Newbie in Nashville - Long Term Rental CoC Benchmark?

[Crystal H.]

We are looking to invest in Nashville or the surrounding area rental properties (long term rentals) The objective is to hold and create cash flow.  We can either pay cash 100% for the rental or finance it, looking to keep purchase price under $300k. 

What range of CoC return do those of you doing Long Term Rentals in Nashville typically see? Any areas of town I should be gravitating toward? Tips? :)

[Luka Milicevic]

@Crystal H.

I'm quite active in the area and can help you out with specific questions if you have them. 

The biggest issue right now is that rents have not kept up with the incredible appreciation Nashville has had. Rent to value and COC returns have dropped as a result of the appreciation in the market.

I wouldn't bother much with Williamson county. It's mostly class A residential, owner occupied. There are some pockets of homes you can get for your price range, but you are better off looking somewhere else. 

In terms of Davidson, look at 37218, 37216, areas of Madison, certain pockets of 37207, further west towards Dickson.

Nashville is an appreciation play right now. If you're looking to park money then by all means it's a good market, but for pure cash flow it's not the best play. 

If you can pay 100% cash, then do it. It will put your offer further ahead in this market