By Austin Cleghorn, investor-friendly Realtor in Toledo, Ohio. Reviewed October 2026 against Redfin (August 2026), HUD's FY2027 Fair Market Rents, Federal Reserve Bank of St. Louis (FRED) data, county tax rates, and each state's landlord-tenant statutes. Not tax or legal advice.

Ohio, Indiana, and Tennessee are where most turnkey rental money in the U.S. ends up. Memphis built the turnkey industry, Indianapolis became the "safer" alternative, and Ohio cities like Toledo offer some of the lowest entry prices in the country. Provider websites make all three look the same: renovated house, tenant in place, property manager on day one, a projected return in the 8 to 12% range. They aren't the same. Prices, rents, property taxes, state income taxes, eviction timelines, and job and population trends differ in ways that change your returns for the next ten years. This guide compares turnkey rentals in Ohio vs Indiana vs Tennessee using one representative city in each state (Toledo, Indianapolis, and Memphis), with 2026 data and no sales pitch hidden in the numbers.

Ohio vs Indiana vs Tennessee: Side-by-Side Data

We compared the three cities that dominate turnkey marketing in each state. Every number below comes from a public source you can check yourself, and all of them use the same time period, so the comparison is fair.

Sources: Redfin city housing-market pages (August 2026); HUD FY2027 Fair Market Rent schedule (Toledo MSA, Indianapolis-Carmel HMFA, Memphis HMFA); FRED series TOLE739UR, INDI918UR, MPHUR (U.S. rate 4.2% in September 2026), and TOLPOP, INDPOP, MPHPOP. Tax and eviction rows are explained in the sections below. Medians include all home types, so treat ratios as a market screen, not a deal analysis.

Three things stand out. Toledo is the cheapest place to buy and has the best rent relative to price. Indianapolis is the healthiest economy, with low unemployment, real population growth, and homes that sell in about three weeks. Memphis sits in between on price and rent, has the lightest tax load, but is the only one of the three where prices went down over the last year.

A note on the rent figures: HUD's Fair Market Rent is the 40th-percentile rent, including utilities, for a standard unit in each metro. It is the ceiling most voucher programs use and the same yardstick in all three cities, which makes it useful for comparison. Your actual rent depends on the block, the condition of the house, and who pays utilities. For Toledo neighborhood-level rents, see our Toledo rental market report.

The Cash Flow Math on a Median-Priced Rental

Headline returns on turnkey listings usually leave out property tax or assume perfect occupancy. Here is a simpler, fairer test. Take a three-bedroom rental bought at each city's median price, collect HUD's three-bedroom Fair Market Rent, and subtract only the property tax. Insurance, management, vacancy, and repairs come next, but property tax is the one cost that differs most by state and that sellers most often understate.

Toledo tax uses the Lucas County Auditor's 2025 effective rate for the Toledo City School District (about $2,014 per $100,000 of value). Indianapolis tax uses Indiana's 2% cap on rental property as a worst case; deductions can lower it. Memphis tax uses 2025 rates of $2.58081 (City of Memphis) plus $2.69 (Shelby County) per $100 of assessed value, with residential property assessed at 25% of appraised value. Estimates only.

Toledo and Memphis finish in a dead heat at about 9.7% of the price before other expenses, and Indianapolis trails at about 7.2%. Toledo gets there with the lowest price and a higher tax bill. Memphis gets there with higher rent and a lower tax bill. Indianapolis needs the most cash and returns the least per dollar, which is the price you pay for a stronger economy.

After you subtract insurance, property management (usually 8 to 10% of rent plus leasing fees), vacancy, repairs, and capital reserves, a typical rental keeps something like 45 to 55% of gross rent as net operating income. On a median-priced house, none of the three markets produces big cash flow with a 25% down mortgage at current rates. The deals that work are bought below the median, which is why the purchase price a turnkey provider charges matters so much. Our Toledo ROI page walks through a full expense stack line by line.

