A savvy real estate investor knows that the first factor to consider before buying a rental property is LOCATION. In real estate investing, choosing the right city and the right neighborhood is an important decision to make that will affect your profits and return on investment. This is why successful property investors are always looking for the next top real estate market. Memphis real estate investors will be happy to hear that the city is currently a great location for investing in a rental property. Keep reading as we break down why you should invest in Memphis investment properties in 2018 and in which neighborhoods you’ll find the best Memphis investment properties that will bring you a good return on investment.
Reasons to Buy Memphis Investment Properties
Affordability
The housing market prices are a key factor for any real estate investor and homebuyer. The first reason to invest in the Memphis real estate market is the fact that Memphis investment properties are actually really cheap and easy to buy right now.
Various types of Memphis investment properties (single-family homes, condos, townhouses, etc.) are all available at affordable prices below the national averages. The median home price for Memphis investment properties is currently $191,360 (less than half of the national average!) and the median rent price for a traditional rental property is $835.
Part of the reason for the relatively affordable home prices in the Memphis real estate market is the large percentage of foreclosures and discounted Memphis investment properties. Moreover, the household income in the city is also below the national average. This is beneficial if you’re a real estate investor from a different market (and enjoy a higher income) and you’re considering out-of-state real estate investing in Memphis.
Related: Owning Rental Property: Should I Invest in My Local Market or Out-of-State?
Job Growth
There are plenty of reports expecting a high job growth in the future of Memphis. FedEx headquarter is in Memphis and other companies and organizations are also moving to the city. This will bring a large number of jobs to Memphis which is a positive outlook for the Memphis real estate market. This is another reason for a real estate investor to buy Memphis investment properties.
New job opportunities will lead to economic growth and low unemployment rates. This is a good sign for owners of Memphis investment properties as it means more and more people who are able to pay rent are moving into the Memphis real estate market.
Population
The greater Memphis metro area has an estimated population of 1.33 million, making Memphis the second largest metro area in Tennessee after Nashville. Considering the affordable home prices and growing job market in Memphis, it shouldn’t come as a surprise that the city’s population is also growing. Yet another reason to consider Memphis investment properties.
With a growing population, Memphis real estate investors have a large pool of rental population and, thus, are guaranteed to find tenants for their rental properties. Furthermore, as more and more people move to the city, demand for real estate investing will increase, providing new investment opportunities for beginner and experienced property investors in the Memphis real estate market!
Keep in mind that the city’s population is generally young millennials who can’t afford to buy a home on their own and opt for renting. Savvy property investors take advantage of this fact and invest in Memphis investment properties like single-family and multi-family homes to accommodate millennials for the long-term.
Related: Single Family vs. Multi Family Rentals: Which Is the Right Real Estate Investment for You?
A Quick Summary of Memphis Real Estate Market
Real estate investing is all about numbers, so let’s take a look at the Mashvisor analytics of the Memphis real estate market, provided to you by Mashvisor’s rental property calculator:
Top 5 Neighborhoods to Buy Memphis Investment Properties
Memphis Investment Properties in White Haven-Coro Lake
- Median Property Price: $72,250
- Traditional Rental Income: $713
- Traditional Cash on Cash Return: 3.84%
- Traditional Cap Rate: 3.84%
Memphis Investment Properties in Raleigh
- Median Property Price: $79,000
- Traditional Rental Income: $688
- Traditional Cash on Cash Return: 3.18%
- Traditional Cap Rate: 3.18%
Memphis Investment Properties in Eads-Fisherville
- Median Property Price: $164,500
- Traditional Rental Income: $1,022
- Traditional Cash on Cash Return: 2.3%
- Traditional Cap Rate: 2.3%
Memphis Investment Properties in Shelby Forest-Frayser
- Median Property Price: $60,000
- Traditional Rental Income: $565
- Traditional Cash on Cash Return: 2.28%
- Traditional Cap Rate: 2.28%
Memphis Investment Properties in Cordova
- Median Property Price: $173,000
- Traditional Rental Income: $1,029
- Traditional Cash on Cash Return: 2.19%
- Traditional Cap Rate: 2.19%
To analyze and find the best Memphis investment properties in any neighborhood of your choice, click here!
How to Find Memphis Investment Properties
At Mashvisor, we understand the difficulties property investors face while searching for the right rental property in the right location, and we offer the solution! Mashvisor helps property investors find the best rental properties in any city or neighborhood in just 15 minutes based on real estate analytics. To find the best Memphis investment properties, make use of our:
- Investment Property Calculator: A versatile tool that allows you to calculate the different values related to a rental property, including the cash on cash return, cap rate, cash flow, and occupancy rate (for both traditional and short-term Airbnb investment). This will help you evaluate the profitability of buying a rental property in Memphis.
- Investment Property Finder: A powerful and heavily customizable search tool that allows you to search for rental properties based on specific criteria using different filters, such as finding rental properties of a certain price range, in a certain neighborhood, or with a certain cap rate. This will help you easily compare different Memphis investment properties in the same neighborhood to determine which one will yield a better return on investment.
- Heat Map Function: The heat map function for the property finder tool allows you to find rental properties much faster using visual cues. For example, you can set the heat map to indicate the areas in the Memphis real estate market with the highest rental income, and the heat map will highlight areas as either hot or cold for this feature. This will make it easier to compare different neighborhoods and see which one has more profitability for real estate investing.
Related: Be a Smart Real Estate Investor: Finding Investment Properties Using a Heat Map
To learn more about how we help property investors make faster and smarter real estate investment decisions, click here.
The Bottom Line
You should invest in Memphis investment properties because they are affordable and the real estate market is experiencing a growth in the job market and the population – both of which have a positive impact on real estate investing. The above-mentioned cities are where a real estate investor will find the best and most profitable Memphis investment properties in 2018. Remember to sign up with Mashvisor to start your search for a rental property in any of these neighborhoods and find the best one in just 15 minutes!
To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.