acquire at 1.2x+ DSCR in Tier-1 ZIPs, refinance in 12-18 months, and capture rent growth over 3-5 years.
- March 2026: A concise, investor-focused snapshot of Memphis’s DSCR landscape, highlighting buyer leverage, rent-to-price dynamics, ZIP-level priorities, and a 90-day action plan.
- February 2026: High investor concentration and a 94.7% sold-to-list give a negotiation edge in Cordova and Bartlett. With a rough max monthly payment of $1,090/mo, the market is still attractive for DSCR investors who can work within the city-wide typical rent gap.
Buy, refinance, or hold
What to do if you are buying, refinancing, or holding
Buying
At $1,232 a month, the lender's ratio works only under about $131,200, which puts a 75% loan under the common $100,000 minimum; at lenders that accept 1.00x, a house at the typical price ($145,335) clears that ratio on a $109,000 loan, and a house that rents for more can reach 1.20x.
Refinancing
Check the property’s current rent, value, and full monthly payment before pursuing a refinance.
Holding
Hold if rent covers the full payment and leaves room for vacancy and repairs; reassess if taxes or insurance rise.
Application next step
Found a property here that works on your numbers?
Continue into Sphinx Capital's loan application when the rent on a specific property covers its full monthly payment with the 1.20x cushion. DSCRInfo will carry this market context into the application start.
If you apply with Sphinx Capital from this page, DSCRInfo may receive referral compensation. See disclosures
Risks
What could make this market stop working
- A thin gap between rent and payment leaves little room for vacancy or repairs.
- A low listing price can hide repair costs or slow rent-up; inspect the property and confirm its likely rent.
- ZIP-level prices and rents differ widely, so city figures may not fit a specific property.
Buying conditions
What else we see
- Buyers have more choice: active listings are up 11.73% year over year, median listing prices are down 15.74%, and homes take a median 73 days to sell. Use that time to inspect carefully and negotiate on purchase price.
About these numbers
How this page is built
Updated September 25, 2026. City rent and home value, ZIP code prices and rents, and listing activity come from public sources, including U.S. federal and government datasets and public property listings. They show whether a market is worth a look, not whether a specific house works.
Every county in Tennessee, with rent, property tax, insurance, vacancy and jobs: Tennessee rent, property tax and insurance by county.
Application next step
Ready to apply?
Apply with Sphinx Capital once the market numbers and your property's numbers agree.