Investor · Buffalo, NY · Member since 2021 · 10 posts · 2 votes
Hey BP,
We're not in the Nashville area right now, but interested in at least one STR property in East Nashville. I've read that Nashville can be a tough nut to crack. Can anyone share their experience?
I had a really long post about my experience in Nashville STRs. I wish I knew how to find it....maybe if you search my profile or some keywords?
Anyway....
I ran an STR out of East Nashville for several years and have had several of my investor friends do the same. We have since all sold our properties and gotten out of it. The Nashville climate for STRs is very unfriendly. If I could name one area that is the most unfriendly for STRs....it's most definitely East Nashville. The neighbors will report EVERY single little thing they can think of, and they will post it on the East Nashville facebook page where they will get every member of the group to comment on how STRs need to be shut down entirely.
With that being said....
There are really only two ways to run an STR right now in the area. Either be an owner occupant of the property, or do it in areas that are specifically zoned for allowing STRs.
I have worked with several investors that have looked at STRs in the Nashville area and I have walked them through every detail of the process. From finding a property, getting a permit, an inventory list of things needed, etc.
Any property that allows for NOO STRs is going to come at a premium. A pretty large one at that.
I don't mean this post to be discouraging...I would rather you have the RIGHT information before making a decision.
If you want to talk more I'd be happy to get on a call with you. I know of several NOO STR opportunities in the area and I have run STRs myself so I'm familiar with the whole business.
If you plan on doing NOO STR make sure you do thorough research on zoning. I was able to acquire a property last year, luckily with the killer rates the number made sense. The price of the house was 715K and spend another 30K updating furniture and other repairs.
I live in California, so having a good property manager is key and so far I’m happy with how things are going. Jan/Dec we’re slow but been booking every weekend almost thru July with some already for October.
East Nashville has many developments in the works, including the Oracle campus so I think it has increased the demand and price quite a bit.
Investor · Nashville, TN · Member since 2009 · 483 posts · 228 votes
4y
As @Christian Espana said having a good property manager is key. I do STR property management here in Nashville and can help with getting permits and managing the unit. DM me if you want more info.
Investor · Buffalo, NY · Member since 2021 · 10 posts · 2 votes
4y
Thanks guys, when we're on the ground looking at places I'll look forward to connecting. What about investors out there? Aside from the sage advice to have good PM on the team, what have you investors found as pros and cons of the area? Thanks, all! Really appreciate the feedback.
As @Christian Espana said having a good property manager is key. I do STR property management here in Nashville and can help with getting permits and managing the unit. DM me if you want more info.
Since our rental is zoned RS, we cannot do NOO STR but I was curious if terms greater than 30 days still require a permit to operate on AirBnB etc.? Thanks!
Real Estate Agent · Nashville, TN · Member since 2021 · 3 posts · 2 votes
4y
Hey Steve!
I work with a lot of investors in Nashville and have a new construction STR under contract in East Nashville. They're actually doing a pre-sale for condos on May 18th starting bid at $295k. Let me know if you'd like to chat about those specifically or just the Nashville STR scene in general!
San Francisco, CA · Member since 2017 · 26 posts · 38 votes
4y
I bought a SFH in Manchester, TN in 2016 through the group called "Simply Do it" out of California. They hooked me up with Fred Cosgrove of Stones River Property Management. They helped me with the purchase and have been the property manager for the property for the past 6 years. Highly recommend. Fred is awesome and the team at Stones River is great. I've seen great appreciation on the property as well as good cash flow. I have 9 other properties and 16 units total and this manchester property is by far the easiest to manage of the bunch. I never have to do anything. They take care of it all.
Investor · Washington, DC · Member since 2017 · 428 posts · 205 votes
4y
As others have mentioned, you have to be careful about zoning in order to legally operate your short term rental - the city cracked down a few years ago on STRs in residential neighborhoods, so from my understanding if you’re buying something that wasn’t grandfathered in (and you’re not an owner occupant) then you pretty much will have to buy something on mixed use or commercial zoning, which will impact your financing options. Happy to chat if you have questions about how that impacts your financing option, or if you are looking for additional resources locally I know a few good agents I could recommend.
I had a really long post about my experience in Nashville STRs. I wish I knew how to find it....maybe if you search my profile or some keywords?
