Walkout Basement/Garage Apartment Nashville TN

8 Replies

I am actively searching for a deal here in Nashville. I'm throwing the idea of turning a walkout basement/garage into a loft style studio or 1 bed 1 bath. (Get rid of the garage doors, add wood flooring, kitchenette, etc.) then rent it or AirBnB it around the CMA fest to my wife. I am looking into the possibility of it but I'm not sure where I can find the legality of this type of conversion. Everywhere I'm googling and searching I'm not getting very straight forward answers. If there are any investors in Nashville that have toyed around or followed through with this same idea I would love to hear what you experienced and about where you found your information. Thanks in advance, Elijah.

@Elijah Radford Nashville is one of the hottest markets in the world. There are of course exceptions to this rule, but cash flow and Nashville do not mix. I’ve got 19 doors and gross over 200k per year with JUST my 5 STRS (which are not in Nashville) and live 1/3 of my life in Nashville. Look elsehwere. Memphis has cash flow. 

And hit the vote button ;) 

@Lucas Carl I have looked into Memphis and I like it but this specific idea I had would be me holding onto a property for the appreciation aspect of it. With Amazon coming to Nashville I'm predicting that houses will continue to inflate and I wanted a house to live in with a finished basement/in law suit anyway. So I'm planning on doing the remodeling regardless and I'm very interested in the legality of renting a space if it would help me live basically rent free while I hold onto and live in it for the foreseeable future.

My understanding is that you can still do owner occupancy in Nashville for Airbnb. Look up Nashville strp for permit requirements. 

@Elijah Radford

What you're looking for is out there and it's possible. It will be pretty tough to find at this point.

You are essentially looking for an existing house with a big enough lot that will either allow a DADU or can be split into 2 lots.

Honestly, I think your best bet is to buy some land in one the suburbs and build your own house that has an inlaw suite. 

@Luka Milicevic the suburbs sound great. I would love to do this in Clarksville, or Goodlettsville but the wife works in Franklin so I’m trying to keep her commute under an hour.

And since I work in north Nashville a suburb more toward the south sounds like the better situation, but as you get toward Brentwood or Franklin prices go up.

It’s a large balancing act.

As of right now, you are still able to gain an STRP both as owner occupied or as non-owner occupied, but there are certain restrictions on obtaining these permits. The most important thing to note with a non-owner occupied permit is the zoning of the property. I recommend looking for a DTC zoned property if pursuing non-owner occupied STRP.

Feel free to refer to these two guides for more info on requirements - 

https://www.nashville.gov/Codes-Administration/Short-Term-Rentals.aspx
https://www.nashville.gov/Codes-Administration/Short-Term-Rentals/Permit-Types.aspx

Also, David Frabutt works exclusively with STRP's in the Metro office and is a lot of help with specific questions you may have. I would recommend calling Metro directly and obtaining his email address.

3 quick notes - if you want to advertise for big parties for CMA, just note that you can only advertise a maximum of 12 guests per property according to Metro. Also, the supply of AirBNB listings are up 70% year over year, so plan on your rental incomes to decrease as more and more hotels and AirBNB operators increase the supply of accommodations and drive down prices. Lastly, the city has tried to ban all STRP's multiple times and has put freezes on all STRP requests multiples times in the last 24 months. The point being that even though you may be able to obtain a permit today, the legality of operating a STR in Nashville could change overnight, so always have a plan if something outside of your control takes away your ability to short-term rent.

Other than that, rent away! It's a money maker in Nashville!

Cheers!

Conner