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Franklin, TN DSCR LoansAppreciation Market

DSCR Loans in Franklin, TN

Finance investment properties in Franklin with a DSCR loan. Qualify based on rental income, not tax returns. Median rent at $2,200/mo with +3.0% annual growth.

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$2,200/mo
Median Rent
$650K
Median Home Price
+3.0%
Rent Growth (YoY)
85K
Metro Population

Market data updated 2026-01-30

Franklin Market Snapshot

Why Invest in Franklin?

  • One of the wealthiest suburbs in Tennessee with premium rental rates
  • Top-rated schools and historic downtown attract affluent family renters
  • Corporate relocations to Cool Springs business district fuel demand

Key Economic Drivers

HealthcareManufacturingLogistics
Median Rent
$2,200/mo
Rent Growth
+3.0%

Property Types We Finance

Single FamilyTownhomesBuild-to-Rent

Popular Investment Areas

Cool SpringsWesthavenDowntown FranklinThompson Station

Metro Population

85K

Franklin metro area — a strong tenant pool for rental property investors.

DSCR Analysis

Example DSCR Calculation for Franklin, TN

Here's how a typical DSCR loan works using Franklin's actual market data.

Loan Structure

Purchase Price$650,000
Down Payment (20%)$130,000
Loan Amount$520,000
Interest Rate7.5%

Monthly Costs (PITIA)

Principal & Interest$3,636
Property Tax (0.71% rate)$385
Insurance$183
Total PITIA$4,204

DSCR Result

Monthly Rent
$2,200
÷
Monthly PITIA
$4,204
=
DSCR Ratio
0.52

Based on Franklin's median home price of $650,000 and median rent of $2,200/month, a typical DSCR investment produces a challenging DSCR ratio. Investors may need a larger down payment (25-30%) to improve the ratio, or should target properties priced below the median. With a 20% down payment of $130,000, the monthly PITIA (principal, interest, taxes, insurance) comes to $4,204. The local property tax rate of 0.71% and annual insurance cost of $2,200 are factored into this calculation.

Estimated Cap Rate
2.4%
Franklin's estimated cap rate is 2.38%, indicating a premium market where investors rely primarily on appreciation.
Market Comparison

Franklin vs. Tennessee Average

How Franklin's rental market compares to the Tennessee statewide average.

Median Rent
$2,200/mo
↑ 33.3% above state avg
Median Home Price
$650K
↑ 109.7% above state avg

Franklin's median rent of $2,200/month is 33.3% above the Tennessee state average of $1,650/month. Home prices at $650,000 are 109.7% above the state average of $310,000.

Investment Strategy

Franklin Investment Strategy: Appreciation

Franklin represents a smaller-market appreciation strategy where local fundamentals like healthcare and manufacturing drive steady value gains. With $2,200/mo rents and $650K prices yielding a 4.06% ratio, investors benefit from both cash flow and modest appreciation. Target Cool Springs for premium tenants or Westhaven for better cap rates.

DSCR Ratio
0.52
Cap Rate
2.4%
Vacancy Rate
6.4%
Tax Rate
0.71%
FAQ

DSCR Loan Questions for Franklin

What's the typical DSCR requirement for Franklin investment properties?
The DSCR is calculated by dividing monthly rental income by PITIA (Principal, Interest, Taxes, Insurance, Association fees). In Franklin, with a 0.71% tax rate adding roughly $385/month to expenses, investors should target properties where rents exceed total monthly costs by at least 10-25%.
Is 20% down enough for a DSCR loan on a Franklin property?
Total cash needed for a Franklin investment property includes down payment (typically 20-25%), closing costs (2-4%), and reserves (6 months PITIA). For a median-priced property at $650K, plan for approximately $182,000 total cash to close and maintain required reserves.
What are the best neighborhoods for investment in Franklin?
Investor-friendly areas in Franklin include Cool Springs, Westhaven, Downtown Franklin, Thompson Station. The permissive STR regulations make short-term rentals viable in most areas.
Are Airbnb properties eligible for DSCR loans in Franklin?
Yes, DSCR loans can finance Franklin Airbnb properties. Key requirements: valid STR permit/license, 20-25% down, proof of rental projections, and typically 9-12 months reserves. Consider whether STR or long-term rental better suits your investment goals.
What should I budget for property taxes in Franklin, TN?
Property tax rates in Franklin, Tennessee average approximately 0.71% of assessed value. For a property at the median price of $650K, this translates to roughly $385/month in property taxes, which is factored into DSCR calculations.
What's driving rental demand in Franklin?
Franklin's vacancy rate of 6.4% is in line with national averages. This balanced market allows for steady tenant turnover without extended vacancies.
What appreciation rate can I expect in Franklin?
Franklin's historical appreciation has outpaced state and national averages, driven by Healthcare and Manufacturing employment growth. While past performance doesn't guarantee future returns, Franklin's one of the wealthiest suburbs in tennessee with premium rental rates suggests continued upward pressure on values. DSCR investors should focus on total return (appreciation + income) rather than cash flow alone.

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