Memphis, Tennessee ranks as one of the most affordable and profitable real estate markets in the United States. Its low cost of living, business-friendly environment, and strong rental demand draw both seasoned and new investors.
Exploring Market Trends
Memphis offers consistent stability in its real estate market. Home values continue to appreciate steadily, while major employers like FedEx and the healthcare industry fuel job growth and sustain housing demand.
Exploring Neighborhoods
- Downtown Memphis – Ideal for short-term rentals and property appreciation.
- Midtown Memphis – Combines historic charm with modern living, attracting strong rental interest.
- East Memphis – Appeals to families and maintains high rental occupancy rates.
Average Housing Cost
Homebuyers in Memphis pay a median price of around $200,000—far below the national average. Investors often find rental properties for even less, which helps them achieve positive cash flow more easily.
Tax Deductions for Investors
Memphis real estate investors enjoy several tax advantages, including:
- Mortgage Interest Deduction – You can deduct the interest paid on investment property loans.
- Depreciation Deduction – You can depreciate investment properties over 27.5 years.
- Property Tax Deduction – Tennessee allows property tax deductions.
- Repairs and Operating Expenses – You can deduct costs such as lawn care, utilities, insurance, and HOA fees.
- Pass-Through Deduction – If you qualify under the IRS’s QBI rule, you can deduct up to 20% of your net rental income.
- No State Income Tax – Tennessee does not charge state income tax, making it even more appealing to investors.
Unemployment Rate
Memphis continues to reduce its unemployment rate, which currently hovers around 4.5%. Key sectors such as logistics, healthcare, and manufacturing drive this positive trend.
Median Rental Price
Renters in Memphis pay a median monthly rent of approximately $1,200. This strong rental income potential makes Memphis a hotspot for cash flow-focused investors.
