Average Rental Time in Memphis

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Average Rental Time in Memphis

Abdul Azeez
Real Estate Investor 路 Monroe Township, NJ 路 Member since 2016 路 468 posts 路 85 votes

Folks - I am in the second part of my journey of investing in Memphis. I closed on a property on Jan 10 in Memphis. Property management has been turned over to Crestcore. The listing is at the following location:

http://www.zillow.com/homedetails/7942-Marsha-Wood...

I am looking for some input on the rental market in Memphis and how long it usually takes to rent a property. SInce its been a few weeks now, I am wondering if I should be doing something differently to generate more interest and a real tenant to be able to generate cash flow. Would appreciate input.

Regards,

Azeez

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Jay HinrichsBusiness Member
Real Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
9y

@Abdul Azeez  I learned this the HARD WAY out in the mid west...

much better to have lower rent and filled unit.

than risk kids breaking in an stripping your home. taking your condenser unit.. ( even if its caged)

I have 3 rentals left in the south.. I have not raised rents since the day I bought them 10 years ago.

but one tenant has been there the entire 10 years.. they were new homes so cap ex has been next to zero. granted I am probably 100 to 200 under market.. but what is 100 a month more going to do for me.. its about the long game and having your tenants payoff your house for you.

I know people talk about cash flow as real and appreciation as icing on the cake.. in my mind cash flow is the icing on the cake.. if you get it great but if your tenant is paying your house off that to me is the ultimate goal.

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  • Abdul Azeez
    OP
    Real Estate Investor 路 Monroe Township, NJ 路 Member since 2016 路 468 posts 路 85 votes
    9y

    Thanks so much Douglas. 

    1Reply
  • Abdul Azeez
    OP
    Real Estate Investor 路 Monroe Township, NJ 路 Member since 2016 路 468 posts 路 85 votes
    9y

    Thanks Dean. Will take into account on the next few purchases. It does have its own yard though.

    0Reply
  • Michelle J Olson
    Investor 路 Memphis, TN 路 Member since 2016 路 25 posts 路 11 votes
    9y

    we don't live far from the address, and houses that rent in our neighborhood are similar price, BUT, we're north of i385 and we're SFR with 20+ feet btwn our homes (are zero-lot-lines that are sharing a wall/connected on at least 1 side truly considered SFR? - they seem more like a duplex or a townhouse, IMO???) .... my family'd Love to see u get that kinda $$$$ for rent in that there area, but it seems a wee bit high for it (in MEM, one can see over million dollar mansions on 1 street & serious dilapidation in housing happening on the very next street (it's great that U've got Mr. Skipworth & his team with their local XP -- they know MEM .... I've never met him, but my son has and says he's a great guy & has good things happening in MEM & for MEM-which we surely do need!) .... & .... not to scare u away from MEM, not at all, it just seems that SE area is kinda slipping through the cracks (unfortunately) compared to how it was over there abt 10yrs ago .... and from what tiny bit of xp that my fam has with REI, we might not be of much help, but being a born & raised southerner, we can say that many southerners tend want some big ol' sprawls of space around us and come to expect it at them there kindsa higher prices. 馃槈

    Good luck 馃崁 and we'll be praying that you get a great tenant and a high price that can eventually help with the upkeep and rebuilding our city, esp. the beautiful sprawl of the SE MEM area ... 

    surely REI can still be Way better in the long run and than mutual funds, but IDK ????? (still in the early baby steps)

    2Reply
  • Michelle J Olson
    Investor 路 Memphis, TN 路 Member since 2016 路 25 posts 路 11 votes
    9y

    Oh yeah, our most recently rented SFR (in Millington/Shelby County) took abt 7 weeks .... in our wee bit of xp, this time of the year just seems tougher to rent out our places than say summer time before school starts & folks want to get their kiddos settled... but it's possible, because we just got a tenants in that Millington house this past wknd & another house is showing more interest (finally). Our family works together, so we manage it all ourselves + maintenance & repairs .... so I just don't have xp w/other Mgmt, but again, I only hear wonderful things abt Mr. Skipworth & his team!

    Wishing U all the best!馃悾

    1Reply
  • Ken Letourneau
    Wholesaler 路 bellflower, CA 路 Member since 2012 路 23 posts 路 3 votes
    9y

    i would also recommend buying a list of local tenants in the area and doing a small mailing to them that you have a rental for  rent.  always be pro active. you dont need a empty house out their . 

    ken letourneau 

    0Reply
  • Robert S.
    Contractor 路 Milltown, NJ 路 Member since 2016 路 297 posts 路 213 votes
    9y
    Abdul Azeez Thank you for starting this thread. I too am from NJ and interested in the Memphis market. I hope you can find the assistance you need to get your new property rented with a quality tenant. Judging from other BP members' responses you appear to be in the best hands possible. Best of luck.
    2Reply
  • John P.
    Investor 路 Vacaville, CA 路 Member since 2016 路 433 posts 路 249 votes
    9y

    I would try to relax and let the professsionsls do their job. You got a pm so you don't have to manage it. Concentrate on your day job. Just my two cents. 

