Is it cheaper to rent or buy a home in Memphis? The answer can be yes or no depending on what you are trying to accomplish. Are you thinking short-term or long-term? Are you thinking about saving money or making money?

Joe Spake is a realtor in Memphis and a well-known real estate blogger. He posted some statistics from Trulia on his blog recently reporting Memphis Price to Rent ratio being very low. In fact, Trulia posts Memphis in 5th place for the lowest rents among the cities with over one million people.

Real estate markets in this city along the muddy Mississippi River maintained more equilibrium during the bubble-and-bust cycle that many other cities experienced. Home prices in Memphis were already about 20% below value as compared to the rest of the nation before the bubble ever burst. Consequently, Memphis has not seen as drastic of a drop in values during the “Great Recession.”

What does this information mean to you? If you are looking for a short-term savings, then Memphis is the place for you to get a good deal as a renter. As long as taxes, insurance and borrowing costs are low, you should continue to enjoy lower rents. As a bonus, Memphis is just a great place to live.

However, if you are looking to build your personal wealth and save even more money in the long-term, the statistics suggest Memphis to be a great place to make that happen. The lower than average home prices allow investors to buy houses with a positive cash flow, rent to a large pool of tenants and not suffer the value swings being seen in other parts of the country. Memphis is a stable place to buy a primary residence too.

As a mortgage loan officer with Evolve Bank and Trust, I see investors locally and from other states clamoring to buy in the Memphis area because of our relatively low prices and good rental market. Here an investor or owner occupant can enjoy an investment that can bring them –(1) cash flow (2) appreciation (3) tax shelter (4) amortization and (5) leverage.