3BR Chattanooga Rental Gem - Promising Cap Rate & Impressive Long-Term Returns

Listing: Awning - Redfin - Zillow

Welcome to the charming Brainerd neighborhood of Chattanooga! This unique property at 107 Talley Rd is bursting with character and waiting for an investor or motivated homeowner to bring it to life. With three bedrooms, three full bathrooms, and over 2,700 square feet of living space, this home offers plenty of space and potential.

Step inside and admire the beautiful hardwood floors, large archways, and spacious rooms that this home has to offer. Upstairs, you'll find a primary bedroom with an ensuite bathroom and a private deck that is perfect for enjoying your morning coffee or evening cocktail. The house needs some love and care, but with the right vision, it could become a truly stunning home.

The property features a new mini-split HVAC unit in the downstairs den, and the original HVAC unit has been cleaned and serviced. The upstairs primary bedroom has had the stained carpet removed, and the landscaping has been cleared and cleaned up, including removing several dead trees and trimming others. The house has also been pressure washed and deep cleaned.

With a desirable B+ overall Niche neighborhood grade and a C overall Niche school grade, this neighborhood is a great place to live. Plus, flood insurance is not required as the property is in a Flood Zone X.

At just $95 per square foot, this property is priced to sell and presents an excellent opportunity for rental investors. Awning's analysis estimates a 5.0% cap rate and a 10-year return of 17.7%, including a projected monthly rent of $1,870 and renovation costs of $9,579. With a strong potential for cash flow, tax benefits, and appreciation, this property is not one to be missed.

Investment Financials

How much does the home cost?

$259,400

How much will it earn in rent?

$1,870 per month

How much will it cost to renovate?

According to the information provided by Awning, the estimated renovation cost for this property would be $9,579, which includes partially repainting the interior of the home to neutral colors ($2,737) and new flooring in part of the home ($6,842). However, it's important to note that this is just an estimate, and the actual cost of renovations may vary depending on the scope of the work and other factors. It's recommended that you consult with a contractor to get a more accurate estimate of renovation costs.

How much cash can you take home in the first year?

According to Awning's analysis, the estimated cash flow for the first year of owning this Brainerd home is -$706. However, the property's potential for long-term returns looks promising with an estimated 10-year return of 17.7%. With a unique charm and plenty of space, this home presents a great opportunity for any investor or motivated homeowner looking for a project to breathe life into. The beautiful hardwood floors, large archways, larger rooms, and private deck make it a must-see in person as the pictures only touch the possibilities. Additionally, the neighborhood is highly desirable, receiving an overall grade of B+ from Niche.

What is the cap rate for this property?

The estimated cap rate for this property is 5.0%.

All of the cap rates and returns for this property are estimates and are not intended as a guarantee of income or returns. Every investment has risks. It's important to discuss any investment, returns, regulations, laws and projections with a financial advisor, attorney or another fiduciary.

More About Chattanooga, Tennessee

Where is Chattanooga, Tennessee?

Chattanooga is a city in southeastern Tennessee, United States. It is located in Hamilton County, in the Tennessee Valley region, and is situated along the Tennessee River, near the border with Georgia.

What companies are the major employers in and around Chattanooga, Tennessee?

• Volkswagen: The German automaker has a manufacturing plant in Chattanooga, which employs thousands of people in the area.
• Amazon: The e-commerce giant has a distribution center in Chattanooga, which employs a large number of people.
• Erlanger Health System: Erlanger is a non-profit hospital system that operates several hospitals and clinics in the Chattanooga area.
• BlueCross BlueShield of Tennessee: This health insurance company has its headquarters in Chattanooga, and is one of the largest employers in the area.
• Unum: Unum is a major provider of disability insurance, and has its headquarters in Chattanooga.
• McKee Foods: This company is best known for producing snack cakes, including Little Debbie snack cakes, and has a production facility in nearby Collegedale, Tennessee.
• TVA: The Tennessee Valley Authority is a federal agency that operates power plants and manages water resources in the Tennessee Valley region. TVA has several facilities in and around Chattanooga, and is a major employer in the area.

What are the demographics of Chattanooga, Tennessee?

According to the U.S. Census Bureau's QuickFacts, Chattanooga is a city located in the state of Tennessee. QuickFacts provides statistics for all states and counties, as well as for cities and towns with a population of 5,000 or more. As of the most recent estimates from 2020, the population of Chattanooga was approximately 184,983 people. The city has a relatively balanced gender distribution, with 49.6% of the population being male and 50.4% being female. The median age in Chattanooga is 37.4 years.

