Cap rates 5.5–6.5% · Median price $280,000 · Median rent $1,400/mo · Population 180K
Chattanooga has America's fastest municipal internet (gigabit fiber) which has attracted a tech and remote worker community. Combined with outdoor adventure tourism, it's become a surprising STR and LTR hotspot.
Here's what the numbers look like on a typical Chattanooga rental at current market rates (20% down, 7.5% rate, standard expenses):
| Metric | As-Is (Current Rents) | Stabilized (Market Rents) |
|---|---|---|
| Purchase Price | $280,000 | $280,000 |
| Down Payment (20%) | $56,000 | $56,000 |
| Monthly Rent | $1,260 | $1,400 |
| Monthly Mortgage | $1,566 | $1,566 |
| Monthly OpEx (est 35%) | $441 | $490 |
| Est. Monthly Cash Flow | $-747/mo | $-656/mo |
| Cap Rate | 3.5% | 3.9% |
* Estimates only. Uses 20% down, 7.5% rate, 30yr term, 35% expense ratio, 5% vacancy. Run your own numbers with the calculator below.
Best for cash flow: Focus on workforce housing in established neighborhoods with strong employer anchors. Avoid chasing the highest raw yield numbers — the 10% cap rate in a declining neighborhood often means vacancy and management headaches that destroy returns.
Best for appreciation: Target neighborhoods within 2 miles of job centers, universities, or transit that are in the early stages of gentrification. Look for the coffee shop / yoga studio signal — amenities follow renters, and renters follow amenities.
Best for STR: Tourism-driven markets near {name}'s key attractions offer 2–3× LTR revenue but require professional management and local regulatory compliance.
DSCR Loans: Most Chattanooga properties qualify for DSCR financing with a 1.0+ ratio. Use our DSCR Calculator to check qualification before making an offer.