Given how expensive the Nashville market is right now I am entertaining other ideas for better cash flow. One of these is rent-by-the-room. During my research I discovered a big market opportunity for this in my area. Facebook has many groups ( Rent Nashville for example) where people are subletting (or house hacking) their residence, especially in the metro area. Facebook is also flooded with individuals moving in from other areas and marketing themselves in order to find a room for rent. I have seen other investors create extra bedrooms, or build room additions just for this purpose. 

Here is the rub... Nashville-Davidson County will only allow up to three unrelated adults in a dwelling, regardless of how many bedrooms there are. 

My question is not weather or not this is a good strategy. My question is are these individuals, investors or otherwise, ignoring the limitation or is there some loophole? If they are ignoring it, is it worth the risk? What is the deal here? If it is not allowed than why are there so many people doing it anyways?

Shed some lite on this topic if you can! Thanks!