Most of us are familiar with services like Airbnb and VRBO, and while they are certainly great for getaways, the properties themselves can also be great investment opportunities. Much like the rest of the Nashville real estate market, Short Term Rentals (STRs) are hot and in high demand. We spoke with experts from a leading Nashville sales team, The CityLiving Group, what you need to know before buying a short-term rental property, and we also heard about a new STR development that first appeared in Nashville.
What you need to know before buying a short-term rental
Know the rules
First and foremost, it’s important to know what a short-term rental really is. In Nashville, an STR is defined as any rental property that you lease for less than 30 days. This comes with rules and regulations that limit which properties can operate as short-term rentals, so if you don’t know the rules, it’s important to work with someone who knows them. Fortunately, The CityLiving Group real estate agents are well versed in STRs and their regulations.
Deborah Vahle, real estate agent at The CityLiving Group, says there’s a lot of misinformation about STRs going around, so it’s crucial to use credible sources when doing your research, such as the Nashville Area Short-Term Rental Association. (NASTRA). “[NASTRA] helps homeowners stay on top of the regulations, ”says Deborah. “If you go to their website, they have a news section and you can look at the regulations. Members also have access to a private Facebook group where anyone can ask questions about the different regulations as they sometimes change.
However, Deborah says your ultimate STR resource is the Metro Codes Department. “They’re the ones who are going to be able to tell someone with absolute certainty whether or not they can get a permit for a property,” she says. “It really is the only place where everyone has to [confirm with] before buying.
Know the types of permits + How to get one
Once you know the rules, your next step is to figure out what type of STR permit you need – owner-occupied or non-owner-occupied. An owner-occupied property may have a studio basement that you rent out while you occupy the rest of the property. It could also include a house that you rent out while you are out of town. On the other hand, a rental property not occupied by its owner is property in which you do not live and is strictly intended for rental.
Once you know what type of STR you are going to operate, you need to obtain the appropriate permit from the Metro Codes Department. “Depending on the type of property and the zoning of that property, it will either be eligible for a permit or it will not,” says Deborah. “If he is eligible for a permit, the process goes through the codes department to obtain the permit. I usually suggest that you work with a company that specializes in this area rather than doing it yourself.
Have your money in place
Deborah also stresses the importance of having your money in place before you start your research and purchase an RTS. “The Nashville real estate market moves quickly and the STR market moves even faster at times, so you need to be ready to go when your ideal property becomes available,” she advises.
Likewise, if you are taking out a loan, it is important to inform your lender that the property will be used as a short-term rental. Indeed, if a building allows STRs, it is very likely that more than 50% of the units are owned by investors (instead of owner-users), which means that your lender will probably have to set up a portfolio loan for you. rather than a conventional loan.
Odyssey in the park
When Deborah said these developments were selling out fast, she wasn’t kidding. Odyssey at the Park, an STR development currently under construction, sold out before the first excavator hit the ground.
Located a stone’s throw from Centennial Park, the development includes 75 units which are all eligible for short-term rental permits. The first level of the property includes approximately 10,000 square feet of retail space, and for renters, it offers luxurious amenities like a pool, lounge, and fitness center. With one and two bedroom floor plans, each unit includes a living space, bathroom, kitchen, and walk-in closet.
With its prime location and luxurious offerings, it’s no surprise that Odyssey at the Park is already fully booked. “A lot of these short-term rental developments sell out before they’re even built,” says Deborah. “This is where knowing someone who is in this market and who can give you access to these properties is really important if this is what you are looking to buy. “
A new short term rental development in Nashville – available now!
Lofts at 30e Nord
Another new STR development in Nashville is Lofts at 30th North. Located in the West End Corridor, the 52-unit building is close to Centennial Park, Vanderbilt University, shopping and dining, making it an ideal location for visitors to experience Nashville. However, its location is also ideal for investors. Giovanna Burchell, another CityLiving Group real estate agent, says: “This is a great property as it is also centrally located, close to hospitals, and can take advantage of the corporate rental program. The short term rental season which is low can be compensated for by corporate rentals to ensure a better return on your property.
In terms of building aesthetics, it combines sophistication with a sense of urban style. This is thanks to the building’s high ceilings, granite countertops and granite window sills. Additionally, the first and second levels of the building have polished concrete floors, while the third and fourth levels have hardwood floors. In the units themselves, you’ll find handcrafted steel doors that separate the bedrooms from the rest of the living room.
When you’re ready to begin your search for a short-term rental property, contact the experts at The CityLiving Group by visiting nashvillecityliving.com or calling (615) 383-6964. They are headquartered at 2206 21st Ave. S., Nashville, TN 37212.
This article is sponsored by The CityLiving Group. All photographs provided by The CityLiving Group.