To Build or Not to Build

4 Replies

Hello all! This is my first bigger pockets post but I'm excited to hear what y'all think. Here's the deal:

I recently bought a house in East Nashville with investment in mind. I'm currently living in the house. It is zoned industrial residential. It's a small 1200 SQ ft house on a .3 acre corner lot. The house itself is in good shape but I may do some small things to make it look cooler (already installed 12 recessed lights myself). Here's my question:

I liked the house because of the space available to build. I want to build a garage apartment combo to get the most out of the available space. I'd like to do most of it myself to keep costs down. It seems that all zoning and setback rules will allow this.  I'd like to Airbnb the house and apartment after all is said and done and hopefully generate some good income. My main concern is the fact that the railroad is in very close proximity. I'm afraid that after all the time, effort and money I invest into building, I won't be able to make the money I'd hope to make. Can anyone offer some advice whether general investment risk or offer some similar experiences? Thanks so much in advance.

- Jimmy

Couple of things: Nashville requires you to have a permit to operate an airbnb and you need to pay hotel tax to the city. There is a fine if you don't do this and the city finds out (they search for this). Because you live on the property, I believe it will be easier to get the permit. 

Ok so now about the RR. That isn't such a big deal. People will still rent out the property. I have an airbnb near a RR and people don't seem to mind too much (train only goes by around 9am and 9pm in my case. Just know that having an AirBnB is a lot of work. Someone needs to clean it--as clean as a nice hotel room. Someone needs to wash the sheets, towels, stock the shampoo, conditioner, soap. Someone needs to take the reservations, communicate with guests, and keep the calendar updated. You may realize that finding a tenant for the upstairs apartment is less headache and more money in the long run. 

The only reason that I AirBnB my property is because I actually live there part of the year. If I never used that unit personally, I would just put a tenant in there instead. Hope that is helpful. :)

@Jimmy Silcox

Welcome to the forums. 

You can get a type 1 owner occupied permit and shouldn't have an issue doing an airbnb. In terms of what you can build-that depends on what zoning allows. Just because it falls in the setbacks doesn't mean all that much. 

You are talking about a "utility house" which is different than an actual house. 

Keep in mind if you are planning on building something that small, lets say the size of a garage. If zoning approves it and you decide to do the work yourself your cost will be just materials, right? Well, assuming you do it the way you are supposed to and pull a permit, you can add $10k to your cost because you are going to have to put in a sidewalk now. Utilities will also have to be buried. 

On your small structure, you are already in for $10k and you haven't done anything yet. 

There are folks that are trying to do kitchen renovations (not investors) that are having a hard time bc the city is requesting they put in a sidewalk. Does that sound absolutely absurd? It is.

So your small structure might not be economically reasonable.

If you do decide to build an actual second dwelling, I recommend reaching out to @Josh Braun of Torque Development. They can hook you up with a good quality build.

let me know if you have other questions. 

Google "Taylor Made Plans" and go to Taylor's website. Request a quick phone call consult and she'll tell you what you can expect to pay to build the utility workshop and if she thinks you could build a shed/apartment. 

The zoning may be industrial but land use and other factors will determine whether you can build an additional dwelling, whether that is a house, garage apartment, w/e. If you want it to be hooked up to sewer and city electric legally, Luka is right - you'll need to pull permits and then you'll get hit with sidewalk fees. 

Just go to codes and ask if you can build an additional dwelling. It'll probably take an entire day of your time but that's how you find out for sure. 

Thanks, all, for the good info!  I plan to head into metro codes in the coming days just to see what I can and can't do.  I know air bnb can be a pain in the *** but I'm willing to give it a try for a little while.  I can always rent full time if I think its too much work.  With Nashville outlawing airbnbs in residential zoned areas, I thought I might have a good opportunity to make some money since my house is zoned industrial.  There might be more demand for cheap housing that way.  Someone I ran into recently thought it might be a smart idea to build a small recording studio as well...something for me to think about.  

I did not know about this requirement to build a sidewalk.  That does sound ridiculous...especially for my street that doesn't have any sidewalks...!??  It would look ridiculous. I'll see what codes says about this.  

Again, thanks very much for the info, this is exactly what I was looking for.  

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