Property Taxes and State Income Taxes

Property tax

• Ohio (Toledo): Property is assessed at 35% of market value and multiplied by the local millage. In the Toledo City School District that works out to about 2.0% of market value a year for a rental. Ohio's House Bill 186 is phasing out the 10% non-business credit on residential property by tax year 2029, which adds roughly 8% to a typical rental's bill. The details are in our Lucas County property tax guide.
• Indiana (Indianapolis): Indiana's constitutional "circuit breaker" caps property tax at 1% of assessed value for a homestead, 2% for other residential property, including rentals, and 3% for commercial property. Senate Enrolled Act 1 (2025) adds a new deduction for non-homestead residential property that starts at 6% of assessed value and rises to 33.4% by 2030. Budget at the 2% cap until you see the actual bill.
• Tennessee (Memphis): Residential property is assessed at 25% of appraised value. Inside Memphis city limits you pay both the city rate and the Shelby County rate. At 2025 rates that comes to about 1.3% of appraised value a year, the lowest of the three. Tennessee reappraises on a cycle, and rates are reset after each reappraisal, so check the current trustee bill for any specific property.

State income tax on rental profit

You pay state income tax to the state where the property sits, no matter where you live. Your home state usually gives you a credit for it.

• Ohio: a flat 2.75% for 2026. Toledo also has a 2.5% municipal income tax on net rental profit for property inside the city.
• Indiana: a flat 2.95% for 2026, plus a county income tax that varies by county (Marion County, which is Indianapolis, is 2.02% for residents). Ask your CPA how the county tax applies to you as a nonresident owner.
• Tennessee: no individual income tax. If you own through an LLC, though, Tennessee charges a franchise tax (0.25% of net worth or property, $100 minimum) and an excise tax (6.5% of net earnings). Family-owned entities that mostly earn passive income, including rent from residential property with four or fewer units, can qualify for the FONCE exemption. Confirm with a Tennessee CPA before you set up the LLC.

Rental profit is often small or negative on paper once depreciation is counted, so the state income tax difference matters less than it looks. It matters more when you sell, which is when a 1031 exchange can defer both the federal and the state tax.

Landlord Laws: How Fast You Can Recover From a Bad Tenant

With a turnkey rental, the property manager handles evictions, but the state law decides how long you go without rent. Here are the notice periods before a landlord can file in court for unpaid rent:

Notice periods only. Court scheduling, hearings, and move-out add time in every state. This is general information, not legal advice.

All three states are generally considered landlord-friendly. The difference is in days, not months, but on a property where one missed month wipes out a quarter's cash flow, a week matters. The court process after the notice is covered in our guide to the Ohio eviction process.

Ohio (Toledo): Strengths and Risks

Where Toledo wins: the lowest entry price of the three, the highest rent-to-price ratio, a 3-day notice, and prices that rose 7.1% last year after a long flat stretch. One $260,000 purchase in Indianapolis is roughly the price of two median Toledo homes, which spreads your vacancy and tenant risk across more doors. Toledo's employment base (healthcare, auto and parts manufacturing, glass, logistics, and the University of Toledo) is steadier than the metro's size suggests, and metro unemployment was 4.0% in August 2026, below the national rate. More detail in Is Toledo a good place to invest?

Where Toledo is weaker: the metro population is flat to slightly down, so appreciation is not the main reason to buy. Property tax is the highest of the three as a share of value. Most of Toledo's rental stock was built before 1978, and the city's lead-safe ordinance requires a lead-safe certificate for most pre-1978 rentals, a real cost that out-of-state turnkey providers sometimes skip over. Ask any seller for the certificate before you buy.

Best for: cash flow investors with a smaller budget, investors who want several doors instead of one, and buyers exchanging out of expensive markets.

Indiana (Indianapolis): Strengths and Risks

Where Indianapolis wins: the strongest economy of the three. Unemployment was 3.1% in August 2026, more than a point below the U.S. rate, and the metro added about 113,000 residents between 2020 and 2025. Homes sell in a median 24 days. The 2% property tax cap gives you predictable taxes, and SEA 1's new deduction should lower bills on rentals over the next few years. If you want a rental that is easy to resell and likely to appreciate, Indianapolis is the safest pick here.

