Real Estate Investment in Tennessee

Why Invest in Tennessee Real Estate?

Tennessee’s climate and remarkable recreational offerings like the Great Smoky Mountains National Park in eastern Tennessee, which just so happens to be the most visited national park in the nation), coupled with cultural and music hotspots like Nashville and Memphis, make the state a coveted place for young adults, families, and retirees.

The Volunteer State is home to eleven Fortune 500 companies including HCA Holdings, Dollar General, International Paper, AutoZone, LifePoint Health, and Tractor Supply. While the most thriving sectors in the state are manufacturing, energy, film production, and healthcare global businesses like FedEx are making the state more attractive than ever before. Nashville, in particular, is seeing massive job growth. And more jobs means more people relocating, all who will need housing.

When you are also considering that Tennessee is home to:

  • The lowest cost of living in the US
  • An unemployment rate that is lower than the national average
  • Strong networks of hospitals and healthcare facilities
  • Lower commute times than the national average
  • Zero Social Security tax
  • Lower commute times than the national average
  • Vibrant education systems with colleges and universities

...It's now one of the leading real estate investor-friendly states in the country

Investment Considerations for Tennessee Real Estate

Investors should consider the following factors when looking to invest in the Tennessee real estate market:

  • Vibrant foreign investors’ presence – Presently, 934 foreign-owned firms have invested more than $34.6 billion, and created almost 138,000 jobs across Tennessee. Tennessee’s Foreign Direct Investment (FDI) is fueled by the automotive industry, and by Nissan and Volkswagen in particular. More than 120 auto suppliers based in Tennessee are also foreign-owned, as well as the North American headquarters of several foreign firms including Bridgestone, Hankook Tire, and Schwan cosmetics.
  • Rising home values – Tennessee’s median home values have risen by over 8% since 2017. Currently, the state’s median home value is still lower than the national average, but expected to rise by over 5% by the end of 2019. Steady appreciation spells opportunity for investors who are looking to build their rental portfolios.
  • Retirement friendly – Tennessee attracts many retirees due to its tax-friendliness. Presently, Tennessee residents do not pay state income tax, and Social Security retirement benefits are untaxed as well. Property taxes are also low, with an average effective rate of just 0.75%.
  • Strong healthcare system – Tennessee's vibrant healthcare facilities and vast network of hospitals make it a coveted location for many families. The healthcare sector in Nashville alone is home to than 400 health-care businesses and contributes almost $30 billion and 210,000 jobs to the local economy. In 2017, Nashville was named one of the best cities in the country for investing in a residential real estate. The city is rated as the eighth-best market to buy a home in 2018, and current population growth, coupled with jobs and increasing home prices, have made it a vibrant market worthy of further investigation.
  • Flat rent rates and high sales taxes - The state’s median rent price is below the national average, with no indicators of an uptick any time soon. Tennessee is also home to the highest sales tax in the nation, which offsets this type of housing affordability, particularly for low-income earners.

What are the Best Markets to Invest in Tennessee

Home prices in Nashville market are expected to rise by 24% over the next three years and homes in the city’s market are currently underpriced by 7%. With an unemployment rate that is 7% lower than the national average, and an ever-growing presence of foreign investors, many more people are expected to move to the “Music City” and will need places to stay.

Other vibrant real estate-friendly markets in Tennessee include Fairmount, Farragut and Nolensville. Property and violent crime rates in these areas are below the national average, while median home values are higher than the national average. All three areas are listed amongst the best places to raise a family in Tennessee

 

HomeUnion® Investment MapHomeUnion® is the leader in residential real estate investment. With the use of big data and machine learning, we analyze information on millions of single family homes in Tennessee; and across the United States and calculate home values INVESTimate® for every property in Tennessee. If you’re looking for the best investment properties across the country, visit our comprehensive investment site.

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