Real Estate investors nationwide are continuing to secure loans for rental properties in Tennessee to expand their portfolios. Tennessee is a current favorite of real estate investors for cash flow and appreciation! Easy Street Capital is proud to be a leading provider of rental loans for real estate investors looking to build rental portfolios in the state of Tennessee!
Investment Property Loan Types
When it comes to loans for rental properties in Tennessee, there are many markets and investment loan products to choose from. For investors that like to get their hands dirty, rehabbing run down properties, hard money renovation loans are a perfect choice! These loans allow you to buy a property quickly and finance your rehab costs as well! Once you are done, you can either “flip” the property for a quick profit or pursue the BRRRR Strategy by renting it out and then refinancing into a long-term, low-rate DSCR loan!
Long-term DSCR Loans are also great for investing in turnkey rental properties. Turnkey refers to properties that are rent-ready and require no renovations. Move-in ready single family homes and fully furnished short term or medium term rentals are great for cash flow and price appreciation. Most DSCR Loans are fixed rate for thirty years, locking you into a fixed interest rate for the long-term, while, if historical patterns continue, rents and appreciation increase steadily each year. Bottom line, debt costs stay the same while cash flow increases!
Where To Invest In Real Estate In Tennessee
Tennessee is a great market for real estate investment properties because of the diverse geographic options. There are large cities such as Nashville, Memphis and Knoxville with plenty of jobs and renters to fill up rental properties. There are medium-sized cities such as Chattanooga and Murfreesboro that have more affordable properties and less competition. Finally, the Smoky Mountain National Park features vacation destinations such as Gatlinburg, Sevierville and Pigeon Forge, with well established infrastructure and regulations for short term rental investors!
Nashville
Nashville is home to a diverse range of industries, including healthcare, finance, and music, and has a low unemployment rate compared to the national average. As of February 2024, the US Census Bureau reports Nashville’s unemployment rate stands at 2.2%, significantly lower than the long-term average of 4.71%. A low unemployment rate in Nashville signals a robust economy with more residents gainfully employed. This economic stability often translates into increased demand for housing. For real estate investors, this heightened demand can lead to faster property sales or rentals, optimizing investment returns.
Nashville is also one of America’s best cities for tourism with attractions such as the Country Music Hall of Fame, the Grand Ole Opry, and numerous live music venues. It is also very popular for group trips as a top destination for bachelorette parties and year-round SEC sports and the Annual SEC Men’s Basketball tournament. The Nashville Convention & Visitors Corp reports that Nashville attracts over 16 million visitors annually, and the tourism industry generates $7 billion in visitor spending each year! This makes Nashville an ongoing favorite for real estate investors focused on short term rentals!
Memphis
Located in the southwestern region of Tennessee, Memphis is a vibrant city that offers a unique blend of history, culture, and entertainment. Known for its rich musical heritage and delicious barbeque cuisine, Memphis is a popular destination for foodies and music lovers alike. The city also boasts a number of green spaces, including Shelby Farms Park and Overton Park, which offer a range of outdoor activities such as hiking, biking, and picnicking.
With its diverse attractions and vibrant atmosphere, Memphis has become a sought-after location for short-term rental investors. Visitors from across the country come to Memphis throughout the year to experience the city’s lively festivals and events, including the Beale Street Music Festival and the Memphis in May International Festival. Rental rates and occupancies remain steady, with peak seasons during the spring and summer months. Additionally, the city’s proximity to popular tourist destinations like Graceland and the Mississippi River make it an ideal location for those looking to invest in the short-term rental market.
Knoxville
Knoxville, Tennessee is home to a wide range of industries, including healthcare, education, and manufacturing, and has a relatively low unemployment rate compared to the national average. According to Zillow, the average monthly rent in April 2024 was $1,950, while the median household income was $68,580 per year. With rental rates on the rise and a steady income stream from tenants, investing in Knoxville’s real estate market promises both stability and growth.
