TN rental properties - worth it?

11 Replies

Hi Guys,  i see a lot of properties available for investment in and around Memphis TN area. Does anyone owns rentals there?  are the laws favorable towards landlords? (tax, hassle like business licenses, building codes etc) ? or is it going to turn in to a nightmare for an out of state land lord?

@Leon Kanon   Memphis is a major player in the single family rental market for good reason. You'll find high rental rates relative to the acquisition price and favorable landlord laws here. I've personally evicted a tenant and gone through the bankruptcy courts when a tenant who I was evicting filed bankruptcy. The eviction cost less than $200 and the tenant will be out in less than two months; very easy and straight forward process. Usually the tenant doesn't show up and you get a default judgment. 

If you do your due diligence when placing a tenant then you likely won't have an eviction in the first place. (My eviction was a tenant that was in the property when I bought the place)

Let me know if you have any specific questions,

Jack

@Jack Inman ,
it looks like  TN is more and more attractice for low prices real estate as from what ive see it has the bigger cash on cash value, thats what kind of made me suspicuous if there is a catch  in buying a $30k property with  $650 rent. Thought the areas in total are bad or just bad investments in general.
Thanks for your help, i might be looking for a good PM and an agent in that area in few months to start investing.


Originally posted by @Jack Inman:

@Leon Kanon  Memphis is a major player in the single family rental market for good reason. You'll find high rental rates relative to the acquisition price and favorable landlord laws here. I've personally evicted a tenant and gone through the bankruptcy courts when a tenant who I was evicting filed bankruptcy. The eviction cost less than $200 and the tenant will be out in less than two months; very easy and straight forward process. Usually the tenant doesn't show up and you get a default judgment. 

If you do your due diligence when placing a tenant then you likely won't have an eviction in the first place. (My eviction was a tenant that was in the property when I bought the place)

Let me know if you have any specific questions,

Jack

@Leon Kanon I’m an out of state landlord in Memphis. I’m also in Cleveland. I prefer Memphis.

There’s s great investor infrastructure there for out of town landlords. You can routinely find 45-60k property’s that rent for 800-900.

A couple weeks ago I needed to appeal property taxes. Came on BP. Had it done a day later off a recommendation I found here. That’ll be a lot harder in other markets.

I plan to buy a lot and often there going forward.

If you need a local realtor I’d recommend @Jack Inman . He’s been super helpful for me

Do you guys know if its a good bet to count on Section 8 for lower-income areas (20-35k real estate)  or better to invest in to 40-60k turnkeys?   If there any paperwork involved usually in making the house rental ready and registering it anywhere for inspection with the city ?

@Leon Kanon I have been told by a local to Memphis real estate agent who sells 30 properties a month and works for a company that manages around 4000 properties there to avoid section 8 in Memphis.

If that’s not a credible source I’m not sure what is

Thanks Caleb....  

@Jack Inman  if you dont mind i will add you to my contacts,  that way once i am ready (just need to find enough private financing) and do some numbers, we should talk :)

Hey, Memphis is a great market to invest in. As a local who owns here I would recommend that you stay clear of the lower end stuff. While it can look enticing (on paper) those returns are rarely ever realized. I know local investors here that specialize in these areas and do well but it is management intense and they are here to keep a watchful eye on their properties. If you are going to invest from out of state make sure and build your team first. Property management, real estate attorney, home inspector, real estate agent etc. Just my 2!

Memphis can be a tough market for out of state.  Finding great property management is the biggest hurdle. And the returns on paper are never what actually happens but it can be a good market with really good management.

@ Dean   I heard good things about Memphis Investment as a PM,  Do  you guys offer only PM  services?
I am thinking about surrounding myself with a team i can trust most definetly as i prefer to work remotely and if i find people that i trust thats the team i will be working with in that area.

Originally posted by @Dean Letfus :

Memphis can be a tough market for out of state.  Finding great property management is the biggest hurdle. And the returns on paper are never what actually happens but it can be a good market with really good management.

You may mean memphis Invest @Leon Kanon . As far as I know they only manage what they sell.   I've stopped recommending companies publicly as they end up becoming bad as they get too busy. PM me I can give you some companies I like to work with in the PM space.

Hello @Leon Kanon , welcome to Memphis!
I own 36 properties in Memphis TN and Desoto county MS. We flip and rent a lot of properties around.
Taxes - In Memphis the taxes sometime can kill the deal, but most of the taxes per property are not as high.
You can take a look at property taxes here: http://www.assessor.shelby.tn.us/content.aspx?key=...

As far as building codes - If you have licensed contractor it's fairly cheap, easy and fast in Memphis. But you need someone to take care of you there.

Let me know if I can help