STR Newbie Introduction

[Robert Willard]

Hello forum!!  New guy here.

I recently have started looking into doing a STR in the Nashville area. I live in Ohio but I find Nashville appealing for many reasons. This would be our first investment property and I am a little nervous of course.

I find this an odd time to be getting into the industry.  While interest rates are low, prices are high and real estate is hot right now.  Throw in that travel is bad and Covid is on the rise and I find myself asking "what the hell am I thinking?"

That aside, I am wanting to create another income stream and I find STR to be as safe of an investment as possible. Assuming I find a place that appreciates and things get back to normal-ish. I gain re-occurring revenue and a very valuable asset.

So what am I missing? Any advice to a first timer looking to get into STR's? I am trying to do as much research on this as I can. It is a big decision and I want to make sure I make a smart one.

[Luka Milicevic]

@Robert Willard

1-The city of Nashville is on a mission to shut down ever STR in residential zoning. They continue to keep adding bills to try and eliminate them in all residential zoning. If you get one before they eliminate them, you will be grandfathered in. What that means is if you have an existing permit, they will look for other ways to shut you down. Grass two inches too tall? Permit=revoked!

2-This brings us to commercial zoning. For your numbers to work-you will either need to build a large enough complex or get the land dirt cheap. Dirt cheap commercial land in Nashville does not exist. Owners of commercial know there is a demand now for STR seekers and they have priced their precious assets accordingly.

3-I do accounting work for a prop mgt company that manages STRs. Two things have happened during this pandemic. Most owners have sold or converted their properties to LTRs. Second, the existing ones are not doing so well.

STRs are also EXTREMELY expensive to operate. People don't realize this, but there is so much cost involved to keep these things going! 

This post is not meant to be discouraging. I'm not someone that's trying to sell something to you and so I don't have to sugar coat anything and tell you "it's not that bad". This is my experience from someone that is on the ground and very involved in the market.