The number one reason to invest in real estate is to generate a passive income for yourself so you can enjoy more of the things you want. However, not all real estate investments are created equal. We all want to enjoy excellent returns and tax advantages while leveraging real estate to build wealth. Here are the top seven reasons why Millennials are looking to the Memphis real estate market to grow their wealth with income. #GoalsAF
- Increase in Property Value: Memphis real estate properties have increased in value by 5.1 percent this past year and the median home value is currently $85,900. This number is expected to go up another 2.3 percent within the next year, which is good news for real estate investors in Memphis.
- Affordability for first-time buyers: To quote a recent First American report, “Our analysis shows that cities such as Memphis, Oklahoma City, and Pittsburgh are areas where millennial first-time home buyers will have the best outlook for homeownership.” The company analyzed housing markets across the country, with an emphasis on cost. Specifically, they wanted to find cities with a high percentage of affordable homes for millennials and other first-time home buyers. Affordability in this context assumes that one-third of the home buyer’s pre-tax income is used for the mortgage payments.
- The Memphis Job Market: Memphis is the #1 metro area in the U.S. for job creation when compared to the average area employment rate over the past 10 years. Three Fortune 500 companies are located in Memphis: FedEx Corp., AutoZone Inc., and International Paper Co. The metro area is home to literally thousands of large and small companies attracted by the entrepreneurial spirit and business-friendly climate in Memphis. Remember, all these people are making money and need a place to live! A strong and growing local economy with good-paying jobs is key to healthy rental property demand and low vacancy rates.
- Increased Demand and Shrinking Supply: The Memphis Business Journal states that fewer new homes are being built in Memphis and according to CNBC, the housing supply in Memphis could hit a new low. If you’re wondering why Zillow still rates the Memphis housing market as “very hot…” Consider this, the very same factors that make the market less attractive for owner-occupants makes the market that much more attractive to real estate investors.
- Memphis Cost of Living: Residents of Memphis have a lot of reasons to stay in Memphis. It is a very inexpensive place to live with low housing costs and no state income tax. Memphis was near the top of Money.com’s list of the least expensive cities in the country to raise a child.
- Memphis Renter’s Market: Memphis has a high percentage of renters compared to most other markets in the country. The owner-occupied housing unit rate in Memphis Tennessee is 47.5% compared to the national rate of 63.5%. This combined with the shortage of homes on the market for sale, the diversified economy, strong job market, and excellent quality of life, Memphis is the best place for rental property investors.
- Higher-than-average returns: The most attractive factor to real estate investors in Memphis is the ability to make higher-than-average returns while taking less time on each project than the national average.
The Bottom Line
It’s no secret that Memphis is famous for the four S’s: soul, sauce, sports, and street-food! It’s the second-largest metro area in the region, and is a great рlасе tо work, live, and with a booming real estate market, it’s quickly becoming a top choice for millennials wanting to invest in real estate.