Best Cities for Investing in Tennessee Real Estate

This is a complete analysis on the best cities for real estate investing in Tennessee.

Backed by data with sources.

Learn where to buy the most profitable investment properties, short term rentals and flip homes.

Let’s jump right in:

Best Cities in Tennessee for Investing

When considering opportunities in real estate investment markets, savvy real estate investors have noticed the recent popularity of Tennessee. Boasting a diverse array of urban hubs and charming communities, this state offers a blend of affordability, growth potential, and a robust rental property market.

Knoxville

There are a number of reasons why the Knoxville real estate market is such a desirable destination for Tennessee real estate investors. Knoxville is the third-largest city in the state, and its population growth has only made the housing market all the more competitive.

One of the most compelling reasons to invest in Knoxville real estate is the diversity of properties available. From trendy Downtown lofts to historic homes, the city offers a wide range of rental investment property.

The prime location of Knoxville real estate adds to the appeal of the city. Located just a few hours from both Nashville and Memphis, two of Tennessee’s largest cities, Knoxville boasts proximity to major economic hubs and transportation networks. This strategic location not only enhances the city’s accessibility but also contributes to the overall attractiveness to potential residents as well as investors.

1 bedroom rent: $1,344 (+12% YoY)
Median days on the market: 50
Median home price: $330,000 (+21.3%)
Homes sold above list: 26.1%
Rental market data | Housing market data

Nashville

Nashville is home to one of the hottest real estate investment markets in Tennessee. The city stands out as one of America’s fastest-growing cities. Experiencing a remarkable surge in population over the recent years. This population growth not only reflects the city’s appeal to newcomers but also creates a large tenant pool for potential real estate investors.

With more people seeking housing options, there’s a consistent demand for rental properties. Real estate investors are in turn provided with stable sources of income and the potential for long-term appreciation on their investment properties. The economic strength of Nashville further bolsters its appeal in the rental market.

The well-known “Music City” boasts a thriving tourism industry, contributing to its robust and resilient economy. As a result, Nashville offers a fertile environment for business growth and innovation, attracting both established companies and startups alike. This economic vibrancy translates to a wealth of job opportunities. Which in turn fuels the demand for housing and does wonders for property values.

1 bedroom rent: $1,791 (-14% YoY)
Median days on the market: 67
Median home price: $440,210 (+5.1%)
Homes sold above list: 14.5%
Rental market data | Housing market data

Memphis

Job growth and development play a pivotal role in driving demand for the Memphis real estate market. The city’s ideal location makes it an attractive hub for businesses looking to save on shipping costs and streamline distribution operations.

Major corporations such as Nike, International Paper, FedEx, and Amazon have established significant presence in Memphis. This creates a thriving local economy and drives demand for housing. The influx of employment opportunities contributes to a steady demand for rental properties, both long-term and short-term.

Memphis also offers high affordability for real estate investors, with relatively low property taxes compared to other cities. The city’s low vacancy rates are on par with the national average. The robust job market coupled with affordable housing costs and high demand ensures that rental properties remains consistently occupied. Minimizing vacancy risks for investors and providing a steady income stream.

1 bedroom rent: $1,075 (+12% YoY)
Median days on the market: 51
Median home price: $169,950 (+6.2%)
Homes sold above list: 11.6%
Rental market data | Housing market data

Chattanooga

Chattanooga offers median home prices that are right on the line with the national average. Providing investors with low entry points into the real estate investment markets. This affordability enables a broader range of investors to participate in real estate opportunities. Fostering more inclusive and dynamic real estate markets.

The price-to-rent ratios and above-average real estate appreciation in Chattanooga provide yet another enticing opportunity for rental property investors. The city’s supportive regulatory framework and pro-business policies create a conducive environment for property investment and entrepreneurship. Fostering a thriving real estate market ecosystem.

Real estate investors in Chattanooga favor long-term rental property over short-term flips due to higher acquisition costs and lower profit margins associated with flipping. This shift in investor preferences toward buy-and-hold assets underscores the city’s reputation as a stable and reliable market.
1 bedroom rent: $1,387 (+4% YoY)
Median days on the market: 51
Median home price: $310,000 (+6.9%)
Homes sold above list: 33.3%
Rental market data | Housing market data

Johnson City

Johnson City has become increasingly popular over recent years. One key advantage of investing in this Tennessee city is that both novice and seasoned investors can benefit. Johnson City has been recognized as one of the more affordable places to live in Tennessee.

