Did you know that Memphis is rated the number one real estate market where more first-time buyers fight seasoned investors for the best rental properties?

The average price per square foot of rental properties in Memphis is significantly lower than the national average. This makes it more affordable for out-of-state investors to purchase properties here.

Because the price is a crucial factor when considering rental property investment, making Memphis an attractive option for rental property investors. However, this isn’t the only reason many investors are headed to Memphis.

Read below to understand the incredible benefits of buying rental properties in Memphis today:

Rental Properties in Memphis Are Affordable

Rental properties in Memphis are some of the most affordable in the country, and property values are predicted to rise. According to a report, a typical home in Memphis costs $118,300. This amount is significantly lower than the national average price of $167,700.

Thanks to the affordability of rental properties, it’s easy to purchase a rental unit and find reputable tenants to occupy the property. This makes Memphis a great place to invest in a rental property and generate income while building equity over time.

A Lower Cost of Living

In Memphis, the cost of living is 17% lower than the national average. This is good news for those looking to invest in rental property, as it means your tenants will have more money to put towards rent.

Reduced cost of living also means that property values are more affordable, making it a great time to invest in rental property in Memphis! Additionally, Memphis has a home affordability index of 76 out of 100.

The affordability index is the percentage of households that can afford a median-priced home. The index uses a base value of 100, representing the historical average. An affordability index above 100 means that the item is more expensive, while those that rank below 100 mean they are more affordable.

So, a score of 76 means that 76% of Memphis households can afford to buy a home. This is good news for property investors, as it indicates a high demand for housing in the city. And with a strong demand comes the potential for higher rental prices.

Greater Profitability

Rental property investment in Memphis can be highly profitable. In fact, many landlords in the area make a full-time income from their rental properties. Real estate investors can purchase these properties at an affordable price than rent them out for a higher rate.

The average rental price in Memphis is $887 per month, and research shows that rent prices are increasing by at least 7% annually. Additionally, another thing to note is that over 43% of the homes in Memphis are rented.

Increased Population

Today, more and more people are moving to Memphis. This has resulted in the decline of real estate inventory in the area due to the increased population. This is excellent news for real estate investors in the area.

Increased population means increased demand for rental units, hence the more profit you will make on your investment. And thanks to the diverse economy, a steady job market, and good quality of life, experts project that more people will continue to relocate to the area.

Great Opportunity for Airbnb

Because Memphis is a southern city, most people across the country like to travel there. This creates excellent opportunities for short-term rental services such as Airbnb and VRBO. If you purchase a property in the right location, you could see a great return on your investment from renting out your property on these platforms.

Thanks to its rich history and other popular tourist attractions, there will always be tourists in the area looking for a place to stay. According to a report by Memphis Travel, over 12.4 million tourists visit Memphis every year, which is expected to increase annually.

With around 500 Airbnb properties in Memphis, there is still an opportunity for growth in the market. The best areas to invest in a property include:

  • Midtown 
  • White Haven-Coro Lake
  • Berclair-Highland Heights 
  • River Oaks-Kirby-Balmoral 

Airbnb properties are becoming more popular than hotels in today’s world. That’s because they offer tourists a home-away-from-home feeling.

Rental Property Investment Offers Numerous Tax Advantages

When you invest in rental property, you can take advantage of some great tax benefits. The IRS allows you to deduct various expenses related to your property, including mortgage interest, property taxes, and insurance.

The rent you receive will be taxed less than your day-job income. You can also consider taking advantage of depreciation deductions and subtracting the fees you pay your property manager to run your rental unit. This can help you save a significant amount of money on your yearly taxes.

Inflation Protection

Over time, your property could increase in value because of the increased population in the area. This will give you an excellent return on your investment (ROI), especially if you invest in a property located in an up-and-coming area.

As the area around your property becomes more popular, the value of your property is likely to go up. This will protect your money against inflation.

When the cost of living goes up, your tenants’ rent payments will also go up. This means that your investment will be able to keep pace with inflation, providing you with a high return on your investment over time.

Of course, there’s no guarantee that your property’s value will appreciate. But even if it doesn’t, you’ll still earn income from the rent you’re receiving.

Start Investing in Your Future Today

There are many great benefits to investing in a rental property in Memphis. You could see a high return on your rental property investment with the right property and enjoy significant tax advantages and greater profitability. If you’re looking for a solid investment, a rental property should be top of your list.

Are you looking for the perfect investment property for you? Memphis Investment Properties can help. We specialize in helping Real estate investors find the perfect properties around the Memphis area.

Contact us today and start investing in your future.