    0Reply
  • Alex CraigBusiness Member
    Real Estate Professional 路 Memphis, TN 路 Member since 2009 路 1k+ posts 路 1k+ votes
    9y

    The best homes in the best areas for no other reason then bad timing can sit longer then expected.  So long as the marketing is good, the house is presentable and in good shape and better than other homes in the area, then it will rent. The key is waiting for that good tenant.  I would rather sit on the home vacant for 90 days, decline 10 applications and wait for the best qualified tenant. Three months of vacancy is nothing in the long run if you pick the right tenant that will stay for a very long time and take care of your place.  

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  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor 路 Sioux Falls, SD 路 Member since 2015 路 9k+ posts 路 18k+ votes
    9y
    Originally posted by @Curt Davis:

    Abdul,

    I think you are asking far too much for your rental. Also my personal opinion is that attached homes are far less desirable then a detached SFR. Looking on rentometer.com it appears your rent is in line but I think it might be off and taking into account actual detached homes as opposed to attached ones. You might consider lowering the rent to $950 and see what happens.

    Signs in the yard and Craigslist are probably the 2 best forms of advertising in our market.

    Good luck

    I am curious about the term "attached" versus "detached". It seems to me that an attached property is multifamily. A single family rental by definition is a stand-alone property. Once you attach properties, they become duplex, triplex, four-plex, etc. I see people post multifamily properties on Craigslist all the time under Single Family Homes and it is deceptive. There is a reason they have a different category for multifamily. Many people don't want to share a wall with someone. The point here is that I think he needs to price and market the property as what it is.

    0Reply
  • Curt DavisBusiness Member
    Flipper/Rehabber 路 Memphis, TN 路 Member since 2008 路 5k+ posts 路 2k+ votes
    9y

    These are attached homes but 2 different owners.  It does not fall into the category of a duplex.

    They are not my favorite types of homes.

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  • Abdul Azeez
    OP
    Real Estate Investor 路 Monroe Township, NJ 路 Member since 2016 路 468 posts 路 85 votes
    9y

    @Joe Splitrock - Where do you see detached advertised?

    0Reply
  • Abdul Azeez
    OP
    Real Estate Investor 路 Monroe Township, NJ 路 Member since 2016 路 468 posts 路 85 votes
    9y

    @Curt Davis - I believe its a good property for the area. Need to wait and watch what happens. 

    0Reply
  • Curt DavisBusiness Member
    Flipper/Rehabber 路 Memphis, TN 路 Member since 2008 路 5k+ posts 路 2k+ votes
    9y

    I do wish you the best of luck with this home.  It will eventually rent out and you should do well if you can get or come close to your asking rent.  I am personally just not a fan of them and if you look at most of the other turnkey providers in our market you will see that most of them do not sell these types of homes. I think for your future purchases to stick to detached SF homes.  

    Keep us posted on when it rents out, I would like to know what you get.

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    0Reply
  • Abdul Azeez
    OP
    Real Estate Investor 路 Monroe Township, NJ 路 Member since 2016 路 468 posts 路 85 votes
    9y

    @Curt Davis -- Thanks Curt. Maybe for future ones I can look at SFHs.

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor 路 Sioux Falls, SD 路 Member since 2015 路 9k+ posts 路 18k+ votes
    9y
    Originally posted by @Abdul Azeez:

    @Joe Splitrock - Where do you see detached advertised?

     I don't see the word detached or attached. Your Zillow listing says Single Family Home and nowhere in the description does it say it is a twinhome or townhouse. I cannot tell from the photo what it is, because they cropped the adjoining properties. I assumed it was a single family home until it was pointed out otherwise. In my city if someone has a twinhome, they state that in the description on Zillow. 

    As far as the terminology, I have been in the business 15 years and I have not heard the terms attached and detached used until today. It is probably regional terminology. Regardless, you probably want to disclose the type of property in any listing, so that you are attracting the right people. Also your pricing needs to reflect property type. In my part of the country, houses get more rent than twinhomes (assuming same age, size, etc). I am not saying your pricing is high. I would just look at comparable properties on Craigslist or Zillow and make sure you are priced competitive.

    0Reply
  • Abdul Azeez
    OP
    Real Estate Investor 路 Monroe Township, NJ 路 Member since 2016 路 468 posts 路 85 votes
    9y

    @Joe Splitrock I don't have control into the listing. The PM owns the listing.

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor 路 Sioux Falls, SD 路 Member since 2015 路 9k+ posts 路 18k+ votes
    9y
    Originally posted by @Abdul Azeez:

    @Joe Splitrock I don't have control into the listing. The PM owns the listing.

     I understand you don't have direct control, but as the property owner you can ask them to change a listing. There is nothing wrong with asking a PM why they chose to not include certain details. Keep in mind that a PM manages lots of properties, so you need to be your own best advocate. In the past, I have asked PM to change out photos or add details to the listing. Anything that I think will help get my property rented faster is within my rights to ask. 

