Familiarizing yourself with Tennessee’s landscape and neighborhoods is essential before settling into a home. Often it’s challenging to determine where to call home; therefore, turn to real estate agents in Knoxville, TN, to guide you on your home search.
Tennessee is known for its music, picturesque scenery, and southern charm. With the Appalachian Mountains, rushing rivers, and many renowned universities, Tennessee is a popular place to live and one of the best states for profitable real estate investments. Real estate investors are drawn to Tennessee’s low tax rates, relatively affordable home prices, and robust job market. In addition, the state’s housing market is projected to grow by 26%, ahead of the national average of 21%. To find the best markets in the state, the five most populous areas were evaluated based on four essential points that were considered.
- Economic growth
- Current investment potential
- Current rental value
- Surrounding infrastructure
If you are looking to make a move, the real estate professionals of Tennessee can help you navigate the real estate process. An excellent real estate agent can help you find promising properties and determine which parts of Tennessee best suit your goals.
Best place to rent a property in Tennessee: Memphis
Population: 639,000. Known for its rich and diverse cultural heritage, Memphis is Tennessee’s number one rental market. The median home value of $146,000, is well below the median home value of $282,000, making the area more accessible to a broader range of potential investors. The housing market is also growing by an impressive 23% since 2021 and 104% since 2015. At $950, the average monthly rent for a two-bedroom apartment is the lowest of any city on this list. Its diverse music scene and attractions make Memphis a worthwhile financial investment. The town center is thriving, and along the Mississippi River, you can experience fine dining options, including famous themed barbecue joints. Major employers such as FedEx, Kroger, and Wal-Mart provide jobs to residents and keep the city’s economy growing.
Best place to rent a property in Tennessee: Nashville
Population: 671,000. Nashville attracted more than 16 million tourists in 2019 and showed no signs of slowing down. Known as the “Music City,” Nashville is home to two professional sports teams, vibrant restaurants, and endless nightlife. These are just a few key factors that make Nashville an attractive real estate investment opportunity as one of the best places to buy rental properties. Property prices in the region have recently skyrocketed by nearly 30% since 2021 and 117% since 2015. With the median home price now hovering around $428,000, it takes more work for investors to find deals at the current market price. However, the potential rental income remains high, with rents of $1,777 per month for a two-bedroom apartment and $4,745 per month for a short-term rental.
Nashville has the highest livability among the top five cities on this list. You’d be hard-pressed to find any other city that balances the growth potential, high rents, and the abundance of architectural landmarks and vibrant business activity in the city. The economy is dominated by tourism and recreation, but the healthcare, automotive, education, and financial sectors offer plenty of growth opportunities. If you’re ready to invest in rental property, it will help if you familiarize yourself with the most accurate data on the real estate, have contacts that lead directly to the owner, and know the current condition of the real estate you have chosen.
Best place to rent a property in Tennessee: Chattanooga
Population: 196,000. Chattanooga is the fourth most populous city in Tennessee. Thanks to a new high-speed network and growing technology, it is the number one city in the country for telecommuting. The real estate rental potential here is at a high level. The median home value of $263,000 is lower than the state median home value, allowing for rent cheaper than in other parts of the state. The housing market also shows significant expansion, with home values growing by approximately 25% since 2021 and 95% since 2015. Long-term rent of one-room apartments costs an average of $1,326, and short-term rent – is $2,922 per month. Rental income is further boosted by the growth of tech startups and the economic sectors booming here, such as healthcare, manufacturing, oil, and gas. All these critical aspects create an attractive opportunity to receive significant income from real estate investments in an actively growing market.
Best place to rent a property in Tennessee: Knoxville
Population: 390,000. Home to the University of Tennessee, Knoxville has stunning scenery and fascinating history. In 1982, the World’s Fair was held in Knoxville. The fair catalyzed economic recovery, making Knoxville an attractive market for rental properties and various investment strategies. The city is home to the state’s flagship university. The population is younger than the rest of the state, with a median age of 32.7 years. The rental market in the area is stable, with a two-bedroom apartment going for an average of $1,327 per month. Income from short-term rentals, such as Airbnb properties, averaged $2,540 per month. Home prices have also risen, up 28% since 2021 and 94% since 2015, with the median home purchase price reaching $307,000. Important sectors of the economy are transportation, retail, education, and restaurants. These factors make real estate investment opportunities unique, diverse, and attractive.
Best place to rent a property in Tennessee: Clarksville
Population: 178,000. Clarksville is one of Tennessee’s oldest cities, dating back to 1784. It was named after George Rogers Clark, of the same Clark family, who was sent with Merriweather Lewis to explore the lands west of the Mississippi. Housing costs align with the rest of the state, averaging $280,000. Home prices are also rising, but slower than in some other cities in the state. Income from a rental property is about $1,980 per month. These numbers are significant, but the real secret to rental investment opportunities is the high quality of life. The city was recently listed as one of the 100 best places to live. Affordable housing, abundant recreational opportunities, a strong job market, and economic stability create an environment where rental properties can grow rapidly and aggressively.
Best place to rent a property in Tennessee: Gatlinburg
Additionally, small Gatlinburg, with a population of 4,004 people, can be considered for real estate investment. A true resort in the heart of the mountains, the region is home to the vast Great Smoky Mountain National Park, which covers more than 520,000 acres. As you can imagine, tourism is a large part of the economy here, with plenty of opportunities for shopping, dining, hiking, and sightseeing. With a small local population and limited long-term rental options, Gatlinburg stands out as one of the state’s top cities for Airbnb investment. Today, the median home price is $552,000, so the monthly income for short-term renters is impressive. Airbnb’s typical monthly payment is $5,226, the highest on this list.
Being just an hour’s drive from Knoxville, escaping the city, and enjoying spectacular nature makes Gatlinburg especially attractive to short-term renters. The housing market has grown significantly, but data shows that short-term rentals continue to grow strongly alongside rising home prices.
Profitability of Rental Properties in Tennessee
Tennessee offers many profitable real estate investment opportunities. Memphis is the best place to buy rental properties in Tennessee, followed by Nashville and Chattanooga. Learn about population growth, job opportunities, and home price growth before choosing where to invest in real estate. Rental property is often considered a good investment. Its success or failure also depends on local market conditions and your chosen business strategy.
Before you buy a rental home in Tennessee, learn how to find attractive investment opportunities and save time, energy, and money. A detailed inspection of the selected investment property in Tennessee and a review of the condition of communications with the help of experienced specialists are essential.