Memphis real estate market

[Jay S.]

Hi, I am looking to buy rental properties in Memphis and Indianapolis ? Wondering which one is better value in terms of rentals ? Any help is appreciated.

[Alex Craig]

3 things are needed to be successful in real estate. Looks like you have narrowed down the market, which is important. Here are a few other tips. 

1) Buy the Right Property - meaning, the house should be set up on the front end for sustainable cash flow and located in the right part of town. A house with 30% equity does not do you much good if you have a old roof and HVAC system that will need replacing in the first several years. If the homes is not updated, prospective tenants will choose other homes to move into, which will prolong your vacancy and drive down your rent. The right part of town means homes where people want to live, not have to live. Lower rent areas tend to be more prone to vandalism and frequent tenant turns. Remember, you can fix the house, fix the property manager, fix the bad tenant, but you can't fix the neighborhood.

2) Buy in the Right Market -- make sure the landlord laws are friendly, property taxes are low, rents are increasing, not decreasing and there is a large enough tenant pool. Make sure the economy is sustainable for long term rental success. 

3) Right Property Manager -- everything else can be going right, but if you have a bad PM, then all that you have done right will not matter.  Choose a PM that you feel with communicate the best and be the most transparent with maintenance and billing.