    0Reply
  • Stephen Akindona
    Investor 路 Memphis, TN 路 Member since 2013 路 741 posts 路 845 votes
    9y

    Keep us posted on things @Abdul Azeez!

    1Reply
  • Abdul Azeez
    OP
    Real Estate Investor 路 Monroe Township, NJ 路 Member since 2016 路 468 posts 路 85 votes
    9y

    Folks. I appreciate all the helpful suggestions. I will keep you posted on what happens. I really want this to be a positive experience for my first investment in Memphis so that I can continue building my portfolio. I am keeping my fingers crossed that something is going to work out soon. Thanks again for all the helpful insights. 

    2Reply
  • Rolanda Eldridge
    Investor/Realtor 路 Hoover, AL 路 Member since 2010 路 1k+ posts 路 459 votes
    9y
    It's definitely worth dropping the price. Try 985.00... You are losing a huge group of prospects, being over $1000...
    0Reply
  • Abdul Azeez
    OP
    Real Estate Investor 路 Monroe Township, NJ 路 Member since 2016 路 468 posts 路 85 votes
    9y

    Rolanda Eldridge - I am waiting for feedback from my PM. I could drop it to $750 and get it rented tomorrow. That is not the solution. Rents need to be realistic with the market. Rentometer shows an average of $1200 and median of $1250. Even if I dropped $150 because it's not a detached that will bring it to $1050 to $1100 and nowhere close to what you have recommended.

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor 路 Sioux Falls, SD 路 Member since 2015 路 9k+ posts 路 18k+ votes
    9y
    Originally posted by @Abdul Azeez:

    Rolanda Eldridge - I am waiting for feedback from my PM. I could drop it to $750 and get it rented tomorrow. That is not the solution. Rents need to be realistic with the market. Rentometer shows an average of $1200 and median of $1250. Even if I dropped $150 because it's not a detached that will bring it to $1050 to $1100 and nowhere close to what you have recommended.

    Rentometer is not very accurate in my part of the country, but maybe it is better there. You can see on Zillow that someone tried to rent the property last year for $1125 and it appears they finally dropped the price to $975. Then it looks like you purchased it in January. It appears this property is having trouble renting. Another concerning trend is that the property keeps dropping in sales price. In 2001 it was $111K, then in 2013 it was $100K and now you paid $83K. In most parts of the country prices have rebounded higher than 2001 or 2013 levels, so this seems strange. 

    3Reply
  • Abdul Azeez
    OP
    Real Estate Investor 路 Monroe Township, NJ 路 Member since 2016 路 468 posts 路 85 votes
    9y

    @Joe Splitrock Without rushing to any conclusion, I believe the property was a great buy. It is in perfect condition and I believe I bought it with built in equity. So, I have no regrets regarding that. You shouldn't go by Zillow information because they might have advertised for rent but never rented it and instead sold it. The seller was an investment firm that probably wanted to get out of the market. So, as I said above, I have no regrets because I believe it is something I bought with a good amount of built in equity. I am just awaiting f/b from my PM at this time. it looks like I may need to lower the rent.

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor 路 Sioux Falls, SD 路 Member since 2015 路 9k+ posts 路 18k+ votes
    9y
    Originally posted by @Abdul Azeez:

    @Joe Splitrock Without rushing to any conclusion, I believe the property was a great buy. It is in perfect condition and I believe I bought it with built in equity. So, I have no regrets regarding that. You shouldn't go by Zillow information because they might have advertised for rent but never rented it and instead sold it. The seller was an investment firm that probably wanted to get out of the market. So, as I said above, I have no regrets because I believe it is something I bought with a good amount of built in equity. I am just awaiting f/b from my PM at this time. it looks like I may need to lower the rent.

    I agree it looks like a great buy, but also looks like whoever owned it had trouble renting it. 

    1Reply
  • Matt R.
    Sherman Oaks, CA 路 Member since 2013 路 3k+ posts 路 2k+ votes
    9y
    Originally posted by @Abdul Azeez:

    @Joe Splitrock Without rushing to any conclusion, I believe the property was a great buy. It is in perfect condition and I believe I bought it with built in equity. So, I have no regrets regarding that. You shouldn't go by Zillow information because they might have advertised for rent but never rented it and instead sold it. The seller was an investment firm that probably wanted to get out of the market. So, as I said above, I have no regrets because I believe it is something I bought with a good amount of built in equity. I am just awaiting f/b from my PM at this time. it looks like I may need to lower the rent.

    I think this home sold to you for 28% less than it sold for new in 2000 -01. Another sold for 40% less in what appears to be same tract/street in close to the same time periods. This is fairly common though. This might be trending up now but not the historicals just yet. 

     I am sure your PM is doing all they can. My friend manages his own out of state and it took over 500 phone calls to get one tenant. That tenant is now moving out after one year. Certain 2nd tier locations can be more challenging to manage obviously. It must be nice to have such a good PM as many never find even one for any significant amount of time. Good luck!

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