Knoxville, Tennessee has emerged as an attractive market for real estate investment in recent years. With its affordable housing prices, stable job growth and promising economic outlook, Knoxville offers savvy investors plenty of opportunities to purchase investment properties and earn rental income. In this article, we will examine the key factors that make Knoxville a smart choice for investing in real estate, and provide an overview of the city’s most promising neighborhoods and property types for generating strong rental yields and capital appreciation.
Knoxville’s strong economic fundamentals support real estate demand
Knoxville has a diverse economy anchored by major employers in fields like healthcare, education, manufacturing and technology. The University of Tennessee and Oak Ridge National Laboratory bring tens of thousands of students and high-paying jobs to the region. Knoxville’s unemployment rate sits below the national average, while its population and job growth are outpacing national trends. This steady economic expansion bodes well for real estate, as more households and better wages drive demand for housing.
Affordable home prices allow for high rental yields
Knoxville home values remain relatively modest compared to other growing Southern cities. The median home price is around $235,000, making it feasible for investors to acquire properties that can generate strong rental yields. With rents averaging $1,100-$1,400 for a 3-bedroom house, investors can expect gross rental yields of 5-7% on their investment properties in Knoxville.
Downtown and University of Tennessee areas offer opportunity
Downtown Knoxville and the University of Tennessee campus area are worth considering for those investing in Knoxville real estate. Downtown is revitalizing with new businesses, hotels and apartments, creating demand for rentals. Meanwhile, UT-Knoxville’s large student population needs off-campus housing near campus. Investors can target condos, townhomes and single-family homes in these areas to appeal to both young professionals and student tenants.
Strong market for new builds and renovated properties
There is strong appetite among Knoxville renters for newer, updated rental units. Investors who buy older homes to rehab and modernize can often achieve premium rents and lower vacancy rates. New build communities in Knoxville suburbs are also attractive options, offering amenities like gyms and pools that allow investors to charge higher rents.
With its steady economy, affordable housing and promising demographics, Knoxville offers investors plenty of opportunities to profit from rental real estate. Investors should target properties in areas with major employment centers and young renter populations to achieve the best returns.