5 Best Cities in Tennessee for Real Estate Investment

These are the best cities in Tennessee for real estate investment in 2025.

Learn where to buy the most profitable investment properties, short term rentals and flip homes.

Based on moving trends, population growth and local market trends.

Let’s get started.

Knoxville

There are a number of reasons why the Knoxville real estate market is such a desirable destination for Tennessee real estate investors. Knoxville is the third-largest city in the state, and its population growth has only made the housing market all the more competitive.

One of the most compelling reasons to invest in Knoxville real estate is the diversity of properties available. From trendy Downtown lofts to historic homes, the city offers a wide range of rental investment property.

The prime location of Knoxville real estate adds to the appeal of the city. Located just a few hours from both Nashville and Memphis, two of Tennessee’s largest cities, Knoxville boasts proximity to major economic hubs and transportation networks. This strategic location not only enhances the city’s accessibility but also contributes to the overall attractiveness to potential residents as well as investors.

1 bedroom rent: $1,279 (-4% YoY)
Median days on the market: 50
Median home price: $320,000 (+7.4%)
Homes sold above list: 23.7%
Rental market data | Housing market data

Nashville

Nashville is home to one of the hottest real estate investment markets in Tennessee. The city stands out as one of America’s fastest-growing cities. Experiencing a remarkable surge in population over the recent years. This population growth not only reflects the city’s appeal to newcomers but also creates a large tenant pool for potential real estate investors.

With more people seeking housing options, there’s a consistent demand for rental properties. Real estate investors are in turn provided with stable sources of income and the potential for long-term appreciation on their investment properties. The economic strength of Nashville further bolsters its appeal in the rental market.

The well-known “Music City” boasts a thriving tourism industry, contributing to its robust and resilient economy. As a result, Nashville offers a fertile environment for business growth and innovation, attracting both established companies and startups alike. This economic vibrancy translates to a wealth of job opportunities. Which in turn fuels the demand for housing and does wonders for property values.

1 bedroom rent: $1,767 (-6% YoY)
Median days on the market: 60
Median home price: $468,950 (+6.2%)
Homes sold above list: 12.9%
Rental market data | Housing market data

Memphis

Job growth and development play a pivotal role in driving demand for the Memphis real estate market. The city’s ideal location makes it an attractive hub for businesses looking to save on shipping costs and streamline distribution operations.

Major corporations such as Nike, International Paper, FedEx, and Amazon have established significant presence in Memphis. This creates a thriving local economy and drives demand for housing. The influx of employment opportunities contributes to a steady demand for rental properties, both long-term and short-term.

Memphis also offers high affordability for real estate investors, with relatively low property taxes compared to other cities. The city’s low vacancy rates are on par with the national average. The robust job market coupled with affordable housing costs and high demand ensures that rental properties remains consistently occupied. Minimizing vacancy risks for investors and providing a steady income stream.

1 bedroom rent: $1,160 (+9% YoY)
Median days on the market: 40
Median home price: $171,000 (+2.4%)
Homes sold above list: 13.2%
Rental market data | Housing market data

Chattanooga

Chattanooga offers median home prices that are right on the line with the national average. Providing investors with low entry points into the real estate investment markets. This affordability enables a broader range of investors to participate in real estate opportunities. Fostering more inclusive and dynamic real estate markets.

The price-to-rent ratios and above-average real estate appreciation in Chattanooga provide yet another enticing opportunity for rental property investors. The city’s supportive regulatory framework and pro-business policies create a conducive environment for property investment and entrepreneurship. Fostering a thriving real estate market ecosystem.

Real estate investors in Chattanooga favor long-term rental property over short-term flips due to higher acquisition costs and lower profit margins associated with flipping. This shift in investor preferences toward buy-and-hold assets underscores the city’s reputation as a stable and reliable market.
1 bedroom rent: $1,387 (+1% YoY)
Median days on the market: 51
Median home price: $341,000 (+13.7%)
Homes sold above list: 33.3%
Rental market data | Housing market data

Johnson City

Johnson City has become increasingly popular over recent years. One key advantage of investing in this Tennessee city is that both novice and seasoned investors can benefit. Johnson City has been recognized as one of the more affordable places to live in Tennessee.

Making it an attractive option for individuals and families seeking affordable rental markets. This growing demand combined with affordability presents a wealth of investment opportunities for those looking to get into residential real estate investments.

The availability of Johnson City foreclosed properties at prices well below the local median sale price adds to the competitive market. These foreclosure listings present investors with the chance to acquire properties at discounted rates. Potentially yielding higher returns on investment through fix and flipping or long-term rental income.

1 bedroom rent: $827 (0% YoY)
Median days on the market: 45
Median home price: $253,000 (+12.8%)
Homes sold above list: 14.5%
Rental market data | Housing market data

Data updated December 28, 2024