REI in Tennessee.. Good, bad and ugly
Member since 2022 · 14 posts · 7 votes
REI in Tennessee.. Good, bad and ugly
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Rental Property Investor · Frankfort, KY · Member since 2021 · 20 posts · 22 votes
4yQuote from @Christie Speciale:
Changing directions here.. looking to invest in long term rentals in TN (likely duplex but will consider a single family residence). I was considering Memphis but have been turned away by several opinions (mostly people who are not investors).. Also looking at Chattanooga..
Any opinions, suggestions or comments?! Input on the areas I mentioned? Any other areas I should be looking at?
Thanks!!
Have you considered Knoxville? I-40 and I-75 cross the city, a large University, just outside of the Smokey Mountains, and Oak Ridge and TVA are not too far away. Just a thought.
23 Replies
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes4y
Quote from @Christie Speciale:
Changing directions here.. looking to invest in long term rentals in TN (likely duplex but will consider a single family residence). I was considering Memphis but have been turned away by several opinions (mostly people who are not investors).. Also looking at Chattanooga..
I thought about investing in Nashville, but then I visited and quickly changed my mind. Some spots look nice, but there's a lot of bad going on under the surface. Many of the locals had a lot of bad to say about crime, growth, government. The only reason they don't move? Stuck in a job or staying near family. I hear Memphis is much worse. Smaller towns farther away from Nashville and Memphis would probably be better.
The DIY Landlord Book4.7248 Reviews - Rental Property Investor · Frankfort, KY · Member since 2021 · 20 posts · 22 votes4y
Quote from @Christie Speciale:
Changing directions here.. looking to invest in long term rentals in TN (likely duplex but will consider a single family residence). I was considering Memphis but have been turned away by several opinions (mostly people who are not investors).. Also looking at Chattanooga..
Any opinions, suggestions or comments?! Input on the areas I mentioned? Any other areas I should be looking at?
Thanks!!
Have you considered Knoxville? I-40 and I-75 cross the city, a large University, just outside of the Smokey Mountains, and Oak Ridge and TVA are not too far away. Just a thought.
- Member since 2022 · 14 posts · 7 votes4y
Quote from @Wendell Clark:
Quote from @Christie Speciale:
Changing directions here.. looking to invest in long term rentals in TN (likely duplex but will consider a single family residence). I was considering Memphis but have been turned away by several opinions (mostly people who are not investors).. Also looking at Chattanooga..
Any opinions, suggestions or comments?! Input on the areas I mentioned? Any other areas I should be looking at?
Thanks!!
Have you considered Knoxville? I-40 and I-75 cross the city, a large University, just outside of the Smokey Mountains, and Oak Ridge and TVA are not too far away. Just a thought.
I have.. are there any areas you’d suggest? We are not familiar with the area AT ALL! Thanks!
- Real Estate Agent · Knoxville, TN · Member since 2020 · 54 posts · 42 votes4y
I'm from Memphis and used to own several rentals in the East Memphis area. I have sold all of my Memphis rentals and converted them to STR investments. While all of my Memphis properties performed well for LTRs, I will not be investing in Memphis in the future for a few reasons: Crime is pretty out of control (if you're not from the area, it can be tough to navigate this), it can be a tough rental market due to professional renters (folks who take advantage of landlords), and the last reason is that it's highly competitive. Most of the deals are captured by turn-key companies and sold to out-of-state investors that are okay with thin margins because the real estate is cheap.
I'm investing in Smoky Mountain STRs and Knoxville LTRs in the near future. Both are great markets.
- Rental Property Investor · Frankfort, KY · Member since 2021 · 20 posts · 22 votes4yI lived in Knoxville several years ago, but I do not hold any property in TN (at the moment). Maybe someone can suggest a specific area. I think all of Knoxville has potential because of what surrounds Knoxville. Best of luck!
Quote from @Christie Speciale:
Quote from @Wendell Clark:
Quote from @Christie Speciale:
Changing directions here.. looking to invest in long term rentals in TN (likely duplex but will consider a single family residence). I was considering Memphis but have been turned away by several opinions (mostly people who are not investors).. Also looking at Chattanooga..
