Brainstorming Creative House Hacking Scenarios in Nashville / Middle Tennessee

[Laura Winegardner]

Hello Bigger Pockets Community! I’m a Nashville renter hoping to start my real estate investing journey sooner than later. I’m on a mission to create accessible spaces that help people develop/deepen their human connections and live more fulfilled (and fun!) lives.

My 10-year goal is to own and operate 2-4 short-term rentals in lake-based vacation destinations and provide add-on hospitality services to further my mission and cash flow. Now how to get there is where I would greatly appreciate some guidance/feedback to help focus my learning and analysis!

House hacking+STR is the entry strategy I'm exploring. I have $40K capital available today and I'm able to put $3K/month towards mortgage, insurance, expenses, etc. A $20-30K private loan from a family member may be an option if needed.

My near-term goal is to get hands-on experience as an STR owner/property manager and begin building my network of real estate pros, vendors, and fellow REIs. I'm single and have W-2 fully remote career so I have quite a bit of flexibility. Here are a few scenarios that I’ve been playing around with:

Scenario 1: Buy a Nashville property with two separate living spaces (e.g. primary space + basement/attic/adu with separate entrance). Live in the accessory space and STR the primary space. Assuming it will need to be owner-occupied to STR, if I need to move out within 2-5 years I'd transition to MTR or LTR.

• Pros: Least disruptive to my current lifestyle, gaining experience in a vacation destination aligns with my long-term goals
• Cons: Highly competitive and expensive market, NOO STR is very unlikely for my situation, finding a property in an area that's appealing to tourists may be difficult.

Scenario 2: Buy property in a market adjacent to Nashville without owner occupancy requirements for STRs (e.g. Mt Juliet. Live in the property for one year while periodically renting out as an STR when I'm out of town/staying with friends. Transition to a full-time STR after moving out. Return to renting for my primary residence in Nashville.

• Pros: Ability to NOO STR, more affordable, less competition
• Cons: Not a vacation destination, lifestyle disruption for a year, added cost of rent after moving out

Scenario 3: Buy a property on/near a lake 90 min or less from Nashville (e.g. Center Hill Lake or Tims Ford Lake). Live in the property for one year. Rent it out as an STR when I'm able to be out of town/staying with friends. Transition to a full-time STR after moving out. Return to renting for my primary residence in Nashville.

• Pros: Ability to NOO STR, allows me to get started on my long-term goal of owning a lake property sooner rather than later
• Cons: Limited inventory, lifestyle disruption for a year

I have a lot to learn and welcome critical feedback and insights from this community. I’m open to all creative ideas that align with my goals. Thank you for helping me to get started!

[Luka Milicevic]

Hi @Laura Winegardner welcome to the forums and congrats on taking your first step. 

I think that no matter what option you go with you will find success if you manage it properly. 

I would caution scenario 2 for a few reasons. Wilson county's STR regulations have been described as a "moving target". They are very much still figuring it out. There aren't all that many STRs right now, but Wilson county is EXPLODING in growth at the moment and down the road they might revisit their NOO eligibility. That's just a guess - right now it falls under the same regs as bed and breakfast.

Scenario 3: I don't think this would give you the hands on experience you need to manage in future. If you're only scheduling bookings when you can stay with friends how much would you really be scheduling? I mean is this every weekend? Once a month? 

The first scenario is the one that I would go with. That's what many of my investor clients have pursued and it has worked out for every one of them. Buy a property that has a separate living space/area and live in the smaller section (Basement/DADU) and then rent the main house/living space. 

Like I said, any strategy you go with is going to be great for you if managed properly. Go out there and take action!