Knoxville, Tennessee, is a goldmine for real estate investors looking to capitalize on fix-and-flip opportunities in 2025. With median home prices around $350,000 and a market showing signs of stabilization, the city offers a unique blend of affordability, strong demand, and growth potential. For fix-and-flip investors, the key is finding emerging neighborhoods with below-market buys that promise significant upside after renovations.
This blog highlights Knoxville’s top emerging areas for fix-and-flip investments, focusing on neighborhoods with undervalued properties, high demand, and strong return potential.
Why Knoxville for Fix-and-Flip in 2025?
Knoxville’s real estate market is ripe for flipping due to several factors:
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Affordable Acquisition Costs: The median home price of $350,168 in 2024, projected to rise by 5.8-7% in 2025, allows investors to purchase properties at competitive prices compared to national averages.
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Strong Buyer Demand: Knoxville’s population growth, driven by its proximity to the Great Smoky Mountains, vibrant job market, and quality of life, fuels demand for renovated homes.
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Inventory Opportunities: While inventory remains tight at 2 months of supply, a 40% year-over-year increase in listings provides more options for finding distressed or undervalued properties.
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High Profit Potential: State-wide flippers earned an average gross profit of $93,075 per flip in Q2 2024, with Knoxville offering up to 51.2% gross profit margins.
To maximize returns, focus on emerging neighborhoods where properties can be bought below market value, renovated cost-effectively, and sold to eager buyers. Below are the top areas in Knoxville with the most fix-and-flip potential in 2025.
Top Emerging Areas for Fix-and-Flip in Knoxville
1. South Knoxville
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Why It’s Hot: South Knoxville is undergoing a revitalization, with new developments and proximity to downtown making it increasingly desirable. The area’s affordability and historic charm attract young professionals and families.
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Below-Market Opportunities: Distressed properties, such as older bungalows or fixer-uppers, can be purchased for as low as $150,000-$250,000, well below the city’s median price. For example, a vacant lot sold for $5,000 in 2012 now lists for $589,900 with a new prefab home, showing significant appreciation potential.
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Upside Potential: Renovated homes in South Knoxville can sell for $300,000-$450,000, offering 30-50% profit margins after rehab costs averaging $52,000.
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Key Considerations: Focus on properties near Vestal or Sevier Avenue, where revitalization projects are boosting property values. Ensure renovations align with buyer preferences for modern, open layouts.
2. East Knoxville
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Why It’s Hot: East Knoxville is an emerging hub with affordable homes and growing community investment. Its proximity to downtown and ongoing redevelopment projects make it appealing for budget-conscious buyers.
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Below-Market Opportunities: Fixer-uppers and foreclosed homes are available for $100,000-$200,000, significantly below the metro area’s median of $412,000.
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Upside Potential: Post-renovation, homes can fetch $250,000-$350,000, with strong demand from first-time buyers and millennials transitioning from renting. Profit margins can reach 40-50% with strategic renovations.
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Key Considerations: Target properties in neighborhoods like Parkridge or Burlington, where historic homes offer character but often need updates. Be mindful of overpricing, as homes selling 3-4% below list price indicate buyer leverage.
3. North Knoxville
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Why It’s Hot: North Knoxville, particularly areas like Fountain City, is gaining traction for its suburban feel and access to amenities. The area appeals to families seeking affordable, renovated homes.
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Below-Market Opportunities: Older homes built in the 1950s-1970s can be acquired for $175,000-$275,000, offering value-add potential through modernization.
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Upside Potential: Renovated homes in North Knoxville can sell for $350,000-$500,000, with average days on market at 44, indicating quick sales for well-priced properties. Profit margins of 30-40% are achievable.
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Key Considerations: Focus on properties needing cosmetic updates (kitchens, bathrooms) rather than structural repairs to keep rehab costs low. Check local comps, as prices per square foot average $217-$230.
4. Old North Knoxville
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Why It’s Hot: This historic district is attracting investors due to its charm, walkability, and proximity to downtown. Demand is high for restored homes with character.
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Below-Market Opportunities: Distressed Victorian or Craftsman-style homes can be purchased for $200,000-$300,000, below the area’s renovated home prices.
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Upside Potential: Post-rehab, these homes can sell for $400,000-$600,000, especially if restored to preserve historic features. Profit margins can exceed 50% with careful budgeting.
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Key Considerations: Renovations must balance modern upgrades with historic preservation to attract buyers. Permitting processes can take longer, so factor in timeline delays.
5. Lonsdale
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Why It’s Hot: Lonsdale, a historically underserved neighborhood, is seeing renewed interest due to community revitalization and affordable land. It’s ideal for investors seeking high-upside projects.
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Below-Market Opportunities: Properties can be acquired for as low as $100,000-$180,000, including foreclosures and probate homes.
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Upside Potential: Renovated homes can sell for $250,000-$350,000, with gross profits of $80,000-$150,000 per flip. The area’s gentrification trend supports strong appreciation.
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Key Considerations: Invest in properties near new community developments to maximize appeal. Be cautious of over-renovating, as the buyer pool may prioritize affordability.
Strategies for Successful Fix-and-Flip in Knoxville
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Source Distressed Properties: Use the Multiple Listing Service (MLS) to find homes listed for 60+ days, which are often ripe for negotiation. Off-market strategies, like direct mail campaigns targeting foreclosures, can yield deals with 29% higher response rates.
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Control Renovation Costs: Average rehab costs in Knoxville are $52,000, including roofing, electrical, and plumbing. Source materials in bulk and partner with reliable contractors to stay within budget.
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Price Strategically: Knoxville homes sell for 2-4% below list price on average, so price renovated homes competitively to attract multiple offers. Use local comps ($217-$230 per square foot) to avoid overpricing.
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Leverage Market Trends: With 68% of homes selling within 30 days, focus on move-in-ready properties with modern finishes to capitalize on buyer demand.
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Finance Wisely: Cash purchases eliminate interest costs, but hard money loans or HELOCs can work for investors with limited capital. Compare lenders to secure rates below 6.78% (current 30-year mortgage rate).
Risks to Watch
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Overpriced Listings: Knoxville’s market is considered 37% overvalued, so scrutinize comps to avoid overpaying for properties.
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Rising Renovation Costs: Nationally, rehab costs averaged $72,000 in Q1 2025, so stick to properties needing minimal structural repairs.
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Market Shifts: A potential 40% recession risk in 2025 could cool buyer demand, though Knoxville’s strong fundamentals mitigate this risk.
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Permitting Delays: Ensure compliance with local regulations, as permitting can take over 30 days in historic areas like Old North Knoxville.
Conclusion
Knoxville’s fix-and-flip market in 2025 offers substantial opportunities for investors targeting emerging neighborhoods like South Knoxville, East Knoxville, North Knoxville, Old North Knoxville, and Lonsdale. These areas combine below-market acquisition costs with strong upside potential, driven by Knoxville’s affordability, population growth, and tight inventory. By sourcing distressed properties, managing renovation budgets, and pricing strategically, investors can achieve gross profits of $80,000–$161,000 per flip. To maximize your success, partner with Bessie Whiteside, a knowledgeable Knoxville real estate agent who can help you analyze comps, identify high-potential deals, and navigate this fast-moving market. Start flipping your way to success in Knoxville’s dynamic real estate scene today.
