Invest in Airbnb Memphis Real Estate in These 3 Neighborhoods

If you’re looking to invest in the Tennessee real estate market, start your search with Memphis real estate. Find out exactly which neighborhoods are best for Airbnb Memphis real estate.

Memphis, TN is considered the second largest metro area in its region. Having developed into a suburban city of homes below the national average, buying a property for Airbnb investing is a great way to invest in Memphis real estate. It also definitely doesn’t hurt knowing that Memphis has more renters than homeowners.

For the Memphis real estate investors looking to make some serious cash flow with short term rentals, knowing which neighborhoods hold these profitable investments is key. So let’s get straight into. Here are the best neighborhoods in Memphis for Airbnb real estate.

3 Best Neighborhoods for Airbnb Memphis Real Estate Investing

Mashvisor has summarized the performance of the Memphis real estate market to narrow down the best neighborhoods for Airbnb Memphis. The three neighborhoods we’ll be mentioning are considered the best based on how they ranked in regards to key return on investments metrics.

Mashvisor’s tools have collected and calculated data from reliable sources to come to this conclusion. The following data is provided by Mashvisor’s investment property calculator.

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1. River Oaks-Kirby-Balmoral

Median Property Price: $476,387
Price per Sq/Ft: $127
Monthly Airbnb Rental Income: $2,939
Average Airbnb Cap Rate: 5.61%
Average Airbnb Cash on Cash Return: 5.61%
Airbnb Occupancy Rate: 82.25%

The neighborhood of River Oaks-Kirby-Balmoral comes in first place primarily for two reasons. First is the high average Airbnb cash on cash return of 5.61%. If this doesn’t impress you, it should. Having this as the average is a great indicator that this neighborhood holds Airbnb Memphis investment properties performing at an even higher rate.

The second reason is the extraordinary occupancy rate that Airbnb Memphis rentals have in this neighborhood. High occupancy rates mean low vacancy rates, and that’s something every real estate investor looks for.

2. Midtown

Median Property Price: $256,924
Price per Sq/Ft: $131
Monthly Airbnb Rental Income: $2,437
Average Airbnb Cap Rate: 5.10%
Average Airbnb Cash on Cash Return: 5.10%
Airbnb Occupancy Rate: 49%

Midtown, Memphis comes in a close second. With an average Airbnb cash on cash return of 5.10% comes a much more affordable median property price.

3. Downtown

Median Property Price: $316,241
Price per Sq/Ft: $53
Monthly Airbnb Rental Income: $2,343
Average Airbnb Cap Rate: 3.45%
Average Airbnb Cash on Cash Return: 3.45%
Airbnb Occupancy Rate: 55.09%

Last, but not least is Downtown, Memphis. Making money with Airbnb should be easy when you have such a low price per sq/ft. The average Airbnb cash on cash return in Downtown is lower than the other two neighborhoods, but it’s still a pretty good average. You can definitely find profitable Airbnb Memphis real estate investment properties here.

Airbnb Memphis Real Estate Properties for Sale

So exactly how easy is it to find profitable Airbnb Memphis real estate properties? With Mashvisor’s Property Finder tool, it only takes a couple of minutes. We’ve already used the tool and have found a couple of top-performing houses for sale right now in the Memphis real estate market. Do you have a free Mashvisor account? Click here to use our Property Finder and find properties in a matter of minutes!

Here are the details for the potential investment properties based on our latest Airbnb data:

Airbnb Memphis Real Estate Property #1

Property Neighborhood: Midtown
Property Type: Single Family Residential
Listed Property Price: $114,900
3 Beds and 1 Bath
Monthly Airbnb Rental Income: $1,819
Airbnb Cash on Cash Return: 13.60%

Airbnb Memphis Real Estate Property #2

Property Neighborhood: Midtown
Property Type: Single Family Residential
Listed Property Price: $59,000
2 Beds and 2 Baths
Monthly Airbnb Rental Income: $1,678
Airbnb Cash on Cash Return: 14.85%

Airbnb Memphis Real Estate Property #3

Property Neighborhood: River Oaks-Kirby-Balmoral
Property Type: Single Family Residential
Listed Property Price: $118,000
3 Beds and 2 Baths
Monthly Airbnb Rental Income: $3,015
Airbnb Cash on Cash Return: 13.14%

For more details on these properties and other Airbnb Memphis real estate properties, click here.

Now, these are all very impressive properties, but there’s still one question left that needs to be asked when making any Airbnb investment: Is Airbnb legal here?

Airbnb Laws and Regulations in Memphis, TN

Earlier this year, the Tennessee General Assembly passed a bill restricting how far cities can go in placing bans on short term rentals. This new legislation could affect the strict bans appearing against Airbnb rentals in Nashville, TN. It could also affect communities in the Tennessee housing market which do not yet have any Airbnb regulations on short term rentals.

Airbnb is being cooperative with the state of Tennessee and has made an agreement to collect state and local sales taxes on Airbnb bookings from guests on behalf of Tennessee hosts. However, some cities impose their own occupancy taxes on short term vacation rentals.

So far, Memphis is the only city in Tennessee for which Airbnb collects the city occupancy taxes. That’s great news for Memphis real estate investors since there’s no war on taxes like there seems to be in other cities. It’s important to always check on new Airbnb regulations in the city you’re investing in to ensure you’re making a legal real estate investment.

5 More Reasons to Invest in Memphis Real Estate

If the data wasn’t convincing enough on why you should invest in Memphis real estate 2018, here are a couple more reasons.

Price to Rent Ratio: Memphis real estate is known to have one of the best price to rent ratios in the country. This is a good indicator of high rental demand.
High Affordability Index: We’ve already mentioned how Memphis real estate is quite affordable for the hot market it’s in. Low property price matched with high rental income makes for a great investment.
Development and Job Growth: Many organizations and companies are moving to Memphis joining the already existing FedEx headquarters. The Memphis government is actually giving tax incentives to these companies to persuade them to move to Memphis.
Stable Housing Market: Memphis real estate has shown a lack of volatility over the past 20 years. It had only a few quarters where property values reduced, and at a very slow rate.
Culture: Memphis has decades of rich history running through the city. Home to cultural festivals, parks, and Graceland, Memphis is a great place to live and work in a diverse population. The more people visit Memphis, the bigger the renter pool gets.

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