Where in Nashville to invest?

[Dave Madoch]

Hi All, 

My wife and I are moving to Nashville, TN in January to find our next investment and to try a different city. We are actually here now exploring. 

The ideal situation would be find a SFH with an ADU. We would live in SFH and airbnb the ADU and then Airbnb the SFH as well while we are traveling. Since this would be an airbnb the house would need to be somewhat walkable to restaurants, bars, stores.

Of course 12 South is one of our favorite places but at a quick glance it would be difficult to find a property that would cash flow or even make sense, but I could be wrong. 

The Nations would seems to be a great investment opportunity but I would be concerned about flooding being that close to the river. 

Any thoughts on these 2 neighborhoods? What other places should we check out? We have visited Germantown, East Nashville, The Nations, 12 South, Downtown, Hillsboro, Sylvan Park

[Luka Milicevic]

@Dave Madoch

What part of Chicago are you in? I worked there every summer during college as a tennis pro at the country clubs on the North Shore.

Depending on what your budget is will mostly dictate your location and property type…as I’m sure you already know.

In the past few years, Nashville added an overlay to certain neighborhoods allowing DADUs to be built by the owners. The caveat here is that for DADUs specifically, you can’t “self-permit” the build. You would have to get a GC to do it for you and that can get rather expensive.

That is one area to look into if you’re interested in getting a true DADU. There are tons of neighborhoods that allow for it now. Kind of hard to search for though.

12S is not “difficult to find a property that cashflows or makes sense” it’s impossible….unless of course you are putting down 80% - then anything can cashflow. 12S is not a neighborhood you buy into unless you actually want to live there. At that point, it’s the BEST place to live. I had a client looking for the exact same thing as you this year and the entry price for a single fam with DADU in 12S was $1.5m, and that wasn’t true 12S it was more so on the outskirts.

Nations – I would not worry too much about being close to the river. Parts of the Nations are in a flood plain, but even that doesn’t concern me. It’s really around Morrow rd and the bottom of Marilyn Rd that are in actual flood zones. The reason I’m not concerned about that is because the houses are all built above the base flood elevation. If you look at the new homes on those streets, they are all sitting high on blocks. The last deal I was looking at on Morrow rd had a flood insurance quote of $500/ year and the lender didn’t require it.

Very popular amongst young working professionals. Close to downtown with easy access via I40. The area between 51st Ave and Centennial is absolutely exploding with new commercial developments bringing new resteraunts and shopping to the neighborhood. You can walk to just about everything if you are in the Nations area.

Germantown – great location. My favorite spot. Expensive, of course. I showed several houses there this year with DADUs. None of them were STR eligible unfortunately – even as an owner occupant due to zoning restrictions. The only one I looked at that was eligible was priced at $1.1m. I love the location though.

Sylvan park – probably my second pick after Germantown. It’s a higher end, more convenient version of the Nations. Walking distance to everything you need. Very convenient to downtown via Charlotte Ave. I don’t think there are any properties eligible for what you are looking for. Excellent place to live as a true owner occupant. Charlotte Ave is getting something new every day.

I could honestly go on all day about every location in Nashville – this is just scratching the surface. Depending on your budget there is an STR strategy specific to Nashville that sounds like it might be a good fit for you. I can discuss more in depth on locations and STR regs if you'd like.

Happy hunting!