If you’re planning on investing in the Nashville real estate market this year, check out this blog first. You want to ensure a successful investment with a high ROI so find out which neighborhoods hold the most profitable Nashville investment properties. First, we’ll give you a summary of how the Nashville real estate market is looking on the city level (according to Mashvisor’s investment property calculator).
Nashville Real Estate Market Forecast
- Median Property Price: $426,228
- Price to Rent Ratio: 21
- Average Days on Market: 66
- Monthly Traditional Rental Income: $1,707
- Traditional Cash on Cash Return: 2%
- Monthly Airbnb Rental Income: $3,280
- Airbnb Cash on Cash Return: 5%
- Airbnb Occupancy Rate: 53%
After recent years of dramatic gains in the Nashville real estate market, it seems to have begun cooling down. With that being said, it still remains one of the most desirable regions in the Tennessee real estate market. Even though the market is slowing down, as you can see, home prices aren’t drastically dropping. This downturn shouldn’t be looked at as bad news, quite the contrary actually; it’s a healthy correction that is bringing some balance back to the Nashville real estate market.
We’re seeing steady figures for average rental property performance in the Nashville housing market. Both traditional (long-term rentals) and Airbnb (short-term rentals) strategies are showing strong returns on the city-level, but we will definitely see a better reflection of property performance once we break down the market to specific neighborhoods.
Best Neighborhoods in Nashville for Real Estate Investing
We’ll break down the list according to rental strategy. Some neighborhoods are better for traditional rental property investments, while others are better for short term rental property investments. We will also discuss Airbnb regulations and cover how they affect short term rentals in the Nashville real estate market.
Best Neighborhoods for Traditional Rentals
Montogue
- Median Property Price: $219,633
- Price per Square Foot: $157
- Price to Rent Ratio: 11
- Monthly Traditional Rental Income: $1,750
- Traditional Cash on Cash Return: 4%
Pennington Bend
- Median Property Price: $232,450
- Price per Square Foot: $154
- Price to Rent Ratio: 11
- Monthly Traditional Rental Income: $1,759
- Traditional Cash on Cash Return: 4%
Shephardwood
- Median Property Price: $323,300
- Price per Square Foot: $197
- Price to Rent Ratio: 13
- Monthly Traditional Rental Income: $2,043
- Traditional Cash on Cash Return: 4%
Pinnacle Point
- Median Property Price: $190,900
- Price per Square Foot: $110
- Price to Rent Ratio: 14
- Monthly Traditional Rental Income: $1,163
- Traditional Cash on Cash Return: 3%
Related: Traditional Rentals: Finding Income Properties Using a Heatmap
Best Neighborhoods for Airbnb Rentals
Before we list the top performing locations in the Nashville real estate market, there’s one important thing that needs to be covered- Airbnb regulations.
Is Airbnb Legal in Nashville?
Nashville real estate investors considering an Airbnb investment need to keep track of the rules and regulations the city has set on short term rentals. There are a couple, but the most important thing is that your rental property must be properly zoned. Your neighborhood and HOA (Homeowner’s Association) must also both allow short term renting and you need to get a short-term rental property permit, which comes in two types: owner-occupied and non-owner occupied.
A non-owner occupied permit is what real estate investors need to obtain. To be approved for one, your investment property must be in a properly zoned non-residential district. It shouldn’t be a primary residence, and it must be in a neighborhood or homeowners association that allows short term renting. For more details on short term rental regulations in the Nashville real estate market, click here.
Related: Is Airbnb a Good Investment Considering All of The Regulations?
Now that you know what to look out for regarding the law, we’ll now tell you where you can find the most profitable Airbnb Nashville investments after using Mashvisor’s Airbnb calculator.
Heritage Meadows
- Median Property Price: $276,025
- Price per Square Foot: $125
- Price to Rent Ratio: 15
- Monthly Airbnb Rental Income: $6,499
- Airbnb Cash on Cash Return: 14%
- Airbnb Occupancy Rate: 53%
The Woodlands
- Median Property Price: $194,780
- Price per Square Foot: $110
- Price to Rent Ratio: 12
- Monthly Airbnb Rental Income: $3,195
- Airbnb Cash on Cash Return: 10%
- Airbnb Occupancy Rate: 59%
Nashboro Village
- Median Property Price: $224,360
- Price per Square Foot: $159
- Price to Rent Ratio: 16
- Average Days on Market: 36
- Monthly Airbnb Rental Income: $3,673
- Airbnb Cash on Cash Return: 10%
- Airbnb Occupancy Rate: 56%
Elizabeth Park
- Median Property Price: $281,513
- Price per Square Foot: $203
- Price to Rent Ratio: 24
- Average Days on Market: 157
- Monthly Airbnb Rental Income: $3,766
- Airbnb Cash on Cash Return: 9%
- Airbnb Occupancy Rate: 58%
JSH Neighborhood Club
- Median Property Price: $269,475
- Price per Square Foot: $194
- Price to Rent Ratio: 31
- Monthly Airbnb Rental Income: $3,658
- Airbnb Cash on Cash Return: 9%
- Airbnb Occupancy Rate: 50%
McFerrin Park
- Median Property Price: $273,833
- Price per Square Foot: $268
- Price to Rent Ratio: 20
- Average Days on Market: 177
- Monthly Airbnb Rental Income: $3,543
- Airbnb Cash on Cash Return: 8%
- Airbnb Occupancy Rate: 61%
Do you have a free Mashvisor account? Use our Property Finder to find homes for sale in Nashville, TN that match your criteria in a matter of minutes!
Why You Should Invest in the Nashville Real Estate Market
What’s making Nashville investment properties so profitable? Well, there are a couple of things that could answer that question. Here are some key factors that could explain this.
- Although the market has cooled down to a neutral state, home values are still going strong. According to Zillow, Nashville home values have gone up 7.0 percent over the past year. The Nashville real estate market ranked at number 8 for Zillow’s hot housing markets (which is based on places where home values and rents are expected to outpace the nation).
- Probably one of the best things about Nashville is its job market. In 2018, Nashville had the lowest unemployment rate of any metro area with a population exceeding 1 million. People will always be found where work is found, and that’s a big factor behind high demand in the Nashville real estate market.
- Nashville landlords have their backs covered because Tennessee is landlord friendly. It’s always important to see which side the law favors, as this can affect how smoothly things work out regarding late rent and evictions.
Related: Why Nashville Investment Properties Are Hot
All in all, the Nashville real estate market is a solid investment opportunity, and you can’t go wrong with owning a rental property there. The economy is strong, the market is stable, and the returns are high. If you want to ensure that you find the best investment properties, use Mashvisor’s tools. To start your 7-day free trial with Mashvisor and subscribe to our services with a 15% discount after, click here.