DSCR Loans in Tennessee

Usually from a projection, such as an AirDNA-style market report or the property's own booking history, and many STR lenders apply a haircut to that figure. The Short Term Shop's AirDNA-based data put a Gatlinburg two-bedroom cabin near $47,500 a year in gross revenue and a three-bedroom near $67,500. The sample deal below counts only 80% of the two-bedroom figure. Your matched specialist confirms which method the chosen lender uses, and whether the cabin's zoning allows nightly rental.

Yes, by national standards. The effective rate runs about 0.52%, per the Tax Foundation's 2026 figures, and residential property is assessed at 25% of appraised value whether it is rented or owner-occupied. City and county rates vary, and reappraisals run on county schedules, so a recent reappraisal can move a bill. Tennessee also has no state income tax, including on rental income, which matters over a long hold even though a DSCR lender does not look at your income.

On ratios, it is one of the best in the country, because prices sit far below the state median while rents hold up. That comes with real caveats. Neighborhood quality varies street by street, older homes need a bigger repair budget, and property management quality makes or breaks the result. Many DSCR lenders also have minimum loan amounts that the cheapest Memphis houses fall under. Buy where comparable rents and sales are solid, and keep real reserves.

It is one of the steadier ones in Tennessee. Fort Campbell supports a large rental market in Clarksville, with a steady flow of soldiers and families on set tours, and prices sit below Nashville's. Deployment and rotation cycles can move vacancy, and turnover clusters in summer. Lenders qualify on market rent from the appraisal, not housing allowance tables. Across the state line, Oak Grove and Hopkinsville in Kentucky draw from the same tenant pool at lower prices.