Nashville - good market to invest? Solid tenants/ appreciation?

Question

Fellow BP members,

I am looking at the Nashville, TN market as I am looking to buy a single family detached townhouse and/or a non-townhouse property as a long term investment to rent it out.  I am seeking advise as I do not live in Nashville to understand better if Nashville has:

1) A good rental market?

2) A strong tenant population with responsible tenants (class A) who rent long term?  Can I expect class A tenants and if so in what areas?  I have been looking at various areas including Green Hill, Melrose and Sylvan Park?

3) A strong appreciation potential?

I am also looking for:

1) An excellent property management company that doesn't charge fees to find tenants

2) A few excellent contractors / handymen

If you have any inputs, thoughts or recommendations then please share them.  Appreciate it!

Thank you,

Andrew

Katherine Hite · Answer

Hi there Andrew! Welcome to the Music City market! My first question is are you looking for short or long term rentals (I know you said you want to keep the properties long term). I am a Realtor in Nashville specializing in the city's core neighborhoods. I work with a lot of newer investors as well as first time home buyers so I have a great idea for who wants what and where it is! Nashville has a fantastic market for both short and long term rentals! With around 70 people moving here a day there is a high demand for rentals in the city and affordable rentals at that! The influx of over 5,000 jobs this year is set to raise the rental rate by $300! Even without all the locals, Nashville has one of the strongest tourism industry's in the country even surpassing Las Vegas as the bachelor/bachelorette party capital! The city has begun to regulate short-term rentals (e.g. Airbnb) which is good for the investors and our citizens! If you're looking for long-term rentals + appreciation I would keep an eye on our up-and-coming areas like: TSU/College Hill (37209/37208), Buchanan Arts District (37208), Buena Vista (37208), McFerrin Park (37207), WeHo (37203), Woodbine/ Crieve Hall (37204)! I think I have a contractor as well, if you'd like that info just let me know! Good luck!

Andrew Mykletun · Answer

Hi Katherine,

Thank you for your response!  Appreciate it.

Best regards,

Andrew

Katherine Hite · Answer

Hi Andrew! I'm sorry for the delayed response, I had a crazy week/weekend and couldn't get on BP! Sylvan Park is a fairly strong, established neighborhood. Very quiet, lots of families, nice park, and easy access to multiple popular commercial/retail strips. Is this the best market/neighborhood/area for appreciation? Not necessarily (there are always those 'What If'/circumstantial properties). LTRs in that neighborhood could do very well for younger families, new to the area or college/grad/medical field students looking for access to all of the amenities of the city, located near Vanderbilt and several other large medical campuses. I am looking for the article that discusses the projection for this year. I am also just waiting on my boyfriend to give me the contact info for our handyman/contractor! Let me know if there is anything else I can help you with!

Alanna Schroeder · Answer

You can learn more about the STR regulations over at NASTRA (https://nastra.org).

Andrew Mykletun · Answer

Hi Katherine.

Thank you for the email.  I am looking to rent a property for a long term.  What are you thoughts on the Sylvan Park area for long term rental and appreciation?  Could you also provide me articles / information about the rental increase of $300 and regulations of Airbnbs, please?  Did this just happen?  If you have the contractor's information and you recommend him then please send it over.  Thank you!

Andrew Mykletun · Answer

@Lucas Carl Thank you for your reply.

A few clarification questions just so I fully understand your viewpoint.

I am not buying for cashflow.  If property is cashflow neutral with all expenses included, I am ok with that as appreciation is what I am looking for.  Cashflow allows me to stay in the game.

Any thoughts on my question on appreciation and "A strong tenant population with responsible tenants (class A) who rent long term?  Can I expect class A tenants and if so in what areas?  I have been looking at various areas including Green Hill, Melrose and Sylvan Park?"

Texas question - property taxes are too high to rentals are too much negative cashflow.  To that point, how do know how property taxes work in Nashville?  The last time they got reassessed I heard was back before the financial crisis, which sounds strange.   Do they get re-assessed yearly?

Thanks!

-Andrew

Luke Carl · Answer

@Andrew Mykletun you’re about 8 years too late. There’s virtually no way to cash flow here.

As for an excellent property manager that doesn’t charge fees to find tenants??.... that also doesn’t exist.

There are opportunities in Houston and San Antonio why is Nashville even in the conversation?

I’ve got a 3/3 I’ll sell you for 280k. Market rent on it is $1500. If you’re lucky you’ll only lose a couple hundred per month.

Nashville - good market to invest? Solid tenants/ appreciation?

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