We are talking about what we see for the Memphis market for the end of this year and into 2016. At CrestCore Realty, we see three specific trends that property investors can appreciate and take advantage of.
Rent to Price Ratio
Just this last week, Bigger Pockets, which is the largest social networking real estate investing site in the world, voted Memphis as the number one rent to price market in the United States. That means for the dollar amount you earn in rent versus the purchase price of your house, the greatest advantages are found in the Memphis market. The $700 you collect in rent compared to the purchase price of your home gives you a greater return. Pound for pound, this is the best place to invest.
Relating to the rent and price ratio is the current condition of the mortgage market. People with marginal credit or even good credit are still having trouble getting mortgages, due to the strict lending standards. That means a lot of people are not able to buy just yet, so they’re renting for longer periods of time. This demand in the rental market drives up rental prices, and keeps the sales prices lower. That contributes to the rent to price ratio staying really high.
Another trend that we have noticed, which we expect will continue into next year is that Memphis is an international market. There are thousands of out of town investors and owners in Memphis, and many of them are from international locations.
These are just three trends we see in the Memphis rental market. If you’d like to talk more about what you can expect, please contact us at CrestCore Realty, and we’d be happy to help you.