Owning a rental property in Memphis can be a great investment—until it isn’t. Many landlords eventually face a tough question: Should I keep holding this property or sell it?
The truth is, holding on too long can eat away at your returns, especially if the property starts draining time, money, or energy. On the other hand, knowing the right time to cash out can help you maximize profits and avoid costly headaches.
In this guide, we’ll cover the 7 clearest signs it’s time to sell your Memphis rental, how to calculate whether holding or selling makes more sense, and the fastest ways to close if you decide to move on.
1. Problem Tenants Are Taking Over Your Time
Good tenants make rental ownership easy. Bad tenants make it a nightmare.
Signs your tenants might be a problem:
- Late or missed rent payments
- Frequent complaints or unreasonable demands
- Lease violations (unauthorized pets, extra occupants)
- Property damage beyond normal wear and tear
- Eviction proceedings or constant legal notices
Dealing with problem tenants means time in court, legal fees, vacancy losses, and stress. If tenant issues are recurring, it’s often a sign your property isn’t aligned with your investment goals anymore.
Real Example:
A Midtown landlord spent nearly a year cycling through three bad tenants, losing more than $8,000 in unpaid rent and legal fees. When she finally sold, she wished she’d done it a year earlier.
2. Repairs Are Piling Up Faster Than Cash Flow
Every rental eventually needs repairs, but if maintenance is eating your profits, it’s time to reassess.
Typical Memphis repair costs:
- Roof replacement: $6,000–$12,000
- HVAC replacement: $4,000–$8,000
- Plumbing or electrical issues: $2,000–$6,000
- Turnover updates (paint, flooring): $3,000–$5,000
If you’re facing multiple major repairs in a short period, you might be looking at tens of thousands of dollars—money that may not come back in increased rent or value.
3. Your ROI Is Declining
Return on investment (ROI) is the lifeblood of a rental property. When ROI starts shrinking, holding the property may not make sense anymore.
Formula:
ROI = (Annual Net Income ÷ Property Value) × 100
Example:
- Rent collected: $1,500/month
- Expenses (taxes, insurance, repairs, vacancies): $600/month
- Annual Net Income: $10,800
- Property Value: $250,000
- ROI = 4.3%
If ROI has fallen below what you could earn elsewhere—without the headaches—it might be time to sell and reinvest.
4. The Neighborhood Is Declining
Even a well-maintained property can lose value if the surrounding area declines.
Warning signs include:
- Rising crime rates
- Vacant or boarded-up homes nearby
- Fewer amenities (stores, schools, parks)
- Lower rental demand or falling rents
Neighborhood decline affects both rental income and resale value, which can trap landlords who wait too long.
5. You’re Ready to Reinvest or Retire
Sometimes the decision isn’t about the property—it’s about you.
Many Memphis landlords decide to sell because:
- They want to retire and access their equity.
- They want to exchange into another property via a 1031 exchange.
- They prefer passive investments (REITs, stocks, other real estate).
- They’ve reached their financial goals and don’t want more landlord stress.
If your personal goals have shifted, hanging on to a rental out of habit can hold you back.
6. Market Conditions Are Favorable for Sellers
The Memphis housing market can fluctuate quickly. Selling during a seller’s market—when demand is high and inventory is low—can mean higher prices and faster closings.
Local 2025 snapshot:
- Median DOM (Days on Market): 23 for well-priced homes
- Cash buyers closing time: 7–14 days
- Investor demand remains strong for single-family homes in Midtown, East Memphis, and Cordova
If your property has appreciated significantly, selling now might lock in maximum value before conditions change.
7. You’re Emotionally or Logistically Burned Out
Being a landlord isn’t just about spreadsheets. It’s about dealing with people, problems, and pressure.
If you find yourself constantly stressed, losing sleep over repairs, or tired of dealing with tenants, it may be time to cash out and simplify.
Many landlords eventually decide they prefer liquidity, simplicity, or new investment directions.
Rental vs. Sell Value Calculator (Text Version)
Here’s a quick way to see whether holding or selling makes more sense:
RENTAL SCENARIO
Monthly Rent: $__________
Monthly Expenses (taxes, insurance, repairs, vacancy): $__________
Net Monthly Income = Rent - Expenses
Annual Net Income = Net Monthly Income × 12
Current Property Value: $__________
ROI = (Annual Net Income ÷ Property Value) × 100 = _______%
SELL SCENARIO
Estimated Sale Price: $__________
Mortgage Payoff: $__________
Closing Costs: $__________
Estimated Net Proceeds: Sale Price - Mortgage - Costs = $__________
Compare your ROI to what you could earn if you reinvested your net proceeds elsewhere. If the ROI is low and equity is high, selling often makes more sense.
Fastest Ways to Sell a Rental in Memphis
If you decide it’s time to sell, you have two primary options:
- Traditional MLS Sale
- Best for fully updated, tenant-free homes
- Usually takes 30–60+ days
- Involves showings, repairs, and agent commissions
- Cash Sale
- Close in 7–14 days
- Sell as-is (even with tenants or repairs needed)
- No showings or commissions
- Ideal if you want to avoid legal headaches with problem tenants
Many landlords choose cash home buyers in Memphis when selling occupied or problem rentals because they can sell with tenants in place and skip eviction delays.
Real Memphis Seller Stories
East Memphis Duplex Owner
A landlord owned a duplex with one long-term tenant and one problematic tenant. After two costly evictions, he accepted a fair cash offer, sold in 12 days, and reinvested the proceeds into a passive note investment. His ROI increased, and his stress dropped to zero.
Frayser Single-Family Investor
She bought a house in 2014 for $80,000. By 2025, it was worth $200,000 but needed $20,000 in repairs. Instead of renovating, she sold to an investor cash buyer in 10 days, netting $178,000. She used the funds to buy a small vacation rental in Florida.
Common Pitfalls to Avoid
- Overvaluing the property
→ Price it based on condition, not just comps. - Waiting too long after ROI declines
→ Every month you wait can cost thousands in repairs and lost opportunity. - Evicting tenants unnecessarily
→ Many buyers will purchase with tenants in place. - Skipping title or tax checks
→ Always clear liens early to avoid closing delays. - Not comparing net proceeds vs. ROI
→ Raw sale price isn’t the whole story—your net matters most.
FAQs
Q: Can I sell my Memphis rental with tenants still living there?
A: Yes. Many investors buy occupied properties, sometimes keeping the tenants after closing.
Q: Do I need to fix anything before selling?
A: Not necessarily. Cash buyers will often purchase the property as-is.
Q: How fast can I close if I sell for cash?
A: Typically 7–14 days, depending on title and payoff timelines.
Q: What about security deposits?
A: These are usually transferred to the buyer at closing or credited appropriately.
Q: What if my tenants aren’t paying?
A: Some buyers will take over the eviction process after closing.
Q: Should I sell during lease renewal or wait for lease end?
A: It depends on your buyer. Cash buyers often buy during leases; MLS buyers may prefer vacant.
Q: Can I 1031 exchange the proceeds into something else?
A: Yes, many landlords use sales to reinvest in other properties tax-deferred.
Final Thoughts
Knowing when to sell your Memphis rental is about more than timing the market—it’s about recognizing when the property no longer serves your financial or personal goals.
If you’re facing bad tenants, big repairs, shrinking ROI, or simply want to simplify your life, it may be time to cash out strategically.
Whether you list traditionally or sell quickly for cash, the key is to run the numbers honestly and act before declining returns become expensive regrets.