Short Term Rentals
Investing in Short Term Rentals (STRs) has become a booming segment of the Nashville real estate market. But it’s also a complicated segment. In 2017, the metro council voted to disallow new non-owner occupied STR permits to be issued in neighborhoods with R and RS zoning. R and RS zoning encompass the bulk of residential Nashville neighborhoods. The majority of single-family homes in Davidson County fall under one of these zones. However, there was still a huge demand for STRs in our city.
After the rules change, developers began a large-scale undertaking to build new products, products specifically designed to fill the void. Generally, these are multi-family condos and townhomes that specifically allow short-term stays under their charters and bylaws.
Most folks don’t realize that you can’t simply buy any old condo and then rent it out for short stays. By default, almost all HOA rules state that tenants must sign a lease for a minimum of six or twelve months. This is why you don’t see STRs in downtown highrises like Viridian, ICON, and Encore. It simply isn’t allowed under the rules of the HOA.
There are a handful of older condos that altered their original bylaws to specifically allow STRs. Riverfront Condos, The Quarters, Studio 1 and a few others, but they come to market infrequently and often trade off-market privately.
But if you have a bit of time on your side, there are several new projects on the horizon. We track this space and created a simple map that you may find helpful. Be sure to open the key arrow at the top left of the map to see categories.
Also of note, financing in developments that are mainly investor-owned can be a little tricky. Some developments will have in-house lenders and others may require a commercial or portfolio loan.
If you are considering investing in the Nashville STR market, we’d be glad to be your representative. Contact us or give James a call at 615-482-5244.