Any opinions, suggestions or comments?! Input on the areas I mentioned? Any other areas I should be looking at?
Thanks!!
Have you considered Knoxville? I-40 and I-75 cross the city, a large University, just outside of the Smokey Mountains, and Oak Ridge and TVA are not too far away. Just a thought.
I have.. are there any areas you’d suggest? We are not familiar with the area AT ALL! Thanks!
- 4yChris ClothierBusiness MemberRental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
First off, where you invest has a lot to do with why you are investing. You say you want to invest in long-term rentals and I assume you are going to be hands-off? Are you looking at a short horizon like 5-7 years or longer? Are you wanting to learn the business as you go or are you looking to diversify and simply want passive properties? I'm asking because you mention possibly a duplex but would consider SFR. Duplexes are often found in parts of a city (though not always) where there is more of transient lifestyle. They also attract amore transient resident. In my experience, that leads to more turnovers and move time vacant. Personally, that is not what I want out of a long-term investment. I personally want long occupancy, low vacancy and residents that hav a higher probability of treating a rental property as their own. So, consider what kind of property you are looking for. If you want the possible higher income from a duplex, then any of the four major cities in Tennessee are going to have great opportunities and I would concentrate on university areas. Memphis, Nashville, Chattanooga and Knoxville all three have large universities near the city center areas and lots of opportunities with small multi-unit dwellings. These are perfect and perfectly located for students with one downside being that they will go vacant on a more consistent basis.
If you're looking for single-family, I like Memphis to most for the pricing compared to the value you can get and the residents. Although, I am a big fan of all three of the other markets. I think Nashville may be the most competitive and take the most time to find what you are looking for because the market is super hot right now with a lot of growth. The suburbs are growing like wild-fire. I think Chattanooga may be the most over-looked at this time but not for long and although Knoxville has the University of Tennessee and is well known, it also is over-looked from an investment standpoint. You also have the tri-cities near Johnsonville in the northeast corner that offer stable residents and good opportunities.
Spend some time charting the markets and speak to a few different investors in each area asking the pros and cons. As in any city and any location there are always locals that can guide you to find what meets your criteria and risk level. Feel free to reach out with questions specifically on west Tennessee, but I am confident that you can find the good in any of these cities even though there is bad and ugly in each as well.
Best to you -
- Member since 2022 · 14 posts · 7 votes4yThanks so much for this information.. this is the information I was looking for!
Quote from @Chris Clothier:
First off, where you invest has a lot to do with why you are investing. You say you want to invest in long-term rentals and I assume you are going to be hands-off? Are you looking at a short horizon like 5-7 years or longer? Are you wanting to learn the business as you go or are you looking to diversify and simply want passive properties? I'm asking because you mention possibly a duplex but would consider SFR. Duplexes are often found in parts of a city (though not always) where there is more of transient lifestyle. They also attract amore transient resident. In my experience, that leads to more turnovers and move time vacant. Personally, that is not what I want out of a long-term investment. I personally want long occupancy, low vacancy and residents that hav a higher probability of treating a rental property as their own. So, consider what kind of property you are looking for. If you want the possible higher income from a duplex, then any of the four major cities in Tennessee are going to have great opportunities and I would concentrate on university areas. Memphis, Nashville, Chattanooga and Knoxville all three have large universities near the city center areas and lots of opportunities with small multi-unit dwellings. These are perfect and perfectly located for students with one downside being that they will go vacant on a more consistent basis.
If you're looking for single-family, I like Memphis to most for the pricing compared to the value you can get and the residents. Although, I am a big fan of all three of the other markets. I think Nashville may be the most competitive and take the most time to find what you are looking for because the market is super hot right now with a lot of growth. The suburbs are growing like wild-fire. I think Chattanooga may be the most over-looked at this time but not for long and although Knoxville has the University of Tennessee and is well known, it also is over-looked from an investment standpoint. You also have the tri-cities near Johnsonville in the northeast corner that offer stable residents and good opportunities.
