Whether you’re in the business of flipping homes or looking to buy a rental home, you might’ve wondered if Knoxville is a good place to look for potential rental properties. This guide will show you what you need to learn about the housing market in Knoxville, TN, if it’s a good real estate investment, or if you’d be better off putting your hard-earned money elsewhere.
Housing Market Knoxville TN Overview
Real estate investors are looking at Tennessee for opportunities because the housing costs in the state are lower than the national average. However, not all real estate markets are the same, so you need to do your research to find out where to look for potential investments. This is where the housing market in Knoxville, TN shines.
Many would say that Knoxville has become a somewhat forgotten city. However, this city has retained its Southern charm and offers many advantages for interested investors such as affordable housing and low cost of living. These pros to living in Knoxville make it a good place to invest in a rental property, whether it is a single-family home or a multi-residential building.
There is also a downside to this: steady competition. The rise in demand for houses in Knoxville has resulted in a low inventory, with just over two months’ worth of inventory on the market. This low inventory, along with many other factors, has contributed to the increase in home prices in the city’s real estate market. The rising prices aren’t enough to drive away potential investors though. There is still a growing demand for rental properties in the city and the prices are still below the national average. But experts cannot predict when the rapid appreciation of home values in Knoxville will stop, nor what will make it stop.
Average Rent in Knoxville, TN
The best way to assess the rental market in Knoxville is to crunch the numbers. The average rent in Knoxville has increased from the previous year’s rates. The percentage of the year-on-year growth in Knoxville’s rental market is higher than the national average (although the actual cost of renting is still lower than the national average).
These are the average rent prices in Knoxville as of 2022:
| Type of Rental Property | Average Rent |
| Studio | $1,129 |
| 1-bedroom Apartment | $1,304 |
| 2-bedroom Apartment | $1,359 |
| 3-bedroom Apartment | $1,549 |
The above figures are only representative of the average rental cost for apartments in Knoxville. However, the actual cost of renting will vary depending on the neighborhood.
Simply put, you must research the average rent per neighborhood to see how much you could potentially earn from the investment. The rental price difference also entails that the cost of acquiring these properties will differ from one neighborhood to another.
2023 Trends in Knoxville Real Estate Market
Before you buy a rental property in Knoxville, it also pays to research and understands the real estate climate in the city. This will give you an idea of the potential performance of your investment in the next year or several years ahead. If you’re interested in buying rental property in Knoxville, things are looking up. This real estate market has managed to outdo the national averages in every positive way. To get a better understanding about the Knoxville housing market it is best to contact a Knoxville Realtor.
Here are some of the top real estate market trends in Knoxville for 2023:
- The high employment rate is fueling the demand for real estate properties in Knoxville. Demand is high for the real estate market and it is having the same impact in this city. This has allowed many buyers to enter the market, resulting in competitive prices and more leverage for negotiation for serious investors.
- Low inventory will remain an issue. The tight building permit requirements will make it difficult for new builds to resolve the low inventory problem. Until something changes, home buyers and investors can expect the house prices to continue their upward movement.
- Rentals will remain in high demand. Low inventory and rising house prices will increase the demand for rental properties in Knoxville. The current price-to-rent ratio in Knoxville will give assurance to would-be property investors that there will be a demand for their rental properties. Even for those who can afford to buy, the limited inventory and stiff competition will force them to stay in the renter pool. Search for homes for sale directly from the Knoxville MLS.
Is the Housing Market in Knoxville TN A Good Place to Buy a Rental Property?
The short answer is yes. One important statistic to consider is the higher number of renters versus homeowners in Knoxville. The high renter population is due to the city being known as a college town and its high student population. It is home to over 26,000 students. You can take advantage of this high rental demand when investing in a property in Knoxville.
In addition, the home prices in Knoxville have seen sharp increases in the past year or so. The trend of house prices in the city has consistently gained over the last four-year period. This indicates that fewer people will be able to afford to buy a home and would opt to rent instead. For property owners, it is a good opportunity to invest in a rental property. Before buying a rental property be sure to stay up to date with high crime and low crime areas.
If you are worried about renting your property to college kids, don’t, there are alternatives. There is also a significant percentage of retirees choosing to live in Knoxville. Retirees are a good market to target for your rental property.
Conclusion
While the housing market in Knoxville, TN has steadily increased over the past few years, it remains as one of the most affordable real estate markets in the US. There are plenty of neighborhoods to choose from in Knoxville, which impacts the cost of buying your investment property and the rental potential. Pay due diligence when researching these neighborhoods so you know where to look for your next investment. The Goswitz Team- Knoxville Realtors can help you find your next home to buy.
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