Newbie in Nashville - Long Term Rental CoC Benchmark?

7 Replies | Nashville, Tennessee

We are looking to invest in Nashville or the surrounding area rental properties (long term rentals) The objective is to hold and create cash flow.  We can either pay cash 100% for the rental or finance it, looking to keep purchase price under $300k. 

What range of CoC return do those of you doing Long Term Rentals in Nashville typically see? Any areas of town I should be gravitating toward? Tips? :)

Under $300k for a sfh on the MLS in and near Nashville will likely be a large rehab project. You may want to look at townhouse or condo options.

My suggestion would be to put as much down as needed to ensure your property will cash flow. Appreciation will be there in the long term no doubt.

@Crystal Hadaway

I'm quite active in the area and can help you out with specific questions if you have them. 

The biggest issue right now is that rents have not kept up with the incredible appreciation Nashville has had. Rent to value and COC returns have dropped as a result of the appreciation in the market.

I wouldn't bother much with Williamson county. It's mostly class A residential, owner occupied. There are some pockets of homes you can get for your price range, but you are better off looking somewhere else. 

In terms of Davidson, look at 37218, 37216, areas of Madison, certain pockets of 37207, further west towards Dickson.

Nashville is an appreciation play right now. If you're looking to park money then by all means it's a good market, but for pure cash flow it's not the best play. 

If you can pay 100% cash, then do it. It will put your offer further ahead in this market 

Hi Crystal, like others said it's difficult to see good returns in Nashville right now for cash flow. If you push out from Nashville in all different directions, you can still find properties with 10% cash on cash return, but it is difficult to find them, especially with today's market. If you get creative you can find better returns (short term, rent by room, add sq. footage). 

Hi Crystal, like others said it's difficult to see good returns in Nashville right now for cash flow. If you push out from Nashville in all different directions, you can still find properties with 10% cash on cash return, but it is difficult to find them, especially with today's market. If you get creative you can find better returns (short term, rent by room, add sq. footage).