Spend some time charting the markets and speak to a few different investors in each area asking the pros and cons. As in any city and any location there are always locals that can guide you to find what meets your criteria and risk level. Feel free to reach out with questions specifically on west Tennessee, but I am confident that you can find the good in any of these cities even though there is bad and ugly in each as well.
Best to you -
Yes, we will be hands off as we currently reside in NY. I’m researching different areas to get a feel for the best place to invest at this point. I agree that Chattanooga is being overlooked (I think TN is in general and that’s why it’s on my radar but I am completely unfamiliar with the state making it difficult to know where to start). We want to fly down but we aren’t sure what area to begin with?!
I was considering a duplex for ROI considering the areas in TN (college students, etc) but we currently own single family residences in upstate NY that do great; however, they are completely different areas.I’d prefer longer occupancy and lower vacancy, I just didn’t know if there was a need for single family rentals in those areas like there are duplexes?!
I’d love to speak more as I don’t have any connections in TN.
- Member since 2022 · 14 posts · 7 votes4y
Quote from @Corbin Loveless:
I'm from Memphis and used to own several rentals in the East Memphis area. I have sold all of my Memphis rentals and converted them to STR investments. While all of my Memphis properties performed well for LTRs, I will not be investing in Memphis in the future for a few reasons: Crime is pretty out of control (if you're not from the area, it can be tough to navigate this), it can be a tough rental market due to professional renters (folks who take advantage of landlords), and the last reason is that it's highly competitive. Most of the deals are captured by turn-key companies and sold to out-of-state investors that are okay with thin margins because the real estate is cheap.
I'm investing in Smoky Mountain STRs and Knoxville LTRs in the near future. Both are great markets.
Are you looking at single family homes in Knoxville for your long term rentals?
- Real Estate Agent · TN (tennessee) · Member since 2021 · 21 posts · 19 votes4y
It was previously mentioned, but I strongly suggest looking at the suburbs of Nashville. Clarksville, Murfreesboro and Columbia are all markets where properties can be bought cheap, but appreciation is on the rise. I work heavily in these areas and would love to share more info anyone wants a deeper analysis of each location.
- Memphis, TN · Member since 2022 · 230 posts · 99 votes4y
I was born and raised here in the Memphis, Tn area. It is a great place to live, and an even better place to invest in my opinion.
There are a few areas in Memphis that I believe offer great potential and value for investors that are looking for long-term hold plays here in the area. Some of these areas include Bartlett (38134,38135), Cordova (38016, 38018), Colonial Acres (38117), and Southwind (38125).
If you would like to talk more about any of the areas in Memphis feel free to reach out with any questions.
- Real Estate Consultant · Chattanooga, TN · Member since 2018 · 384 posts · 330 votes4y
Chattanooga is a fabulous market, and you're right to consider it. There are a lot of good points made on here that we can't recommend a market without knowing your specific goals. In comparing Chattanooga to Memphis, Chattanooga is more of hybrid market where you'll get cashflow and appreciation, versus Memphis is more of a cashflow market (to my knowledge). Chattanooga is growing- 45th metro area in the nation. in terms of growth in 2021. Low property taxes, growing population, etc.
Chattanooga has a respectable number of MF, I will say SF is also a fabulous investment in the area. I typically recommend in this market people stay open to both options, and just evaluate the deals.
Knoxville is the other area I'd look in TN, based on what you have shared.
- Realtor · Gatlinburg, TN · Member since 2018 · 261 posts · 155 votes4y
Johnson City, Chattanooga & Knoxville are hot spots for long term rentals but get ready for competition on anything LTR b/c you'll be competing against other investors and home buyers.
Smoky Mountains are well known for short term rentals, but the long term rentals are in high demand as well. The service & tourism industries, from what I've heard for the last 6mo, are in dire need of affordable & quality housing.
