Coffee County

Coffee County sits at a gross rent-to-price ratio of 5.87%, which puts it squarely in appreciation territory rather than cash-flow territory. At a 3.81% cap rate and a modeled cash-on-cash return of negative 10.77% at 6.85% interest, the numbers are telling you plainly that this is not a market where you can buy at the median and expect the rent to carry the deal. Monthly rent of $1,506 against a mortgage of $1,615 plus $527 in estimated expenses produces a negative $636 per month before any vacancy or capital expenditure. That gap is not a rounding error, it is a structural feature of a market where home prices ($308,088 median) have outpaced rents enough to compress yields below what conventional financing can support. Year-over-year appreciation of 1.62% is modest but positive, and the affordability index of 64 suggests the market is not egregiously overpriced by local-income standards, which provides some floor under values. This is a market where the return story, if there is one, lives in long-term price appreciation, not monthly cash flow.

The investor profile this market suits best is someone with patient capital, low or no leverage, or access to significantly below-market acquisition prices. A pure cash-flow buyer running conventional debt at current rates will be fighting a losing battle against that negative $636 monthly figure. An appreciation buyer with a five-to-ten year hold horizon, buying at or below the median, can tolerate the monthly drag if they believe local values will continue to trend upward from the current $308,088 base. The affordability score of 64 and the still-reasonable price point relative to coastal markets make that a defensible thesis, though not a guaranteed one. A value-add operator who can acquire distressed assets at a meaningful discount to median and force equity through renovation has the clearest path to making the numbers work, because the underlying rent level of $1,506 is real demand, the problem is acquisition cost, not rental market weakness.

The taxInsurance picture here is not a headache. Combined monthly property tax and insurance runs $275, based on a state-average effective tax rate of 0.71% and an insurance rate of 0.36%. Tennessee's property tax environment is relatively benign at that rate, and neither figure alone is going to materially alter your underwrite. The $275 combined monthly carry cost is already baked into the $527 estimated expense figure above, so there is no hidden surprise, but it is worth confirming the actual Coffee County levy when you underwrite a specific deal, since the 0.71% is a state-average estimate and township-level rates can vary. The insurance rate of 0.36% is worth flagging as an input to watch, not because it is alarming here, but because Tennessee sits in a hail and tornado corridor and carrier availability can shift.

The primary risk in Coffee County is concentration. At 58,080 residents, this is a small, single-market county without the economic diversification that buffers vacancies during a local downturn. No economic anchor data was provided for this county, so it would be imprudent to speculate about employer stability or rental demand drivers. What the population size does tell you is that tenant depth is limited. A handful of large employers contracting, or a single large employer departing, can move vacancy rates in ways that would be invisible in a metro with ten times the population. Regulatory risk is not flagged in the data, but small Tennessee counties have generally been landlord-friendly historically. The stability score of 50 is the lowest subscale score in the dataset, and it is the number most worth interrogating before committing capital.

Compared to the neighboring counties in the data, Coffee is not the most compelling buy-and-hold option on pure yield metrics. Shelby County (Memphis) posts a 7.58% rent-to-price ratio on a $215,746 median, and Madison County comes in at 7.48% on a $222,286 median. Both of those neighbors materially outperform Coffee on gross yield, and both score comparably overall (61 and 60, respectively, versus Coffee's 59). Haywood County's 7.27% ratio on a $167,218 median is even more aggressive on paper, though Haywood and Wayne County at $172,328 both suggest thinner markets with their own concentration risks. Fayette County at $366,798 and a 6.35% ratio is a slightly better yielder than Coffee but at higher price points. If your primary goal is cash flow and you are comparing Tennessee counties in this peer group, Madison or Shelby offer better arithmetic at similar or lower price points. Coffee County earns the look when you believe in the specific submarket's price appreciation story, when you can acquire below the $308,088 median, or when value-add execution is core to your strategy and you have identified specific distressed inventory. On a straight yield comparison, the neighboring data does not favor Coffee at median prices.