Additionally, QuickFacts provides information on the racial and ethnic makeup of Chattanooga. As of the most recent estimates from 2020, the largest racial group in the city is White alone, comprising 58.4% of the population. The Black or African American alone population makes up 33.9% of the population, while people who identify as Hispanic or Latino (of any race) account for 6.8% of the population. The remaining 1% of the population identifies as Asian alone, American Indian and Alaska Native alone, or two or more races.

What is the Niche neighborhood grade and school grade in Chattanooga, Tennessee?

According to Niche, Chattanooga is a city in Tennessee with an overall grade of B-. The grade is calculated based on several factors including public schools, crime and safety, outdoor activities, and commute. Chattanooga received an A grade for outdoor activities and an A- grade for commute. Niche also provides a full report card on Chattanooga, including data sources and statistics, and describes Chattanooga as one of the best places to live in.

In terms of schools, GreatSchools provides ratings for schools in Chattanooga, including the Chattanooga School for Arts and Sciences (CSAS) Upper School. The CSAS Upper School received a rating of 5 out of 10, based on 13 reviews from students and parents. The school is a public school that serves students in grades 6-12 and was awarded the College Success Award in 2020 by GreatSchools.

Niche also ranks the best school districts in Chattanooga based on key statistics and reviews from students and parents. The ranking factors include state test scores, college readiness, graduation rates, SAT/ACT scores, teacher quality, public school district ratings, and more. As of the most recent rankings in 2023, Hamilton County Schools, which includes schools in Chattanooga, was ranked #6 out of 62 school districts in Tennessee.

What is the property tax rate in Chattanooga, Tennessee?

The property tax rate in Chattanooga, Tennessee varies depending on the location and the type of property being taxed.

According to the Chattanooga government website, for information on the property tax sale or for information specific to payments made to the Clerk & Master, individuals can contact their office directly at (423) 209-6606 or visit them in person at 625 Georgia Ave, 300 Courthouse, Chattanooga, TN 37402.

SmartAsset reports that Hamilton County, where Chattanooga is located, has an average effective property tax rate of 0.92%, which is among the highest property tax rates in the state. In Chattanooga, the total mill rate is $2.2250 per $100 in assessed value.

The Comptroller of the Treasury of Tennessee provides a list of property tax rates by county in Tennessee. As of 2020, the property tax rate for Hamilton County was 2.21%.

How many rental listings and vacancies are in Chattanooga, Tennessee?

There are currently a total of 137 active rental listings for single-family homes in Chattanooga, Tennessee, with a median rental price of $1,950 per month.

In terms of overall rental availability, there are 955 apartments for rent currently available in Chattanooga, TN. The most common type of apartment is the 2-bedroom unit, with a total of 277 listings available, while the least common is the studio apartment, with only 42 listings available. There are also houses and other types of apartments available for rent in Chattanooga, TN, ranging from affordable to higher-end options.

Furthermore, Zillow reports that there are currently 124 single-family rental listings in Chattanooga, TN as of the most recent update. Zillow allows users to filter their search results based on a range of criteria such as the number of bedrooms and bathrooms, square footage, price range, and location. Zillow also allows users to contact landlords directly about rental listings.

It is worth noting that rental availability and prices can change frequently depending on market conditions, and there may be other sources for rental listings in Chattanooga, TN that are not included in these search results.

What's the average rent in Chattanooga, Tennessee?

The average rent in Chattanooga, Tennessee varies depending on the neighborhood, type of housing, and time frame.

According to Zillow, the median rent price for houses in Chattanooga, TN ranges from $700 to $155,000 per month, with a median rent of $1,892. Additionally, Zillow reports that the median rent price in Chattanooga, TN for February 2023 is $1,892, which is $197 more than February 2022.

RentCafe provides information on the most affordable neighborhoods in Chattanooga, where the average rent goes for $999 per month in 21st Century, Hilltop, and Ridgeside. Other affordable neighborhoods include Woodmore, Belvoir, and East Ridge, where the average rent ranges from $1,051 to $1,081 per month.

Zumper reports on the average rent for studio, 1-bedroom, and 2-bedroom apartments in Chattanooga over the past month. The average rent for a studio apartment increased by 15% to $1,439, while the average rent for a 1-bedroom apartment decreased by -1% to $1,326, and the average rent for a 2-bedroom apartment also decreased by -1% to $1,500.

From Listing to Rental

To get the property ready:

Place an offer on this property: If you want help finding the best representation, simply submit your information by pressing "I'm Interested in this Property"

Close on the property: Closing on this property should be simple. An agent will help you review the contract and confirm that everything in the inspection report makes this a good deal.

Hire a property manager to manage your property:

Property Management: If you choose to use Property Management Awning can help you select the best service and get you a deal on management in the area.