- Member since 2022 · 14 posts · 7 votes4yI’m going to connect with you!
Quote from @Adrienne Green:
Chattanooga is a fabulous market, and you're right to consider it. There are a lot of good points made on here that we can't recommend a market without knowing your specific goals. In comparing Chattanooga to Memphis, Chattanooga is more of hybrid market where you'll get cashflow and appreciation, versus Memphis is more of a cashflow market (to my knowledge). Chattanooga is growing- 45th metro area in the nation. in terms of growth in 2021. Low property taxes, growing population, etc.
Chattanooga has a respectable number of MF, I will say SF is also a fabulous investment in the area. I typically recommend in this market people stay open to both options, and just evaluate the deals.
Knoxville is the other area I'd look in TN, based on what you have shared.
- Member since 2022 · 3 posts · 0 votes4y
@Nathan G. We are located about 20 minute east of downtown Nashville and our town is packed to the max (zero inventory) and are still expected to grow by 30,000 by 2045.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes4y
Quote from @Chris Clothier:
First off, where you invest has a lot to do with why you are investing. You say you want to invest in long-term rentals and I assume you are going to be hands-off? Are you looking at a short horizon like 5-7 years or longer? Are you wanting to learn the business as you go or are you looking to diversify and simply want passive properties? I'm asking because you mention possibly a duplex but would consider SFR. Duplexes are often found in parts of a city (though not always) where there is more of transient lifestyle. They also attract amore transient resident. In my experience, that leads to more turnovers and move time vacant. Personally, that is not what I want out of a long-term investment. I personally want long occupancy, low vacancy and residents that hav a higher probability of treating a rental property as their own. So, consider what kind of property you are looking for. If you want the possible higher income from a duplex, then any of the four major cities in Tennessee are going to have great opportunities and I would concentrate on university areas. Memphis, Nashville, Chattanooga and Knoxville all three have large universities near the city center areas and lots of opportunities with small multi-unit dwellings. These are perfect and perfectly located for students with one downside being that they will go vacant on a more consistent basis.
If you're looking for single-family, I like Memphis to most for the pricing compared to the value you can get and the residents. Although, I am a big fan of all three of the other markets. I think Nashville may be the most competitive and take the most time to find what you are looking for because the market is super hot right now with a lot of growth. The suburbs are growing like wild-fire. I think Chattanooga may be the most over-looked at this time but not for long and although Knoxville has the University of Tennessee and is well known, it also is over-looked from an investment standpoint. You also have the tri-cities near Johnsonville in the northeast corner that offer stable residents and good opportunities.
Spend some time charting the markets and speak to a few different investors in each area asking the pros and cons. As in any city and any location there are always locals that can guide you to find what meets your criteria and risk level. Feel free to reach out with questions specifically on west Tennessee, but I am confident that you can find the good in any of these cities even though there is bad and ugly in each as well.
Best to you -
Johnson City, not Johnsonville :) .
I would say to the original poster that we (TN) have largely been "discovered" by this point. Our portfolio (I'm in JC) has barely budged the last 2 years because most anything that can be value-add has already been sucked up. We have a waiting list for our rental properties here (SFHs); I don't think I've put out one of our fancy signs in probably 3 or 4 years now at least.
HOWEVER, it depends on what kind of money you have to spend and what you consider an acceptable return. The properties I've held here for years are now easily bringing a return of 25%+ annually. Ones I've bought in the last 2 years are somewhere around 10-12%. If I were to buy something this year the return would probably be in the 5-7% range. Our rents are rising, but not nearly as fast as the cost of purchasing.
Skyline Properties - Ooltewah, TN · Member since 2018 · 3 posts · 1 vote4y
@Christie Speciale
I am an agent and investor in Chattanooga with SFH and duplexes scattered through Chattanooga and some just across the border in North GA. I love it here both to live and as an investor. There are deals to be found both on and off market if you are looking and ready to move.
