Nashville Peeps!!! 12 South Rent!!!???

Question

Hey Everyone!!

I have an investor who is looking at a property in 12 South in Nashville. Very high end, just off the heart of 12 South. The property is in the 720-800k range. 3 bdrm, 3 bath. Big study and big rec room too. and 2 car garage. Could sleep a ton. Also, for additional cost, there is a studio apt above the garage.

Prime spot, great property. Question is, how much could this rent for? Would short term or long term rental be better??

Thanks in advance!!

Tom Shepard · Answer

@Chris Harris

I feel like this would have been a different conversation 5 years or so ago, but that ship has sailed.  The most optimistic of posts here won't cashflow at that purchase price.  I take that back.  Cash deal will cashflow but the COC or IRR will be too low for most any investor.  Also to consider that most of the appreciation in the 12 South area has happened.  May be a little more room, but crossing the $1MM barrier for a 3/3 even over there is unlikely anytime soon IMO.  Much better ways to spend $7-800k in and around around Nashville.

Luka Milicevic · Answer

The HBRs don't get rented. Once they are built they sell them. I spoke with one of the main developers yesterday and he said he sells 100% of his builds.

If the property is in the 720-800 range there is little chance it's going to cash flow.

Micah Copeland · Answer

If its high end and nice you can get way more than 1,500 rent for a 3/3 in 12 south. I would ask closer to 2500 to 3k a month. Still not a great cash flow area, but 12th south is a bonafide A class area.

If you build it out to sleep say around 10 people you could make a killing on Airbnb targeting bachelorette parties and such. I have a friend doing this and grossing a little over 6k a month.

Chris Harris · Answer

It would be a cash deal. Do people even rent out the new construction? it is an HPR.

Devan Mcclish · Answer

that's not a good place for cash flow whatsoever. The average rent in that area is 1500 for a 3 bed. Studio apartment would be better for air BnB at 50-70 a night.

70 x 15 nights (not going to stay rented every day) = 1,050 + 1,500 = 2,550

Even if you got a 1,000 a bedroom some how that's still a terrible investment

If he puts a mortgage on that house, negative cash flow either way after expenses. That area has older homes, so cap ex will be high. If he's paying cash, that's not a good investment.