Memphis real estate investing offers tremendous opportunities for those wanting to be in the rental market. Memphis, like most major cities, has a very diverse population. Some parts of Memphis have a very small rental market (upscale areas) while you are better off avoiding others because of high crime rates and high unemployment rates.
Still, Memphis has a stronger rental market than most major cities. Some of the best parts of Memphis for rentals are East Memphis/Colonial Acres, High Point Terrace, parts of Midtown, Cordova, the University of Memphis, White Station, and Grahamwood areas, enjoy healthy demand from good tenants because they are close to jobs and amenities. Other areas such as Berclair and Southeast Memphis (including Fox Meadows and Parkway Village) also have reliable rental demand.
Memphis Rental Management Tips
Rental real estate in Memphis is one of the more lucrative investment opportunities you will find. However, you can’t one day just decide to become a landlord. To make money in the Memphis real estate market you do need to know the ropes. If you’re new to the market, you should consider using a property management company until you become confident you understand the regulations involved and are knowledgeable about placing competent tenants in your properties.
Real estate is about location, location, location. You don’t need to know the global rental market but here are some tips you want to educate yourself about for the Memphis market:
- Obviously, you need to understand the various markets that exist within the Memphis metropolitan area. The list at the beginning of this article are good places to begin with.
- You need to learn such basics as the vacancy rate, the average amount of rent being charged each month, and the history of rental rates over the past five years or so. Have rents kept up with or exceeded the inflation rate? A major reason people invest in real estate is that it typically appreciates in value faster than inflation. You need this information specific to the neighborhood you are considering investing in.
- There are also technical and legal requirements both at the federal and local level that you need to comply with. By using a property management company, at least for a while, you can more quickly become knowledgeable about your obligations.
Memphis Rental Management Example
Here is a good reason that you need to know rental markets at the local level. Tennessee Code Annotated (T.C.A.) 66-28-201(c) states in part that:
Rent shall be payable without demand at the time and place agreed upon by the parties. Notice is specifically waived upon the nonpayment of rent by the tenant only if such a waiver is provided for in a written rental agreement.
What that means in real-world language is that, as a landlord, you must give tenants written notice that they are behind in the rent if they fail to pay and before you can begin eviction proceedings. Reality is that owners are busy people and may go several weeks before realizing that a tenant failed to pay the rent. That effectively slows down the eviction process. However, by including the clause below in your lease agreement, you are no longer required to give the tenant written notice that they failed to pay the rent.
Rent is due without demand or notice from Manager/Landlord.
Please leave a comment if this article was helpful or if you have a question.
Author bio: Brian Kline has been investing in real estate for more than 35 years and writing about real estate investing for 10 years. He also draws upon 30 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest. With the Pacific Ocean a couple of miles in the opposite direction.