What is your view on starting rental property investing in Nashville, TN?

Question

Hello,

I recently graduated from college and am moving up to Nashville for work. I have no experience in buying or maintaining rental properties and a small savings. A relative lives there now and has a few units giving a regular cash flow but they say the market is over saturated. What is your view? Is starting there worth it? Would it be better to start a little outside the city?

Thanks.

-Marco

David Goodman · Answer

You don't have to invest directly in Nashville/Davidson county to benefit from the Nashville Market. Our market extends beyond Davidson county into the different orbiting suburbs. The best way to get started here (or anywhere) is to start by purchasing your own primary home because it's easier to qualify for the loan and it gives you a chance to build equity and you can purchase more house with a lower down payment. Rent out rooms while you live here. Rooms for rent for $1000 or less are in high demand. If you can't afford Nashville proper, my next suggestion would be to check out one of the university markets orbiting Nashville. Murfreesboro (MTSU) and Clarksville (Austin Peay).Hope that helps

V.G Jason · Answer

Nashville is hardly saturated as an investor. Rent prices aren't skyrocketing like '21-22, but there's limited vacancy, solid prices. The apartment side has provided some competition, but if you've got a solid size house you'll do fine.I'd say it's been slightly above average for my year 2 leases compared to my other cities. 0 turnover, all slight-moderate increases, very good tenants.

John Williams · Answer

I am biased but I would recommend starting outside the city where you can find stronger rent-price ratios. Markets like Clarksville, TN have much more favorable balances of cash flow and appreciation. -John Williams, Property ManagerClarksville, TN

Jamie Jones · Answer

Hi Marco,Congrats on the college graduation! My advice is to crawl before you walk. The easiest way to get into real estate is to buy a home for you to live in. You will find much easier and cheaper financing options and can get into a home with as little as 3% down (and depending on your income, potentially no money down). If you can find a duplex that doesn't need a ton of work, great, but any single family/townhome will work. If you are single, look at renting out any extra bedrooms. This will help cover your mortgage payment, and free up more of your cash that you can use to buy your next property. After a year or two of living below your means, you should have some ample funds (due to your roommates covering your housing payment and money saved from your job) to go out and buy another home to live in. Repeat this process a few more times, and in 10 years time you can have 4-5 properties in a high-growth area.

Marco Torres · Answer

I have been told there are just too many large investors that have a ton of money to play with. Thanks for the advice! Seriously motivating. I will focusing on house hacking my first property! I will be looking into these areas.

Marco Torres · Answer

Thank you Jacopo! I will keep this in mind. I am trying to absorb as much as I can before the move in the next few months.

Luka Milicevic · Answer

@Marco TorresWelcome to the forums. I'm in the Nashville market. I'm curious what they mean by over saturated? Over saturated how? Too many rental units? Too many houses? Too many investors? Too many lenders?As a recent college graduate, I'm going to assume that you're not able to throw money around and put massive down payments on homes. I would suggest looking into a low down loan, preferably conventional over FHA. You will have mortgage insurance, but at least you'll be in a house with a low down payment. From there, I would house hack - rent as many rooms in the house as you are able to. Boom - you just got your start. In terms of areas, I would look west towards Bellevue, Pegram, Dickson. SOuth as far as Columbia. Get yourself in the more affordable areas and get your house hack going

Jacopo Iasiello · Answer

Hi Marco, congratulations on graduating and your upcoming move to Nashville! Before making any investments, spend some time learning about real estate investment. Read books, take online courses, and join local real estate investment groups. Networking with other investors and professionals in Nashville can provide you with firsthand insight and advice.