Looking at the recent market, Jackson is a city where the purchase price is low, resulting in particularly high rental yield numbers. However, I have seen cases where people only looked at the numbers and were surprised when they later included property taxes and insurance costs in their calculations. I will explain why this happens step by step.

According to RentCafe, as of July 2026, the average rent in Jackson is $1,096 per month. The purchase price varies significantly across different sources; while the Zillow Home Value Index reports it as approximately $85,739, Redfin's recent median sales price over the last three months is about $145,000, which is quite high. This discrepancy indicates that the Jackson market is highly segmented by region. Here, I will use the more accurate figure of $145,000 for calculations.

Dividing the annual rental income of $13,152 by the purchase price gives a total yield of about 9.1 percent. If the terminology is unfamiliar, think of it this way: the total yield is a number that does not deduct any costs, so if you finalize a property at this stage, you may later realize that you forgot to account for property taxes and insurance.

The average effective property tax rate in Mississippi ranges from 0.58 percent to 0.72 percent across different sources, so I will use a figure close to the median of 0.65 percent. Simply put, this means that a $145,000 home incurs about $943 in annual property taxes. Adding insurance and maintenance costs and applying the 50 percent rule results in a net operating income of $6,576 per year, bringing the cap rate down to around 4.5 percent. If you only looked at the total yield of 9.1 percent, you would have missed this important detail.

The cash-on-cash return varies depending on how much debt you take on when purchasing. The lower the down payment percentage, the more sensitive the return is to the cash invested, so it is safer to calculate separately after the loan terms are established.

According to the 1 percent rule, the rent should be $1,450 per month, which is 1 percent of the purchase price, but the actual rent is lower than this. To get the full picture of total returns, you need to consider not only monthly cash flow but also changes in home value and the accumulation of assets from loan principal repayment.

Looking at the recent trends in Jackson's rental market, RentCafe reports a 2.2 percent increase over the past year, while Zumper indicates an increase of nearly 5 percent. Since many areas have low purchase prices, there is a steady demand for investment purchases, but it is also important to note that there are significant differences in rental demand and vacancy rates by region.

If you are moving from another state to Mississippi, it is important to check insurance rates in advance. Some areas are not completely out of the hurricane path, so while insurance rates may be lower than coastal cities, they can be higher than those in inland Midwest cities. Rather than assuming that low property tax rates mean overall operating costs are low, it is more accurate to get insurance quotes and recalculate the cap rate afterward.

Looking at the trend in purchase prices, Zillow indicates that Jackson's home values have risen gradually by 1.2 percent over the past year, while Redfin's recent median sales price has jumped by 11.9 percent compared to the same period last year. The gap between these two figures also shows that the Jackson market is highly segmented by region. Depending on which data you use as a basis, the overall revenue outlook can vary significantly, so it is best to verify recent transaction prices before finalizing a property. For example, if you assume a 20 percent down payment, the actual cash invested would be about $29,000, which is 20 percent of the $145,000 purchase price. Dividing the pre-tax cash flow of $6,576 by this cash investment will yield the cash-on-cash return, but remember that this calculation can also change depending on which data you use for the purchase price.

Since property tax rates and purchase price benchmarks vary across sources, please verify based on the actual property address. This article does not constitute investment or legal advice, and it is recommended to consult with a real estate professional and accountant before making any actual contracts.