According to the MAAR (Memphis Area Association of Realtors), the Memphis property market grew in 2020, with 1,796 sales compared to 1,622 sales during 2019.
Many of these sales involved out-of-town real estate investors wanting to reap the many benefits of owning property in this exciting city.
Check out why people are lining up to get in on Memphis investment properties, here.
1. An Excellent Real Estate Market
In a report containing over three hundred cities across the nation, Memphis came out as one of the best places to invest in real estate right now.
New home builds are rare in Memphis due to a shortage of qualified individuals and rising costs. That means there’s a limited supply of homes available for potential buyers.
The following aspects fuel this high demand:
- Median home-price appreciation
- Robust activity in the market
- A strong local economy
According to memphisinvestmentproperties.net, Memphis real estate appreciated by 12.5% in 2020.
The median price of homes in Memphis is around $123,492, compared to the US average of U.S. home price of $287,148. You can still pick up houses for under $70,000 in an affordable area.
2. Rapid Population Growth
Currently, 1.4 million people live in the Memphis metropolis and this number is increasing by 0.26% every year. More than 30,000 new residents should arrive in the city by 2027.
Most of these newcomers are youthful millennials in search of the Memphis way of life. The average age in Memphis is about 36 years old, making it one of the ‘youngest’ cities in the country.
You can expect many of these new inhabitants to search for rental properties on arrival.
3. Strong Job Market
The GDP of Memphis is around $79 billion at the moment, and despite the inevitable downturn during 2020, the city’s back on track as one of the country’s fastest-growing economies.
Annual employment grows every year, as more people arrive to open businesses in this vibrant, thriving city. These figures bode well for both commercial property investors, as well as those looking to buy rental properties.
The top job sectors in Memphis are:
- Trade and transportation
- Information technology
Three Fortune 500 companies call Memphis home, namely AutoZone Inc, FedEx Corp., and International Paper Co. In addition, there are thousands of smaller companies all over the business-friendly Memphis metro.
Thanks to the Mississippi River, two interstate highways, the Memphis International Airport, and five major freight railroads, Memphis is a hub for moving goods across the US.
No mention of Memphis is complete without a nod to the thriving music, entertainment, and tourism industries, either.
4. Fantastic Rental Market
The abundance of jobs, young residents, and a growing population means there’s no shortage of people looking for local homes to rent in Memphis.
A shortage of available homes means you can command high prices for rental properties, both long and short-term. The average rent is $933 per month, up 11% from last year.
Memphis welcomes out-of-town investors willing to buy or build homes for residential rentals. This is especially true if they’re willing to buy and refurbish run-down homes for the rental market.
5. Housing Affordability
Despite price increases, high demand, and low inventory, house prices in Memphis aren’t as high as in other parts of the country, especially in less popular neighborhoods.
Some of the best places to pick up reasonably-priced properties are:
- Berclair-Highland Heights
- Hickory Ridge-South Riverdale
- Parkway Village-Oakhaven
- White Haven-Coro Lake
While some of these areas might command lower rentals, there’s high demand for places to stay across the city, so you’ll still have no shortage of tenants.
6. Profitable Memphis Investment Properties
According to real estate experts, the Memphis metropolitan area boasts an affordability rating of 1 out of 10. That means it’s one of the most affordable places to own a home in the US.
This, coupled with the modest increase in home prices when compared to everywhere else, makes it a great option for investors wanting to buy a property and keep it for a few years to use as a rental home.
Even if you bought a home and waited only a year, you’d still see a modest return on your investment in Memphis. Yet, you can gain even more from the profitable rental market, involving residential and commercial tenants, as well as tourists.
7. Outstanding Quality of Life
It’s 5% cheaper to live in Memphis, than anywhere else in the nation. That’s thanks to a bustling job market, coupled with affordable housing, transport, and food.
The city is a hotspot for musicians and tourists from all over the world, thanks to its lively music culture, festivals, and the bustling Beale Street Entertainment District.
The city boasts favorable weather conditions year-round, with pleasant temperatures in summer and mild winter days. Health care is top-notch and the city’s also home to the St. Jude Children’s Research Hospital and the University of Tennessee Health Science Center.
Memphis schools feature regularly on national honors lists and are highly acclaimed across the country.
8. Tourism Opportunities
Memphis, TN, is synonymous with good vibes, great music, delicious food, and famous faces. It’s a top destination for vacationers, attracting over 12 million visitors a year.
You can run one or more Airbnb properties in the city without living there, unlike other areas of Tennessee, where you must reside on the property. Short-term rental regulations include needing a permit, paying taxes, and complying with noise ordinances.
Some of the best places to invest in a property for vacation rentals include:
- Berclair-Highland Heights
- Midtown River Oaks-Kirby-Balmoral
- White Haven-Coro Lake
You’ll notice that some of these are also the cheapest places to buy property in the city.
Memphis, Tennessee Is the Place to Be
With mortgage rates at their lowest ebb ever, affordable prices, and tourism getting back on track, there aren’t any negatives attached to buying Memphis investment properties right now.
So, if you’re in the market for your next money-spinner, it pays to start your search in this part of the country.
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