Rent vs. Buy Calculator: Is It Better to Buy in Memphis, TN?
Pre-filled with Memphis, TN's median home price ($280,000), local property tax rate (1.4%), and an estimated equivalent rent — adjust any number to match your specific situation.
Median home price
$280,000
Property tax rate
1.4%
Est. equivalent rent
$1,950/mo
Price-to-rent ratio
12×
Your situation
Buying wins over 10 years
Saves you $148,831 vs the alternative · breaks even in year 3
💡 What if the down payment was invested instead?
Adds a purple line: rent + $56,000 growing at 8%/yr
Net cost of buying
$119,424
Total cost renting
$268,255
Share in r/personalfinance, r/FirstTimeHomeBuyer, or Twitter 🏡
Assumes 30-year fixed mortgage, 3% closing costs, 1% annual maintenance, 7% selling costs. For educational purposes only — consult a financial advisor.
Compare another market:
Tennessee taxes and what they mean for your decision
Tennessee has no state income tax, and Memphis's property tax rate of 1.4% — while above the national average — applies to one of the lowest median home prices in this list at $280,000, keeping the absolute dollar tax burden moderate.
The Memphis, TN rental market
Memphis has long been a favored market for real estate investors due to its low price-to-rent ratio, with strong cash-flow potential historically attracting significant single-family rental investment, which has shaped local rent dynamics.
What makes Memphis different
Memphis has the second-lowest price-to-rent ratio in this list after Detroit, meaning homes are unusually inexpensive relative to rent — this dynamic mathematically favors buying for those planning to stay several years, assuming stable employment and neighborhood conditions.
Memphis, TN's price-to-rent ratio: 12×
Dividing the median home price by annual rent for an equivalent home gives the price-to-rent ratio — a quick screening tool used by economists and real estate analysts. A ratio below 15 generally favours buying, 15–20 is a genuine toss-up, and above 20 generally favours renting, all else being equal. Memphis, TN currently sits at approximately 12×, which leans toward buying for those planning to stay several years.
| Metric | Memphis, TN |
|---|---|
| Median home price | $280,000 |
| Estimated equivalent monthly rent | $1,950 |
| Property tax rate | 1.4% annually |
| State income tax | None |
| Price-to-rent ratio | 12× |
These are metro-level estimates for illustration. Use the calculator above with your specific neighborhood, property, and rental comparison for an accurate result.
Compare other major metros
📍 New York, NY
$780,000 median · 1.7% property tax
📍 Los Angeles, CA
$950,000 median · 0.7% property tax
📍 Chicago, IL
$350,000 median · 2.2% property tax
📍 Houston, TX
$320,000 median · 2.3% property tax · no income tax
📍 Austin, TX
$820,000 median · 2.1% property tax · no income tax
📍 Seattle, WA
$850,000 median · 1% property tax · no income tax
Related financial planners
Memphis, TN rent vs buy — frequently asked questions
Is it better to rent or buy in Memphis, TN?
It depends heavily on your time horizon and the specific numbers. Memphis, TN's current price-to-rent ratio of approximately 12× suggests buying tends to make more sense for those staying several years. Use the calculator above with your specific home price, down payment, and time horizon for a precise answer.
What is the median home price in Memphis, TN?
The median home price in Memphis, TN is approximately $280,000, though prices vary significantly by neighborhood and property type. This calculator uses the metro median as a starting point — adjust it to match the specific property you are considering.
What are property taxes like in Memphis, TN?
Memphis, TN has an effective property tax rate of approximately 1.4% of assessed home value annually. This is close to the US national average of roughly 1.1%.
Does Tennessee have a state income tax?
No. Tennessee is one of nine US states with no state income tax, which increases take-home pay for both renters and buyers compared to high-tax states.
How long do I need to stay in Memphis for buying to make sense?
Based on Memphis, TN's current price-to-rent ratio of 12×, the typical break-even point — accounting for closing costs, selling costs, and the opportunity cost of the down payment — generally falls in the 3-to-5-year range for this market. Run the calculator above with your specific numbers and time horizon for an exact figure.