Nashville Investment Property
Nashville is the “It” city. It has been ranked the #1 housing market in the nation. Depending on the day, we hear that 80-100 people move to Nashville every day. We were named the #1 Minor League Baseball city. We are in the Top 20 cities for tech jobs, #6 for young professionals and #7 for millennials. We are among the Top 10 cities in which to launch a career and Nashville has the third fastest growing large Metro economy. The list goes on and on. But, with all these accolades, does that mean that Nashville is a great place to buy investment property? Yes and no.
With Nashville’s influx of residents, we have also had low inventory. Because a lot of those are millennials and young professionals, the demand for properties under $200,000 has increased significantly. Typically, this is where investors like to buy. They can get in a property for a decent price, rent it out for an attractive price, and still get a nice return on their investment every month. We were getting multiple calls a week for a while from people all across the country that wanted to invest in Nashville. Most used the word that investors dream about, “deal.” “I want to get a deal.” “I’m looking for a deal.” “Where can I find a deal?” and “If you find a deal, I’ll buy it.” Well, the truth of the matter is, there really aren’t many, if any, “deals” in Nashville right now.
First time home buyers, young professionals, millennials and investors are all competing over the same property. Investors that have cash may be more attractive to sellers, however, cash is not always king and not all investors have cash. Some sellers don’t want to sell to an investor and will take an offer from an owner-occupant over an investor because they either want to help the “little man” or they don’t like the thought of renters living in the home they have loved for years. Another pitfall of investors is thinking that cash is king – no matter the offer. Sellers won’t necessarily take thousands less for their home just to have it close in two weeks. Some would rather wait another 2- 3 weeks and make more in the long run. If you plan on investing but you are getting a loan, you are in the same boat, for the most part, that owner-occupants are in and you will find the Nashville market a tough one to compete in.
The best thing to do is to find the properties before they go on the market or at very least, the same day. Find a Realtor that diligently hunts for properties or go out and door knock neighborhoods yourself. The bottom line is, if you can find the properties, buy them! If you have cash, use it. You can always take out a home equity line of credit to purchase more properties later. Cash, a solid offer, little or no contingencies, and a short closing window will make your offer the most attractive. It’s also good to note that you may need to offer over list price for the property in order to get the Seller to accept your offer. I know this goes against the investor code but if you want to be in a hot market, you have to play by the rules in that market.
If you’re thinking of buying Nashville investment property, do your homework, get with a team that knows the market, and hold on for the ride!
Michelle Froedge is a residential Realtor and Principal Broker in the Greater Nashville and Williamson County areas of Tennessee. “Mom” to four-legged fur baby, Tyler, Auntie to Zelamie, she is a vegetarian and sings in her spare time. Michelle has lived in Nashville and Franklin since 1997 and has been selling homes since 2004.