Memphis Market

Memphis is one of the most undervalued markets throughout all of the country. Knowing that over 45% of the population rents, the city has become an attractive destination for investors seeking stable appreciation with positive cash flow. With the tremendous tax advantages associated with real estate, the opportunity Memphis has to offer is second to none. The main difference between the Memphis real estate market and other cities across the country is that here in Memphis you can buy a property in the $50,000 range that will rent for $1,000 per month and appraise for $90,000. Not only does this mean positive cash flow, but it also shows the tremendous opportunity the Memphis real estate investing market has to offer.

The following are from the Urban Land Institute’s presentation of Emerging Trends for Real Estate in 2009 here in Memphis, which pointed out several facts Memphis Invest has known about the residential investment market in Memphis and real estate investors for several years.

  • Memphis continues on a steady growth cycle in both job creation, new development and property value. The metropolitan area does not take wild rises or dips in these areas – just fairly steady growth and slight dips.

  • Memphis is home to some of the country´s great corporations including, Federal Express, Autozone, Medtronic and International Paper. It´s central location also makes Memphis a great business hub for many small to medium sized companies. It´s easy access to rail lines, ports and world class airport make it the distribution capital of the country which means a continued supply of quality jobs.

  • Memphis ranks as one of the top “affordable” cities to live in in the country with the suburb of Bartlett, TN. recently being ranked as one of the top 100 suburbs in America. The cost of housing ranks among the most affordable in the nation and well below national average.

  • Vacancy rates continue to stay below the national average, while the percentage of Memphians renting their dwelling continues to eclipse the national average by almost 90%. With over 45% of the cities population renting, the opportunity to keep an investment property occupied with a quality tenant remains high.

  • Top 10 of 50 best major metro areas for starting or growing a business – Inc Magazine

  • #16 of “America’s Top 50 Hottest Cities” – Expansion Management Magazine

  • Top Ten Hottest US Markets for Mortgage Lenders – Mortgage Bankers Association

  • Top Ten Cities to Invest in Real Estate – Business 2.0

  • One of Five Great Places to Retire – AARP

  • #1 on Home affordable housing for retires – CNN Money Magazine

  • 2nd Most Undervalued Market in the Nation with 20% of houses selling for less than their fair market value and Houses in Memphis selling for 28% less than the national – Richard Dekaser, National City Corp.

  • 17th Largest City in United States

  • 1.2 million residents in Metro Area

  • 680,000 Residents in Memphis

  • Home to busiest cargo airport in the world

  • FedEx Global World Hub – 30,000 employees

  • 3rd largest railroad center in U.S.

  • More trucking companies based here than anywhere in the Nation

  • One of only 4 major cities the new I-69 Interstate (Canada to Mexico) will pass through

  • Major shipping port for barge traffic

  • Continued Expansion of Memphis as a Major Medical HUB for U.S.

    • St. Jude Children’s Research Center,

    • UT Medical SchoolLeBohneur Children’s Hospital,

    • Methodist University Hospital,

    • Memphis Biotech Research Park – Currently under construction

    • MedTech Headquarters & Research facility

  • Overall cost of living is 10% below the national average

  • No state income tax

  • 45% of the population rents compared to the national average – of 28%

  • 5 Year appreciation 18.76%

  • No major swings in pricing Up or Down

  • 9th most foreclosures with 1 in 49 homes foreclosing – Realty Trac

The single biggest piece of information to come from the ULI´s presentation pertained to the way investors conduct their business in today´s market. It was clear that they wanted investors to know it was time to get back to basics and do business with proven companies. Building a strong team of advisors and companies to work with will be key in the coming years. Surrounding yourself with proven companies who have a history of success is paramount to the success of the individual investor.