Knoxville is also a popular destination for tourism, with attractions such as the Knoxville Museum of Art, the Women’s Basketball Hall of Fame, and numerous outdoor recreational opportunities. It is also well-known for its college sports, as home to the University of Tennessee and its football and basketball teams. The Knoxville Tourism & Sports Corporation reports that Knoxville attracts over 11 million visitors annually, and the tourism industry generates over $2 billion in visitor spending each year. This makes Knoxville an attractive location for real estate investors looking to invest in short-term rentals.
Chattanooga
Chattanooga, Tennessee is a city located in southeastern Tennessee and is the county seat of Hamilton County. With a population of just over 184,000, it is considered a solid secondary market. The city is home to several major employers, including the Volkswagen Chattanooga Assembly Plant and the University of Tennessee at Chattanooga.
Chattanooga is a promising market for real estate investors due to its less competitive nature compared to other better-known cities. With a strong employment base and a variety of demand drivers, such as the Tennessee Aquarium and the Chattanooga Choo Choo, Chattanooga has a rich cultural history. The city also offers extremely affordable real estate, making it a great location for investors looking to build a diverse and extensive portfolio in a unique market.
Murfreesboro
Murfreesboro, Tennessee is a rapidly growing city located in Rutherford County. With a population of over 150,000, Murfreesboro is the sixth-largest city in the state and is quickly becoming one of the most desirable places to live in Tennessee. One of the main reasons why Murfreesboro is a good market for real estate investors in single-family rentals and small multifamily properties is due to its strong job market and economy. This stable employment base translates to a consistent demand for rental properties and a low vacancy rate for real estate investors.
Another reason why Murfreesboro is a promising market for real estate investors is due to its affordable real estate prices. Compared to other cities in Tennessee, Murfreesboro offers lower housing costs, making it an attractive destination for renters and investors alike. Additionally, the city is experiencing rapid population growth, with a 6.3% in increase from just 2020-2022, according to the US Census Bureau. This growth, coupled with the affordability of real estate, creates an ideal environment for real estate investors to invest in single-family rentals and small multifamily properties.
Sevierville
Short term rental investing in the Smoky Mountains of Tennessee can be a lucrative and rewarding investment opportunity. The Great Smoky Mountains National Park is the most visited national park in the United States, attracting over 12 million visitors annually. This high level of tourism creates a steady demand for short term rentals in the area, making it an ideal market for real estate investors.
In addition to the natural beauty of the Smoky Mountains, the area offers a variety of attractions for visitors, including theme parks, museums, and outdoor recreational activities. The city of Sevierville, located at the entrance to the national park, is a popular destination for tourists and is home to a wide range of amenities such as restaurants, shops, and entertainment venues. This high level of tourist activity translates to a strong demand for short term rentals, providing real estate investors with a steady stream of rental income.
Additionally, many investors see Sevierville as a short term rental niche market, with loans for rental properties harder to get due to the “vacation market” nature of the city. However, the city’s permanent population has been growing significantly in recent years. The city’s growing population and economy also make it an appealing market for long-term rental investments. According to the latest U.S. Census Bureau, Sevierville’s population grew by 15.6% from 2010 to 2020, outpacing the national average. These permanent residents, typically employed in tourism and retail, have an income profile perfect for long-term tenants in single family rentals or small multifamily rental properties.
Kingsport
Kingsport, Tennessee, is a growing city located in the northeast corner of the state. With a population of over 50,000 people. The city has a diverse economy, with major industries such as healthcare, manufacturing, and education. The Holston Valley Medical Center, the Eastman Chemical Company, and the Kingsport City Schools are just a few examples of the large employers in the area.
Investing in real estate in Kingsport offers several advantages. The area’s growing economy and stable job market make it a great location for rental properties, with a steady demand for housing. In addition, the city is home to several colleges and universities, which can provide a source of renters for student housing.
Ready to Get Started?
Ready to invest in real estate in Tennessee? Easy Street Capital is Tennessee’s best provider of investment property loans for both hard money rehabs and long-term rental properties.
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