- Rental Property Investor · Knoxville, TN · Member since 2018 · 24 posts · 28 votes4y
I live and invest in Knoxville and highly recommend it. Be prepared to pay over asking though. It is crazy competitive here right now. Chattanooga is a great place to invest as well. Good luck in fabulous Tennessee!
- 4yJames WachobBusiness MemberReal Estate Broker · Memphis, TN · Member since 2015 · 1k+ posts · 887 votes
Sure Memphis has it's challenges like any larger city. However, this allows investors to find value by investing ahead of the path of progress. Recently Ford announced a $5.6 Billion Investment in the Memphis Regional Megasite for one of the largest battery and vehicle manufacturing campuses in the U.S. While St. Jude Children’s Research Hospital announces largest strategic expansion in its history targeting pediatric catastrophic diseases globally Six-year plan to invest $11.5 billion with donor support to accelerate research and treatment worldwide and FedEx continues to invest in Memphis with addition of their Logistics Opens Global Headquarters in Downtown Memphis.
- Attorney · Durham, NH · Member since 2019 · 292 posts · 126 votes4y
Memphis really disappointed me my last visit.
I've been trying to tack on Chattanooga to other travel.
I have a new contact east of Nashville I'll be following up with. (And Nashville is on my list of prospective cities to host a midsize real estate investing conference)
- 4yDean HarrisBusiness MemberReal Estate Agent · Memphis, TN · Member since 2015 · 1k+ posts · 1k+ votes
I own a portfolio of rentals in Memphis and they are performing really well. In part because I take care of my houses and I don't buy in areas that haven't historically been good areas. Investor's go bad in Memphis by buying houses from a property source that is trying to make money and not trying to help you build a business by selling houses in areas where they found a cheap house that they can make money on. They don't realize that one comes with the other! Make sure your property source owns rentals in Memphis. I don't mean 5-10 either. I mean 40-50+ houses and has some experience in our market! Buy houses from that person, take care of your properties and properly vet your tenants.
I also have a free podcast where I break down zip codes and talk about the city of Memphis and how to invest here. Its free and I share this with all of my investor colleagues and I'm happy to do that for anyone in here! This is all based on my personal investing experience in Memphis!
Take care and best of luck!
CrestCore Realty4.713 Reviews - Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes4y
Quote from @Nathan Gesner:
Quote from @Christie Speciale:
Changing directions here.. looking to invest in long term rentals in TN (likely duplex but will consider a single family residence). I was considering Memphis but have been turned away by several opinions (mostly people who are not investors).. Also looking at Chattanooga..
I thought about investing in Nashville, but then I visited and quickly changed my mind. Some spots look nice, but there's a lot of bad going on under the surface. Many of the locals had a lot of bad to say about crime, growth, government. The only reason they don't move? Stuck in a job or staying near family. I hear Memphis is much worse. Smaller towns farther away from Nashville and Memphis would probably be better.
I'm honestly very surprised to hear this feedback about Nashville.
What bad did you see happening under the surface?
The locals are mad about everything, all the time. Mad about development, ANY development. The facebook pages go nuts. People act as if they would rather live next to a condemned home rather than a brand new modern home. Statistically speaking crime has been drastically reduced in Nashville. Between 2014-2016 there were several types of crime that recorded their lowest ever number on record since the 1970s.
We are struggling to maintain police officers on the force....but that has more to do with larger political issues than anything.
What group of people have anything good to say about government???? I mean that's a given. Probably upset about the property tax hike we had a few years ago.
The growth here is incredible. Money is still pouring into Nashville from all parts of the country. There are cranes filling the skies and new developments announced all the time.
The overall outlook for Nashville is very positive and I'm bullish on both the city and the surrounding areas. We have one of the lowest tax burdens of any metropolitan area, along with a very business friendly state. I'm still getting calls every week from out of state people looking to move to Nashville. People and businesses want to be here.
- Member since 2020 · 3 posts · 0 votes4y
We decided to open a new investment branch here in Chattanooga. I live here now and we are seeing great things in the area as far as appreciation and rent rates. Happy to connect if you would like to learn more about the market here!
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