Where Indianapolis is weaker: you pay for that strength up front. The median price is 73% higher than Toledo's, while three-bedroom Fair Market Rent is only 36% higher. That squeezes cash flow, and turnkey providers often make up the difference by selling in the cheapest neighborhoods, where rent collection and turnover are harder. Check exactly where on the map a property sits, not just "Indianapolis."

Best for: investors who care more about long-term appreciation and stability than monthly cash flow, and who have a larger down payment.

Tennessee (Memphis): Strengths and Risks

Where Memphis wins: Memphis has the longest-running turnkey industry in the country, so you will find more providers, more inventory, and property managers set up for remote owners. Property tax is the lowest of the three at about 1.3% of value, and Tennessee has no individual income tax. On our median-price test, Memphis matches Toledo on rent left after taxes.

Where Memphis is weaker: it is the only one of the three markets where prices fell last year (−2.2%). Unemployment, at 4.3%, was the highest of the three in August 2026, and the metro population is flat. The 14-day notice is the longest of the three. Memphis's big turnkey industry also means more competition among providers, and some of them sell homes that were rehabbed for appearance, not durability. Neighborhood quality varies block by block, so get your own insurance quote and walk the street on video before you commit.

Best for: investors who want the most turnkey inventory to choose from, the lightest tax load, and who are comfortable with flat prices in exchange for cash flow.

Which State Fits Which Investor

Plenty of investors don't pick one state. A common approach is to buy cash flow in Toledo or Memphis and a smaller number of appreciation-leaning rentals in Indianapolis. Whatever the mix, keep your underwriting identical across markets so you compare the deals, not the marketing.

Turnkey or BRRRR in These Three Markets?

Turnkey means paying a retail price for a finished, rented property. The BRRRR strategy (buy, rehab, rent, refinance, repeat) means buying a distressed house below its after-repair value, fixing it, and refinancing to pull your cash back out. The two are often sold as opposites, but many investors start with turnkey and move to BRRRR once they trust a local team.

• BRRRR works best where distressed homes are cheap and contractors are available. Toledo's low purchase prices make it easier to buy far enough below after-repair value to refinance most of your cash out. Memphis is similar. In Indianapolis, the faster market and higher prices leave less room between purchase price and after-repair value.
• BRRRR needs a local team you trust, because you're managing a rehab from another state. That is exactly what turnkey providers sell, which is why the provider's markup is effectively the price of skipping the rehab risk.
• Financing differs. BRRRR usually needs hard money or a cash purchase, then a DSCR or conventional refinance. See our guide to financing a rental property out of state.

How to Vet a Turnkey Provider in Any State

The state sets the rules. The provider decides whether you make money. These checks work in Toledo, Indianapolis, Memphis, or anywhere else:

1. Look up the provider's purchase price. County records show what the provider paid for the house and when. A $60,000 purchase resold for $150,000 after a $25,000 rehab tells you how much of your price is markup.
2. Order your own inspection. Hire an inspector the provider didn't choose, and have the sewer line scoped. Roofs, furnaces, and sewer lines are where cosmetic rehabs cut corners.
3. Verify the rent. Compare the projected rent to HUD's Fair Market Rent and to listings for similar homes on the same street. If the house comes with a tenant, ask for the lease and the payment history.
4. Interview the property manager separately. Ask for their average vacancy, their eviction rate, and whether they are owned by or paid by the seller.
5. Rebuild the pro forma yourself. Use the actual tax bill, a real insurance quote, 8 to 10% management, 5 to 8% vacancy, and real repair and capital reserves.
6. Protect the money. Close through an independent title company, and verify wiring instructions by phone before you send funds.

For Toledo specifically, our step-by-step guide on how to vet a Toledo turnkey provider shows which Lucas County records to pull. If you're weighing a provider against buying with an agent, read turnkey provider vs. buyer's agent first. The difference is often thousands of dollars on the same house.

FAQ

Austin is a Toledo Realtor, so we're not neutral about Ohio, and we've tried to show where Indianapolis and Memphis come out ahead. If you're comparing markets, Austin will underwrite a Toledo property with the same assumptions you use for any out-of-state offer, so you can see the difference in real numbers. Start with our overview of turnkey rental property in Toledo, or reach out directly.

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