7 Things You Should Know Before Investing in Tennessee Real Estate

By
Mortgage and Lending with Olympus Labs

The real estate market is hot. It has been since mid-2020, and it doesn't show any signs of slowing down.

Home prices are rising and they're flying off the market fast. Many investors are choosing to sit on the sidelines during this part of the real estate cycle.

But you shouldn't. Regardless of what the market is doing, there are real estate deals available for those looking to work hard.

Where are the best places to invest in 2022? Turn your attention inland. Tennessee real estate is a gold mine right now, as out-of-staters are flooding this southern state. 

But before you go making offers on properties without even looking at them, there are a few things to know about real estate in Tennessee. Keep reading for seven tips that will help you avoid making mistakes when investing here for the first time. 

1. Nashville Is Still Hot

Nashville has blown up in recent years. Residential and commercial investors have been pouring money into the city, as people from all over the country have been moving here in droves.

For the past few years, cranes can be seen along the cities skyline, with no signs of finishing up.

Many of the surrounding neighborhoods, such as East Nashville and Germantown, have already been completely redone. For residential investors looking for individual homes to buy, it's nearly impossible anywhere near the city center.

Most of the opportunity right now is going into skyrise condos and apartments.

And this is pushing much of the working class out to the surrounding suburbs. Many of the cities workers are having to commute upwards of 30 minutes to get into the city.

So if you want to take advantage of the Nashville market without paying Nashville prices, look on the outskirts, in places like Brentwood and Nolensville. 

2. Population Growth in Tennessee

Tennessee's population has grown by almost 9% in the last year. And a large number of these transplants are looking to live in and around Nashville. 

Nashville-Davidson County increased its population by as much as 15% recently. Other middle-Tennessee counties are seeing equal amounts of growth.

Western Tennessee has seen more people moving out than moving in. But a few other counties and cities, other Nashville, are getting some of this growth as well.

Knox County, which includes the city of Knoxville, is experiencing above-average growth. Hamilton County in the Southeast corner of the state includes Chattanooga and matched the state's average growth rate of around 8%. 

Areas near the Smoky Mountains have generally seen population growth as well. With more people able to work remotely, they can leave the bigger cities and get closer to nature. 

Investing in Tennessee real estate doesn't mean you have to buy in Nashville. In fact, some of these other cities are likely to become the next Nashville, as there is only so much room for Nashville to grow. 

3. Tennessee Job Growth

People are moving to Tennessee largely thanks to job opportunities. Nashville is a healthcare hub, drawing in nurses, doctors, and specialists from around the country. 

And with Vanderbilt University right downtown, many graduates just stay in Nashville after school to practice their healthcare profession. 

Startups are becoming more and more common in the Nashville area, becoming an entrepreneurial hub in the South. Both big and small businesses are doing very well in the area, creating jobs of all types.

The music, entertainment, and restaurant industry are also massive in the city, drawing countless people, both with and without college degrees, to work in the area.

Memphis and the surrounding communities are also attracting workers, with major corporations calling the greater Memphis area home. This is due to Memphis being a transportation hub in the state. 

Franklin, just south of Nashville, is home to many large corporations, including the North American headquarters of Nissan. 

4. Know Tennessee Management Laws

One of the first things you need to do when buying property in Tennessee is research local laws. Landlord laws can vary from state to state, and it's your job to understand these, whether you are hiring a property management company or not. 

For example, in Tennessee, the law requires individuals to provide at least a 30-day notice before they can break a contract. That means a tenant breaking their lease, or you deciding to sell before the lease is up. And you have 30 days to return the security deposit after the lease expires. 

If you want advice about the local laws, and how to set up a proper lease agreement in the state, contact property management companies in the areas you plan to invest. They will know the types of tenants in the area, and how to best create a fair contract for both parties. 

5. Try Chattanooga

Chattanooga is the place for the outdoorsy. And outdoorsy people tend to rent.

The city is surrounded by mountains and offers plenty of opportunities for rock climbing, cycling, and hiking. It's also near the Appalachians and the Smoky Mountains. 

It's a hidden gem in the Tennessee real estate market. Prices are still low, but demand is high in this outdoor hub. Oh, and it's the craft beer capital of the South. 

6. Consider Knoxville

Most people overlook Knoxville. But as an investor, it might be your next gold mine. The city is home to the University of Tennessee, with more than 20,000 students present each year. 

And it's not just a party town either. Plenty of people love the city enough to retire here, providing a wide range of renters. In fact, Tellico Lake, just south of Knoxville, is a premiere 55 and older community in Tennessee.

7. Check out Germantown

No, not the trendy neighborhood in Nashville. Germantown is a small suburb just outside of Memphis. It's a nice area, and many residents commute the short distance to downtown Memphis for work.

You'll find high-quality, hard-working tenants in this town, making this one of the best places to buy Tennessee real estate property.

Make the Most of Tennessee Real Estate

The best place to invest in is the market you live in. It's the easiest to understand and the easiest to manage.

The second place to invest? Many people would say Tennessee real estate is the best option right now. And that's unlikely to change for at least a few more years.

Looking for more investment tips and tricks? Head over to our blog to find other helpful articles. 

Comments (1)

Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Great information.  Thanks for sharing and have a wonderful day!

Jan 22, 2022 06:38 AM