Average Rental Time in Memphis

Real Estate Investor · Monroe Township, NJ · Member since 2016 · 468 posts · 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 · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

@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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Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
9y
Originally posted by @Diane G.:

@Jan H.
@Matt R.
About 3 weeks ago, I got a new hard wood floor for my condo that is renting $4500... I have known the floor guy for 10 years and I know him so well that I don't usually ask for quote prior to work being done.. I just tell him what I need done, and he will do it and send me a bill afterwards...
This time, the wood has a certain pattern on it, and when he installed it, the pattern got aligned up in the middle of living room right upon entry... it looked like little foot steps going across the room, really crappy look...He sent me a pic and looked ok in picture..
When I popped over, I almost fainted... I asked him to come back and redo the entire room right away... If I were OOS, I won't find it out... And for people paying $4500, they are on the picky side if I may say that... Guess what is going to happen to that property then?
Luckily, I am local... It is 45 minutes away....
That is one of the problems with being too far away and then having to rely on a low paid manager who is now the steward of your investment and income. The whole business premise is sketchy from the word go. Good ones exist still but things like regular inspections might still be a challenge. The best arrangements I have seen is where the manager is also part owner.
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Jan H.
Investor · Saint Johns, FL · Member since 2015 · 141 posts · 100 votes
9y
Agree @Matt R. with your above comment, partnering is the way to go.
@Diane G. I see what you're saying there. I think you're comparing your class A rental in the Bay Area (SF?) to a B or C or below class in Memphis which is not equal in terms of quality of finishes, quality of workmanship/materials needed.
Besides, for $450/mo. you should be able to find a pretty darn good PM imho. If you can't, I would happily volunteer! :)
1 Reply
Diane G.
CA · Member since 2016 · 1k+ posts · 1k+ votes
9y
@Jan H.
Thanks for your offer... And no kidding, my $4500 tenants are usually travelling half of the time, if not for business for personal pleasure... I usually hear from them once a year if that much.....No need for pm....
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James WachobBusiness Member
Real Estate Broker · Memphis, TN · Member since 2015 · 1k+ posts · 890 votes
9y
The key is to find a great team! Ideally you would find a company that has everything under one roof. Acquisitions team, renovation crews (fully licensed and insured), Property Management, and a Real Estate Investment Brokerage in case you ever decide to sell.
By teaming up with a solid firm you can mitigate your risk and have some "boots on the ground" that have your best interest in mind.
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Abdul Azeez
OP
Real Estate Investor · Monroe Township, NJ · Member since 2016 · 468 posts · 85 votes
9y
Wanted to share an update. Received my first check this month after the new PM rented it out. Jury is still out on performance of the asset in upcoming months. I will wait and watch but for now it feels good to receive something that validates the asset.
@James Wachob Thank you for the referral to the PM. I will keep you posted if I have any issues.
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Joseph S.
Investor · Pasadena, CA · Member since 2013 · 28 posts · 26 votes
9y
@Abdul Azeez , glad to hear things are getting back on track! Which PM did you decide to go with? How many days did it take for them to rent the property (from management agreement signed to lease signed)? What price did it get rented for?
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Abdul Azeez
OP
Real Estate Investor · Monroe Township, NJ · Member since 2016 · 468 posts · 85 votes
9y
Originally posted by @Joseph S.:

@Abdul Azeez , glad to hear things are getting back on track! Which PM did you decide to go with? How many days did it take for them to rent the property (from management agreement signed to lease signed)? What price did it get rented for?
It was rented for $995 within a month of agreement sign in to tenant move in. I have transferred to Reedys. I did have to incur a bit of rehab cost (about $600 or so) as the feedback they provided was that there was an overpowering pet odor which had to be deep cleaned and lock changed. I am not there and so I do not know how important this was or not but it is rented now. I still need to wait and watch how the performance would be.
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Joe Moore
Rental Property Investor · Los Angeles, CA · Member since 2010 · 804 posts · 230 votes
9y
@Abdul Azeez
I am happy that you got the place rented. The $995 that we discussed was a key as well as changing management companies. Congrats! OOS investing can be done successfully because I know from my own personal experience. I will also have to say that I had to go through one heck of a learning curve. The thing that let me survive was I paid cash for my properties. Don't be fooled, you can be successfully with OOS properties. You will definitely need a ground crew and the members of that crew will change with time. Also though you aren't managing the properties, you will still have to manage the manager. In the beginning, it is in your best interest to self manage, which will give a much chance to be successfully. It will show you what it take to manage a property successfully. If you want a true passive investment, you need to consider buying notes, tax liens, joining a reit or becoming a lender, or join a crowdfunding platform. All are still REI, but a lot less time consuming and stressful. You won't have deal with daily management of your investment. I am wishing you the best in your real estate journey.
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David B.
Investor · Worcester County, MA · Member since 2016 · 122 posts · 72 votes
9y
@Abdul Azeez
I think your numbers look decent: $995 rent on a $84K purchase, in a solid neighborhood (38125 is good zip code). Most turnkey providers are selling houses right around 1% of purchase price, so you are doing a little better, And, I think you have low taxes (no city) there.
I am sure the locals can get better deals for themselves, but for an OOS investor, I think it looks good.
Realize that luck can play a part in this. What I mean is that you can get a bad tenant or have some other bad luck, and this may not be the PMs fault. I think it is hard to tell sometimes whether it's luck or some other controllable issue that causes problems. I have certainly had some issues with one of my properties and I think it is probably just bad luck, but more time will tell.
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Xiao Xiao
Member since 2019 · 12 posts · 1 vote
7y
@Abdul Azeez Hi Abdul, now two years later how has the experience been so far? I've read through the thread and I think it's a good one, curious about how it went later. If it went well (as I wish), have you been expanding in Memphis?
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