Anyway....
I ran an STR out of East Nashville for several years and have had several of my investor friends do the same. We have since all sold our properties and gotten out of it. The Nashville climate for STRs is very unfriendly. If I could name one area that is the most unfriendly for STRs....it's most definitely East Nashville. The neighbors will report EVERY single little thing they can think of, and they will post it on the East Nashville facebook page where they will get every member of the group to comment on how STRs need to be shut down entirely.
With that being said....
There are really only two ways to run an STR right now in the area. Either be an owner occupant of the property, or do it in areas that are specifically zoned for allowing STRs.
I have worked with several investors that have looked at STRs in the Nashville area and I have walked them through every detail of the process. From finding a property, getting a permit, an inventory list of things needed, etc.
Any property that allows for NOO STRs is going to come at a premium. A pretty large one at that.
I don't mean this post to be discouraging...I would rather you have the RIGHT information before making a decision.
If you want to talk more I'd be happy to get on a call with you. I know of several NOO STR opportunities in the area and I have run STRs myself so I'm familiar with the whole business.
Developer · LA, Nashville TN · Member since 2015 · 295 posts · 75 votes
4y
@Steve Kiernan The proformas I see from builders selling NOO STR are ridiculous in my book. The problem with Air DNA and platforms is they show you gross bookings. You have to shave off 30% for taxes and platform fee's. Currently in Nashville there are no Residential allowed NOO STR so make sure it's commercial zoning. Lastly, I have no idea when STR's will reach a saturation point in Nashville with how many there are and are coming online. To give you perspective, I STR out a SFH 10m from DT and it grossed 75k after platform fees and hotel taxes. Another 25k for clean maitenance expenses. So it is much better than a standard rental. I self manage though. If I were to cut out another 18% it wouldn't be worth the extra few dollars at all because furnishing costs wouldn't get repaid for 4 years.
If the house price doesn't make sense using long term rental comps, DSCR of 1.1+, doesn't make sense to buy to me. Your return on equity should not be in line with long term rentals.
Rental Property Investor · Orlando, FL · Member since 2018 · 64 posts · 54 votes
4y
I'll be moving to TN this summer and was looking to do STRs in the area as well. If Nashville is so difficult with STR restrictions, are the surrounding areas seeing any popularity like Hendersonville or Clarksville? If there are far less restrictions but it's still close enough to Nashville, it may be more worth it as long as a comparable property isn't as expensive? I know it's not the same as downtown Nashville in terms of location desirability but the properties are likely to be a lot cheaper on the outskirts as well.
Real Estate Agent · Nashville, TN · Member since 2021 · 3 posts · 2 votes
4y
Hey Jacob,
Yes, the STR regulations are a lot less strict in Clarksville and there is actually a decent amount of Airbnb activity there due to the nearby army base with families visiting. Hendersonville has Old Hickory lake which could be desirable for STRs in the summer/fall. The restrictions there are also a lot less strict. The STRS in those area will still be more expensive than non-STRs with the same specs. Let me know if you need any help.
@Steve Kiernan There is an awesome market for STR anywhere around Nashville. As most other people have said there were major changes with permits and in January this year they voted to not permit NOO STR in residential areas. So you can do mixed use or commercial. East Nashville is an amazing area but very expensive. Most STR people will want to be close to down town. East is a great option, if you could get a condo downtown even better. You could even do north Nashville around Trinity. I work with investors and have seen many have very successful STR's in those areas. The biggest cashflow would be immediate proximity to downtown. However there is great potential all over middle TN. The housing is also more affordable in some other areas and other counties immediately surround Nashville that do not have the same permit issues as Davidson county (Nashville). Let me know if you want to chat more about other areas or have any specific questions.
As @Christian Espana said having a good property manager is key. I do STR property management here in Nashville and can help with getting permits and managing the unit. DM me if you want more info.
Since our rental is zoned RS, we cannot do NOO STR but I was curious if terms greater than 30 days still require a permit to operate on AirBnB etc.? Thanks!
Hi Jeremy, usually mid term rentals (30+ days) require no permit. You can deep dive your specific neighborhood/county, but that's how it is in Los Angeles which is one of the most regulated STR areas.