Hamilton Herald Masthead


Front Page - Friday, July 8, 2016

It’s a great time to own rental property

REALTOR Association President's Message

Nathan Walldorf

As I speak with investors who own rental property, they tell me they’re receiving rental applications even before prospective tenants see their properties. Kent Property Management reports that, in some cases, properties have an executed lease prior to the current tenant vacating the property. Local media recently reported that Chattanooga’s rental rates have risen by 21 percent since 1980. What’s fueling that growth?

The Chattanooga economy has grown an enormous amount since 2008. Volkswagen (VW) moved its US plant to Chattanooga, which also triggered several VW suppliers to follow suit. Also, an Amazon Fulfillment Center moved to Chattanooga.

In addition to these international companies, several start-up businesses have grown to maturity in Chattanooga. Much of the credit for this growth is due to the “venture incubator” comprised of Lamp Post Group and the Hamilton County Business Development Center (HCBDC). Funded by the City of Chattanooga, Hamilton County, and the Economic Development Administration, the HCBDC boasts it is “the largest business incubator in the state of Tennessee, and the third largest in the United States.”

Also, having the fastest Internet in the country – one gigabit per second – is attracting businesses to that previously would not have considered our region. As a result, Sperling’s Best Places to Live predicts that over the next ten years, Chattanooga’s job growth will be 33.2 percent. Such growth will have a positive impact on those who already call Chattanooga home, not to mention the people that will move here as a result of the new jobs.

In the meantime, Chattanooga continues to make itself a more attractive place to live. For example, the Riverwalk will eventually run more than 20 miles, connecting downtown to the Lookout Mountain Conservancy and the Federal Park’s hundreds of miles of trails on Lookout Mountain. On the other end, the Riverwalk will extend to South Chickamauga Creek and East Ridge’s Camp Jordan. What a tremendous amenity for visitors and residents alike. In downtown Chattanooga alone over the past 15 years, we’ve watched hotels, apartments, condos, and revitalized neighborhoods spring up seemingly overnight.

It’s an exciting time to own property in Greater Chattanooga, including investment property. If you’re considering investing in rental property, here are a few things to know:

Have enough money for a downpayment: You will need a 20 percent downpayment to get a loan for investment property.

Find the right loan option: Some banks love to finance income-producing property. Often, local banks are the best for these kinds of purchases, but shop around.

Consolidate your financial accounts: Chris Greggory of FSG Bank says it’s best to build a good business relationship with one bank rather than having loans with multiple, different banks around town. Greggory adds that by consolidating to one institution, it’s easier to keep track of all accounts and payments.

Get a handle on your expenses: Start with a good accountant and keep track of your expenses. You can not only write off the interest you pay on a rental property but also the money you spend on repairs. An accountant can keep you informed on your options and guide you on the best tax write-off for these expenses.

Get a Realtor: You need someone who can get help you earn a good return on your investment by telling you what to expect – rent rates, future expenses, projected yearly vacancies, and percentage of return. You want to invest in property worth your time and money.

To find an investment property that could be your future retirement plan, call a Realtor today or find one on www.gcar.net.

The Greater Chattanooga Association of Realtors is “The Voice of Real Estate in Greater Chattanooga.” The Association is a regional organization with more than 1,700 members, and is one of more than 1,400 local boards and associations of Realtors nationwide that comprise the National Association of Realtors. The Greater Chattanooga Association of Realtors services Hamilton and Sequatchie counties in southeast Tennessee, and Catoosa, Dade, and Walker counties in northwest Georgia. For more information, visit www.gcar.net.