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Looking to buy our first rental
Good morning, BP!
My Wife and I are looking to purchase our first rental to start building cash-flow (typical story, building generational wealth). We do not have much at all saved up for a down payment and are looking at areas in the south because of the low cost/medium rent. I am wondering if anyone has any insight on which areas of Memphis to avoid and if it has been saturated as looking online it appears there are a TON of rentals up for grabs and wondering if that is due to rental numbers going down or if it is just a larger city that has more supply. Looking forward to connecting and thank you in advance for any advice you can provide!
Also, if you are an investor realtor in the Memphis area please don't hesitate to reach out!
I’m not an expert by far but I have 4 long term rentals and just had to find tenants for two and it didn’t take very long. Seems the demand is still pretty high. Perhaps it’s less in certain segments but no problems on our end.
Quote from @Robert Walden:
I’m not an expert by far but I have 4 long term rentals and just had to find tenants for two and it didn’t take very long. Seems the demand is still pretty high. Perhaps it’s less in certain segments but no problems on our end.
Thanks for the reply! Sending you a DM.
- Real Estate Consultant
- Mendham, NJ
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You aren't ready for what you are trying to do because you are looking for cash flow in Memphis because the sale price works. I like Memphis as a whole, but if you don't Memphis by the block, you are going to get creamed. Many people buy in larger cities like this because the paper cash flow looks sweet, but the reality of it, across the board right now - good cash flow equals lower neighborhood class, more variable tenancies, and tons of hidden capital expenditures. Try to find something closer to where you live and don't rush. Passive income on a rental in Memphis is not a thing. You will overpay for property management for one property and when a furnace breaks or your plumbing line is shot you will be net negative for ten years.
- Real Estate Broker
- Memphis, TN
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Rental property characteristics can vary dramatically from street to street. Understanding these street-level nuances is crucial for finding the right rental property that meets your specific preferences and needs. Please feel free to send me a DM if you have any questions.
I own 4 long term rentals in Memphis, and I've found it to be a great city to invest in, so I'd really encourage you to find some good properties and get into the game! :) The rental market is really strong, but I'm not sure if you live locally or not. If not, I'd strongly recommend staying in the city for a weekend, driving around to different areas that you're looking to invest in and just getting a feel for the zip codes that you'd like to invest.
I'd also like to pass along this zip code breakdown done by Doug Skipworth and Dean Harris (from Crestcore) to give you a better idea of which areas to look for deals and which areas to avoid:
https://youtu.be/cl69pb2DvEo?si=LhstRWsBdds1v5Ml
I hope this was helpful! Feel free to reach out with any questions :)