Memphis Real Estate Investing

Property management is often the biggest concern of many real estate investors when buying rental property in Memphis. Over 50% of the real estate investors that buy investment property from us live outside the Memphis area. We understand these concerns. Robert Feol and Ryan Hinricher worked in the past for a property management company both as rental agents and as business consultants after they left their stand as property managers. Essentially with the past experience in renting property and us owning real estate investment property in the Memphis market, our team understands the importance of having strong management choices available.

Some of the following are common questions that real estate investors have when considering purchasing investment property.

This depends on many factors, including where you purchase, quality of rehab and renovation, curb appeal, pricing, etc. First and foremost is knowing the neighborhoods within the city. Since the vast majority of the rental market is within the city limits of Memphis, it is important that you consider what neighborhoods you are buying in. Is the neighborhood safe? Is it near schools? Is there adequate access to employment? What are vacancy rates in the neighborhood? Is it a sought after area? How about optional or magnet schools? Is the neighborhood improving in value? What trends can you capitalize on? Because all of these questions require much research it is imperative to have a team in place that knows the answers.

How about the quality of the renovation? This can be a big factor. The focus we implement is ensuring properties are at least as good in quality to the average rental in the neighborhood or better. It is unlikely you will benefit from the installation of granite counter tops or solid gold fixtures in your Memphis investment property, however the home needs to be commensurate with rental rates and other homes in the neighborhood.

Pricing is another important factor to consider. The homes need to be priced within a $100 range of the neighborhood average. For example if homes are renting around $750 in a neighborhood. The range we have on our properties is $700-800 per month.

The other factors school zones and crime are important. We can tell you about all the mistakes we made investing in the wrong areas of town but it is important to note that the areas must be safe. They must be areas that people want to live in.

With these things said, when you invest in Memphis, your property should rent in 0-60 days, probably closer to 0-45 days. This is after any work is complete of course.

The fees typically range between 7-10% with the companies we use. Although some companies in Memphis charge up to 15%. Be careful though, make sure you are accounting for any hidden fees. Example what about security deposits? Some companies will keep these and charge you very little to rent the house. While others charge you 1/2 the first month's rent and you keep the deposit in an escrow account of course. Maintenance fees typically run 10% over what the management company was billed to send the repair technician to the property.

Most management companies we use will typically just put the sign in the yard. The rental market is such that this is the normal method of advertising. Sometimes ads will be used in the newspaper or on radio stations but it is rare. The market is strong enough that spending tons of money on advertising is not necessary.