Buying a Rental property, Memphis TN or North MS ?

[lamachin007]

Hello

1-In Regards to buying a Rental property,  Memphis TN or North MS ?

2-Which zip code would you recommend and why ?

3-Any specific zip codes where there is a good rental market ? What's should be the price range ?

I am thinking about buying a 3/2 or 2/2 for around 200 K .

Thank you !

[dummy]

I have no idea of the markets in the areas.

I would check the local available rentals and see what they are asking for and actually getting. Zillow, apartment finders, Craigslist’s, etc. then make my decision.

[Papa bear]

Yeah this is pretty specific.  Unless someone is in one of those markets, no one can give you a good response. 

Now, if you come across a specific property, and want the Internet minds to evaluate it, go right ahead! We all typically rely on the OP to have the local inside knowledge and expertise though. We have no idea if a property is in an A, B, or C location, what the trends have been, or what local events are happening, such as a large employer expanding or contracting. 


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[daverobev]

Try biggerpockets.

[kenmoremmm]

sounds like turnkey properties through one of the 3(+?) companies in town. when i ran the numbers, the MS properties came out worse across the board. but, memphis is kind of an s-hole, so maybe that's not captured in the true numbers.

[ChpBstrd]

Why would you spend $200k on a SFH in this market? You should expect a fourplex or at least a high end duplex for that money.

[Fire2029]

Why would you spend $200k on a SFH in this market? You should expect a fourplex or at least a high end duplex for that money.

Memphis is very neighborhood dependent. Within the same zip code you Han have $50k houses and $200k houses. Would really need to see what they are looking at. In the $1500 to $2000 rent range you will generally have a better class of tenant, so you are taking a lower return for less trouble. Lower risk, lower return, but lower headache.

In north MS for 200k you should have a good family home with attractive de Soto county schools.

Memphis isn’t really a multi family market. The duplexes and fourplexes that are available aren’t in class A or B areas, and the glut of SFRs means they rent for less against the competition. If you want to go multi family in Memphis effectively you want more doors in the right neighborhood. The only place where duplex and four Plex are really effective are near the UofM, but you have to know the area to know where students consider “nearby”. It can look close on a map and be a whole different world.

[ChpBstrd]

Why would you spend $200k on a SFH in this market? You should expect a fourplex or at least a high end duplex for that money.

Memphis is very neighborhood dependent. Within the same zip code you Han have $50k houses and $200k houses. Would really need to see what they are looking at. In the $1500 to $2000 rent range you will generally have a better class of tenant, so you are taking a lower return for less trouble. Lower risk, lower return, but lower headache.

In north MS for 200k you should have a good family home with attractive de Soto county schools.

Memphis isn’t really a multi family market. The duplexes and fourplexes that are available aren’t in class A or B areas, and the glut of SFRs means they rent for less against the competition. If you want to go multi family in Memphis effectively you want more doors in the right neighborhood. The only place where duplex and four Plex are really effective are near the UofM, but you have to know the area to know where students consider “nearby”. It can look close on a map and be a whole different world.

I guess if one wants a low headache factor, investing at the high end of the market makes sense. From a financial point of view, however, I'd be wary about going lower than the 1% rule. Memphis is not the West Coast, and appreciation will not make up for missed cash returns. In fact, depreciation is the norm in these LCOL areas. If I did the spreadsheet in the sticky at the top of the real estate category on this forum, and my ROE was 4-5%, I'd just get an REIT and save all the headaches.

[lamachin007]

Thank you everyone, I think am putting the breakes on for now, I noticed that it is a sellers market in  Memphis and North MS at this point and things area getting really shaky in the economy due to the corona virus.

[Fire2029]

Inventory will go back on the market in May when families with kids start moving.