Are you already done with the New Year’s celebrations and ready to get back to work? Are you looking for opportunities to start making money in 2018? Then, the real estate investing business might be just the right choice for you. Real estate investments are one of the best ways to make money as they offer wide diversity of investment options for nearly everyone – from new real estate investors to the most experienced real estate experts – at relatively low risk compared to other investment types such as the stock market.
If you are at all familiar with the exciting world of real estate investing, you must have heard the word “LOCATION” one too many times. This is because real estate investments location is the key driving force behind profitability (making money) in this business endeavor. Thus, if you are thinking about buying an investment property to start a new real estate investment business or to expand your real estate investment portfolio, you should choose the right location for your rental property.
You have two options: 1) To conduct real estate market analysis across the entire US housing market to choose the best place to buy an investment property at the beginning of 2018 or 2) To stay with us until the end of this blog to see if the Nashville real estate market is a good location for investment properties at the moment. The second option is much easier and more convenient for any real estate investor, right? So, read to the end to learn whether buying a Nashville investment property at the beginning of 2018 is a smart investment choice or not, and what the best rental strategy for Nashville residential income properties is.
How Does the Nashville Real Estate Market Look Like at the Beginning of 2018?
Before deciding whether now’s the time to invest in Nashville rentals, a real estate investor needs to see all the real estate metrics associated with buying, owning, and renting out a Nashville investment property. Instead of having to go through days or even weeks of analyzing Nashville real estate investments, here we offer you all the most important metrics for Nashville residential income properties. “Where do we have such comprehensive and accurate data on Nashville rentals?”, you might wonder. The answer is simple: All the numbers below have been computed by Mashvisor’s investment property calculator. While Mashvisor offers a wide range of real estate investing tools to help new and experienced real estate investors make the best real estate investments, the rental property calculator must be the best one. It saves real estate investors a lot of time and efforts by eliminating the need to conduct market research, real estate market analysis, neighborhood analysis, and investment property analysis.
Sign up for Mashvisor now to get access to the best investment property calculator in town in addition to many other real estate investing tools.
- Median Property Price: $449,000
- Traditional Monthly Rental Income: $1,830
- Traditional Cash on Cash Return: 2.9%
- Traditional Cap Rate: 2.9%
- Monthly Rental Income: $2,950
- Airbnb Cash on Cash Return: 6.2%
- Airbnb Cap Rate: 6.2%
So, as you can see, buying a Nashville investment property is relatively affordable as the median property price is well below $500,000. The monthly rental income for both traditional rentals and Airbnb rentals is also good. However, the return on investment for traditional rental properties does not seem great. On the other hand, investing in short-term rental properties seems like a profitable investment choice with good cash on cash return and good cap rate.
Related: Why Nashville Investment Properties Are Hot
You might be wondering why the cash on cash return and the cap rate computed by Mashvisor’s investment property calculator are the same for both traditional rentals and Airbnb rentals. This is because our rental property calculator assumes that all income properties are paid for fully in cash by default.
Another thing you might be wondering is why we are saying that 6.2% is good cash on cash return and good cap rate when most real estate experts claim you should aim for at least 8-12% in cap rate, while they are more hesitant to say what a good cash on cash return rate is. True, such return on investment is great, but we have to be realistic. In the current US housing market and rental market, with an exponentially growing number of real estate investors and rental properties, it gets harder and harder – if not impossible – to achieve such return on investment. Actually, a cap rate of 6.2% is great.
To learn more about owning a Nashville investment property to rent out, click here.
What Is the Optimal Rental Strategy for a Nashville Investment Property?
One of the best features of Mashvisor’s investment property calculator is that it provides real estate investors with the optimal rental strategy for any city, neighborhood, and investment property. As we said above, Airbnb rentals is the best rental strategy for a Nashville investment property. It yields significantly higher return on investment because of the high Airbnb monthly rental income.
To start buying a Nashville investment property now in the most efficient and profitable way, click here.
Are Airbnb Nashville Rentals Legal?
Every time a real estate investor thinks about investing in short-term rental properties, he/she should immediately check out the legal situation with this type of rental strategy in his/her location of choice. So, since an Airbnb Nashville investment property is more profitable than a traditional Nashville investment property, is Airbnb fully legal in the Nashville real estate market?
Related: Everything You Need to Know About Airbnb Nashville
Well, so far so good. Currently short-term rentals such as Airbnb rentals are legal in the Nashville housing market. However, 2017 witnessed strong efforts by various groups such as Nashville homeowners and probably Nashville hotels to phase out non-owner-occupied Airbnb Nashville properties from residential zoned neighborhoods over the next 3 years. Most recently, in October 2017 the Nashville Metro Council held off on the short-term rental phase out bill, and voting was delayed until some time in January 2018. So, if you are interested in buying a Nashville investment property to rent out on Airbnb, keep your eyes open in the coming weeks to know what conditions exactly you will need to meet as a short-term rental real estate investor in Nashville.
What Is the Best Property Type for an Airbnb Nashville Investment Property?
If you consult Airbnb, AirDNA, and Trip101 on the best Airbnb Nashville rentals, you will find a wide variety of property types including townhouses, apartments, cottages, lofts, suites, villas, guesthouses, farmhouses, and rooms. This is great news for real estate investors considering the option of investing in a Nashville investment property through the Airbnb rental strategy as they choose to pick the most suiting property type for their budget and investment goals. One thing you want to keep in mind though is that you might want to buy a Nashville investment property in which you can rent out just an Airbnb room in case the new short-term rental phase out bill passes, and you are not able to rent out non-owner-occupied properties.
Related: In Which Neighborhoods Should You Invest in the Nashville Real Estate Market?
If you think that buying a Nashville investment property to rent out might be the right investment choice for you at the beginning of 2018, read about the best neighborhoods to do so here. Moreover, make sure to do your investment property search on Mashvisor to end up with the best real estate investment property in the US housing market.