Investing in Nashville – The 101!
Thinking of jumping in and getting a piece of the Modern-Day Gold Rush? Nashville is consistently ranked in the top 10 most profitable cities to invest in Short-term rentals in the country and is growing. Music City is the bachelorette capital of the country, and a steady stream of events like the NFL Draft, CMA awards, and countless conventions keep occupancy rates HIGH, 71.3% for 2019 to be exact.
Try counting the cranes in Nashville next time you're a passenger driving down 40. Don't count and drive, please; it's hard enough to move around town! No doubt, the supply of short-term rentals and hotels alike is going to continue to increase in the coming years. Most estimates put supply change around a 2% increase for the next 2 years, with market demand hovering around a 1.7% increase over the next 2 years. With supply only surpassing demand by .3%, the average nightly rates should stay steady over the next few years. At an average nightly rate of $221 in 2019, well over the $150 a night for average nightly hotel rate, there should still be a substantial profit margin for anyone who wants to jump into the short-term rental industry.
That being said, it's not all roses and butterflies. The days of listing your college futon of your Hip East Nashville loft are long gone. If Airbnb is the lock to opening up a 2nd income scream for you, then your property's zoning would be the key to unlocking the door. The city has laid out/continues to lay out new laws to which properties can be used as Short-Term Rentals, most of which revolve around the zoning of your property. If you're considering buying a property or turning a current property into a Short-term Term Rental, double and triple check directly at the source (Davidson County Zoning Office). If your zoning allows it, with the laws constantly changing, it is easy for even your realtor to provide false information, unknowingly of course.
Everything is going the way of the professional now, and your futon could be more professional. That said, it doesn't mean you need to hire a professional to manage your listing, but you will compete with the professionals. Nashville's high profit margins mean Short-term rentals are big business in Nashville. Several national chains operating 10s, if not 100+, short-term rentals in Nashville compete for that bachelorette party to book with them. Guests are not oblivious to this fact either. With more competition and higher nightly rental rates, guests expect all the professionalism of a hotel stay, just with the "Airbnb" flare.
Ultimately, there is still a lot of money to be made, and Nashville is still one of the best places to invest or turn an old property into a steady stream of sweet short-term rental income. There are countless tools, resources, and professionals that can help your property stand out and follow the ever-changing laws. Just remember to do your research, ask questions, and ask some local hosts or professionals for help!