Making it an attractive option for individuals and families seeking affordable rental markets. This growing demand combined with affordability presents a wealth of investment opportunities for those looking to get into residential real estate investments.

The availability of Johnson City foreclosed properties at prices well below the local median sale price adds to the competitive market. These foreclosure listings present investors with the chance to acquire properties at discounted rates. Potentially yielding higher returns on investment through fix and flipping or long-term rental income.

1 bedroom rent: $845 (+4% YoY)
Median days on the market: 50
Median home price: $249,950 (+2.6%)
Homes sold above list: 20.4%
Rental market data | Housing market data

Is Tennessee good for real estate investing?

Georgia is a thriving state that boasts a rich history and bright future with the past few years confirming the Tennessee presents a compelling case for real estate investing. Boasting some of the hottest real estate markets in the country as well as the fastest-growing local economies. The Volunteer State offers ample opportunity for investors to get involved in some of the most coveted real estate markets around.

With a median rent of about $1,735 per month, investors can make an excellent passive income, if they make a good investment. Tennessee can offer promising possibilities for real estate investors, but as always, thorough research and due diligence are crucial to success.

5 Best Cities in Tennessee to Fix and Flip Properties

A growing trend in real estate investment over the years has been to fix and flip properties. A strategy where an investor purchases a property, typically one that needs repairs or renovations, with the intention of improving its condition and selling it for a profit. The process involves several key steps:

1. Assessment and Planning
2. Rental Property Financing
3. Property Acquisition
4. Renovation
5. Listing and Selling
6. Closing
7. Profit Calculation

Best Cities to Fix and Flip in Tennessee

While a little more time-consuming and risky, the benefits of flipping houses in Tennessee can be quite lucrative! Several cities offer a real estate market that is brimming with investment opportunities when it comes to fixing and flipping:

• Knoxville
• Nashville
• Murfreesboro
• Memphis
• Chattanooga

These cities all boast a strong job market, higher-than-average rent statistics, and ever-increasing home values. This combination creates the perfect formula for a successful renovation endeavor.

5 Best Cities in Tennessee for Rental Properties

Looking to invest in rental properties in Tennessee? Understanding local trends and median rents is crucial to achieving your investment goals. Here are 5 of the best cities in Tennessee for rental property investing:

Memphis – Memphis’ rental real estate market offers diverse opportunities for investors due to the city’s affordable prices, strong rental demand, and vibrant cultural scene. Attracting students, professionals, and families seeking accommodations and promising cash flow opportunities.

Nashville – The Country Music Capital is a thriving rental market in Tennessee. Boasting diverse housing options, strong rental demand, and urban revitalization. Making it attractive for investors seeking opportunities in this emerging market. Which offers the best of Tennessee living to both tenants and landlords.

Knoxville – Knoxville offers real estate investors a favorable regulatory environment with low property taxes and landlord-friendly laws. Ongoing development projects, including infrastructure upgrades and neighborhood rejuvenation, present opportunities for value appreciation. Particularly in areas undergoing redevelopment.

Chattanooga – Chattanooga’s rental real estate market ranks highly in Tennessee real estate, fueled by a significant portion of the population favoring renting. Factors such as young professionals, students, and job relocations drive demand. While diverse neighborhoods provide ample investment opportunities. Whether in vacation rentals or long-term options.

Clarksville – Clarksville’s housing demand is driven by population growth and its proximity to Fort Campbell military base. Sparking increased construction activity in residential properties, from single-family homes to apartment complexes,. Obviously heating up the market. Alongside population growth, commercial expansion presents opportunities for investors in ventures such as retail spaces and office buildings. Capitalizing on the city’s expanding market.

Conclusion

While these are the best cities for investing in Tennessee, it doesn’t mean you won’t find great deals elsewhere. Many other cities in TN have lots of distressed properties to fix and flip or rent out. If you’re interested in buying a property and need a 30 year rental loan or fix and flip financing, contact us to get started.

Data updated February 16, 2024