Owning a rental property in the Memphis real estate market is something you don’t want to miss out on. Let’s get into exactly why that is, and then we’ll tell you where to invest for optimal performance.
6 Reasons to Invest in the Memphis Housing Market
Memphis is pretty well known as one of the more affordable areas for investment in the Tennessee real estate market. But that isn’t the only thing drawing attention and encouraging people to invest in Memphis real estate. Here are a couple of other key factors which can explain why investing in the Memphis real estate market is a smart move.
1) Home Values Are Up
Appreciation rates in the Memphis real estate market have stayed near the national average over the last decade. However, according to Zillow, Memphis real estate properties have increased in value by 5.1 percent this past year and the median home value is currently $85,900. This number is expected to go up another 2.3 percent within the next year, which is good news for real estate investors in Memphis.
2) There Is Rental Demand
Making Memphis real estate investments with a buy and hold strategy is a great way to generate long-term cash flow because there is demand for rental property in the market. The Memphis real estate market is composed of a mixture of homeowners and renters, with renters making up 53.67 percent of the population.
Related: Memphis Investment Properties – Why You Should Buy Now
3) Job Opportunities Are on the Rise
There has been an influx of companies moving their offices or opening new plants in Memphis. This draws in a lot of new jobs, and where there is employment opportunity, people follow. The biggest industry in Memphis is healthcare, but the city has a large population of young people still in the beginning stages of their professional careers. A strong and flourishing economy with job growth can do wonders for the state of its real estate investing market.
4) Laws Protect the Landlord
Tenant-landlord laws are an important factor which needs to be considered when choosing an investment location. You can confidently operate your Memphis investment properties as rental properties because the Tennessee state law favors the landlord. There are laws in place which make it less difficult if you’re put in a situation where you need to evict a tenant not paying rent or need to take legal action in response to any breaches of the contract/lease.
Related: Landlord Tenant Law: Basics Every Real Estate Investor Should Know
5) It’s a Hot Market
Buyer’s market or seller’s market? Well, after reading all of this, it’s what you’d expect- a red hot seller’s market. Memphis houses for sale are being closed on pretty quickly, as demand for property in the Memphis real estate market is outpacing the current supply. If you want to get in on the action, we suggest you start your search in the Memphis real estate market now.
Do you have a free Mashvisor account? Use our Property Finder to find lucrative investment properties that match your criteria in a matter of minutes!
6) Airbnb Memphis Is Only Lightly Regulated
If you’re a real estate investor interested in a short term rental strategy, you may be asking yourself, “Is Airbnb legal in Memphis?” While some cities in Tennessee have banned non-owner occupied short term rentals in residential areas, Memphis isn’t one of them. The city does, however, have a couple of laws which regulate certain aspects of short term rentals in the Memphis real estate market. Here’s what you should know:
- There is a 3.5 percent privilege tax and a $2 fee per occupied room night on short term rentals in the city
- All short term rental hosts and their guests must comply with the noise control restrictions as to not disrupt the other residents in the area
- Your short term rental property must have approved smoke alarms and carbon monoxide detectors meeting the applicable state law standards
- The guest or renter of your unit must be at least 18 years old
For more details on short term rental regulation in the Memphis real estate market, click here.
Related: Invest in Airbnb Memphis Real Estate in These 3 Neighborhoods
Memphis TN Real Estate Market Statistics
- Median Property Price: $226,772
- Price per Square Foot: $66
- Price to Rent Ratio: 20
- Days on Market: 59
- Monthly Traditional Rental Income: $944
- Traditional Cash on Cash Return: 1%
- Monthly Airbnb Rental Income: $2,128
- Airbnb Cash on Cash Return: 6%
- Airbnb Occupancy Rate: 63%
This data is provided by Mashvisor’s investment property calculator. These key real estate investment metrics really help investors in evaluating a housing market’s condition. This is important data that you should always have before making a decision to invest in any real estate market.
If you are interested in gaining access to data like this for any market in the US, start out your 7-day free trial with Mashvisor now.
Now, moving on to the second part of this blog, we will be telling you where you can find profitable Memphis investment properties for sale. According to our data, these are the best neighborhoods in Memphis for each rental strategy.
Related: Buying Memphis Investment Properties for Sale in 2019: Yes or No?
Where to Invest in Airbnb Rentals
Downtown
- Median Property Price: $329,054
- Price per Square Foot: $94
- Price to Rent Ratio: 27
- Days on Market: 57
- Monthly Airbnb Rental Income: $2,366
- Airbnb Cash on Cash Return: 8%
- Airbnb Occupancy Rate: 53%
Midtown
- Median Property Price: $259,069
- Price per Square Foot: $52
- Price to Rent Ratio: 27
- Days on Market: 69
- Monthly Airbnb Rental Income: $2,279
- Airbnb Cash on Cash Return: 7%
- Airbnb Occupancy Rate: 61%
River Oaks-Kirby-Balmoral
- Median Property Price: $478,709
- Price per Square Foot: $103
- Price to Rent Ratio: 30
- Days on Market: 63
- Monthly Airbnb Rental Income: $2,712
- Airbnb Cash on Cash Return: 4%
- Airbnb Occupancy Rate: 82%
What are you waiting for? Start investing in the Memphis real estate market right now!
Where to Invest in Traditional Rentals
Parkway Village-Oakhaven
- Median Property Price: $71,995
- Price per Square Foot: $40
- Price to Rent Ratio: 8
- Days on Market: 80
- Monthly Traditional Rental Income: $727
- Traditional Cash on Cash Return: 3%
Cordova
- Median Property Price: $199,522
- Price per Square Foot: $68
- Price to Rent Ratio: 12
- Days on Market: 42
- Monthly Traditional Rental Income: $1,374
- Traditional Cash on Cash Return: 3%
Windyke-Southwind
- Median Property Price: $223,721
- Price per Square Foot: $85
- Price to Rent Ratio: 14
- Days on Market: 72
- Monthly Traditional Rental Income: $1,330
- Traditional Cash on Cash Return: 3%
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