Investing in Memphis real estate is something to really consider. Recently the city has developed into a suburban area filled with tons of single-family homes that appraise for below the national market average. Buying up a few rental properties would do you well as roughly over 40% of Memphis residents are renters.
Speaking of the Memphis real estate market, it is one that has shown low volatility over the last 20 years, so there is no reason to worry about a market bubble, or bubble burst! Additionally, there have been plenty of reports stating that the job market is increasing so there will be an influx of people moving to the area over the next five years. For example, FedEx is headquartered in Memphis as well as companies like Electrolux and Mitsubishi who have plans to open manufacturing plants in the city soon.
When looking for investment rental properties, it is important to consider the rent to price ratio. In Memphis, it is around 1% compared to many other places in the country experiencing inflation causing the ratio to be much lower. Many people are also flocking south in search of more pleasing climates. The weather in Memphis hardly ever gets harsh, thus making the perfect environment for new residents to move to the area!
At the moment, it is tough to decipher if the current market is a buyer’s or seller’s market. However inventories have started to decline meaning soon it will undoubtedly become a seller’s market, and if demand continues to increase causing inventory to become even less, prices will then start to go up.
Other important numbers to consider:
- Median Property Price: $182,000
- Traditional Monthly Rental Income: $936
- Airbnb Monthly Rental Income: $2,130
- Traditional Cash on Cash Return: 2.3%
- Airbnb Cash on Cash Return: 9.9%
- Traditional Cap Rate: 6.9%
- Airbnb Cap Rate: 15.0%
As you can see, now is the time to get in to the Memphis real estate investment market. Whether you’re looking to build or renovate, contact our design team to determine your best option.