With its blend of economic growth, low cost of living, and increasing population, Tennessee continues to attract real estate investors and property managers seeking profitable rental opportunities. As we look ahead to 2025, certain cities in the Volunteer State stand out for their strong rental yields, job growth, and tenant demand. Whether you’re looking to buy and hold, manage single-family homes, or invest in multifamily properties, these five Tennessee cities represent the best rental markets for the upcoming year.
1. Nashville
Consistently ranked as one of the hottest housing markets in the nation, Nashville tops the list for good reason. Music City boasts a thriving job market, driven by sectors like healthcare, entertainment, and tech. This expanding economy translates into steady population growth and housing demand.
- Median Rent (2024): $1,750
- Occupancy Rate: Over 95%
- Key Areas: East Nashville, The Nations, Antioch
With a strong mix of young professionals and students from institutions like Vanderbilt University, Nashville presents a healthy mix of long-term and short-term rental opportunities.
2. Chattanooga
Often described as a hidden gem, Chattanooga has transformed into a modern, tech-friendly city attracting remote workers and startups alike. With gigabit internet and outdoor amenities, it’s become a magnet for renters looking for affordability and lifestyle balance.
- Median Rent (2024): $1,350
- Population Growth Rate: 1.2% annually
- Top Neighborhoods: Northshore, St. Elmo, Southside
Low property taxes and a strong short-term rental scene make Chattanooga especially lucrative for investors using platforms like Airbnb or short-term corporate leases.
3. Knoxville
Knoxville is gaining serious traction among property managers thanks to its University of Tennessee student population and growing healthcare sector. The city is experiencing gradual appreciation in property values while maintaining affordable entry prices for investors.
- Median Rent (2024): $1,275
- Rental Vacancy Rate: 4.1%
- Hot Neighborhoods: Bearden, Fountain City, Downtown Knoxville
The combination of university housing demand and family-friendly suburbs makes Knoxville a balanced blend of short-term and long-term rental potential.
4. Murfreesboro
Located just 40 minutes southeast of Nashville, Murfreesboro is rapidly establishing itself as a standalone rental market with growing suburban appeal. It’s among the fastest-growing cities in the state and offers newer housing stock compared to older metro areas.
- Median Rent (2024): $1,600
- Projected Home Value Growth: 7% in 2025
- Appealing Developments: Blackman, West Murfreesboro, Downtown Corridor
The city’s growing MTSU student base and influx of young families make it especially attractive for buy-and-hold strategies or student housing rentals.
5. Clarksville
Last but certainly not least, Clarksville is a military city seeing substantial rental growth thanks to its proximity to Fort Campbell and multiple manufacturing facilities. The market is attractive to investors looking for houses at lower price points and high rental returns.
- Median Rent (2024): $1,300
- Cap Rate Averages: 6-8%
- Best Areas to Invest: Sango, St. Bethlehem, New Providence
Clarksville’s demographic is largely stable renters—military families and entry-level workers—which supports steady occupancy and cash flow for property managers and landlords.
Final Thoughts
As we move into 2025, investors and property managers in Tennessee have plenty of promising markets to choose from. Each of the five cities listed—Nashville, Chattanooga, Knoxville, Murfreesboro, and Clarksville—offers unique advantages depending on your investment strategy. From urban hubs to suburban growth zones, the Volunteer State continues to show its strength as a real estate investment destination.
Whether you’re just starting your investment journey or looking to expand your portfolio, these Tennessee rental markets deserve your attention in the year ahead.
