Did you know that Memphis is the best city in Tennessee to buy a home, investment wise?
When looking for a home, figuring out whether to rent or buy can be tricky. There are many factors at play and trying to time the housing market is difficult.
There are mathematical ways however to evaluate each city, so you can make an informed decision.
Based on the latest Census Bureau data for cities with a population of 60,000 or more, the rankings were determined by calculating the price to rent ratio.
The price to rent ratio is the median home value divided by the median annual rent and serves as a benchmark for understanding whether it is better to rent or buy in an area.
When home prices rise significantly faster than the local rents, the ratio will rise – indicating a possible housing bubble where it may be better to rent.
A ratio under 15 indicates that it is likely more affordable to buy, and ratio over 20 are likely better to rent.
Here are the top 5 best places to buy:
- 38127 (Memphis, TN) – 8.4
- 38108 (Memphis, TN) – 8.6
- 38141 (Memphis, TN) – 8.7
- 38114 (Memphis, TN) – 9.0
- 38106 (Memphis, TN) – 9.3
Here are the top five worst places to buy:
- 37680 (Laurel Bloomery, TN) – 51.2
- 37350 (Lookout Mountain, TN) – 46.9
- 37408 (Chattanooga, TN) – 43.2
- 37866 (Sharps Chapel, TN) – 42.9
- 38352 (Luray, TN) – 39.2