What You Need to Know Before Buying a Short-Term Rental in Nashville
We spoke with experts at CityLiving Group about what you need to know before purchasing a short-term rental (STR) property. Plus we learned about two new STR developments that have popped up in Nashville recently.
Most of us are familiar with services like Airbnb and VRBO, and while these are certainly great for getaways, the properties themselves can also be excellent investment opportunities. Much like the rest of Nashville’s real estate market, short-term rentals (STRs) are hot and in high demand. We spoke with experts at a top Nashville sales team, The CityLiving Group, about what you need to know before purchasing a short-term rental property, plus we learned about a new STR development that has popped up in Nashville.
Know the Rules
First and foremost, it’s important to know what a short-term rental actually is. In Nashville, an STR is defined as any rental property that you rent for less than 30 days. With this comes 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 does. Luckily, the realtors at The CityLiving Group are familiar with STRs and their regulations.
Deborah Vahle, a realtor at The CityLiving Group, says there is a lot of misinformation about STRs floating 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 owners stay on top of the regulations,” explains Deborah. “If you go to their website, they have a news section, and you can look up the current regulations. Members also have access to a private Facebook group where everyone can ask questions about different regulations because sometimes they 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. “That really is the one place that everyone needs to [confirm with] before they purchase.”
Know Permit Types + How to Get One
Once you know the rules, your next step is to determine which type of STR permit you need — owner-occupied or non-owner-occupied. An owner-occupied property might include a studio basement that you rent out while you occupy the rest of the property. It could also include a home that you rent out while you’re out of town. On the other hand, a non-owner-occupied rental property is one you don’t live in and is strictly for renting.
Once you know which type of STR you’ll be operating, you need to obtain the appropriate permit from the Metro Codes Department. “Depending on the type of property and depending on the zoning of that property, it will either be eligible for a permit or it won’t,” says Deborah. “If it’s eligible for a permit, the process is going through the codes department to get the permit. I usually suggest you work with a company that specializes in doing that versus doing it yourself.”
Have Your Money in Place
Deborah also emphasizes the importance of having your money in place before you begin your search and purchase an STR. “The Nashville real estate market is fast-paced, and the STR market sometimes moves even faster, so you need to be ready to go when your ideal property becomes available,” she advises.
Similarly, if you’re taking out a loan, it’s important to let your lender know that the property will be used as a short-term rental. This is because if a building allows STRs, it is very likely that over 50% of the units are owned by investors (instead of owner-users), which means your lender will probably need to set you up with a portfolio loan rather than a conventional loan.
Odyssey at the Park
When Deborah said these developments sell quickly, she wasn’t kidding. Odyssey at the Park, an STR development that is currently under construction, sold out before the first shovel touched the ground.
Located just a stone’s throw from Centennial Park, the development includes 75 units that are all eligible for short-term rental permits. The property’s first level includes about 10,000 square feet of retail space, and for renters, it offers luxurious amenities like a pool, lounge, and fitness center. With both one- and two-bedroom floorplans, each unit includes a living space, bathroom, kitchen, and walk-in closet.
Thanks to its prime location and luxurious offerings, it’s no surprise Odyssey at the Park has already sold out. “A lot of these short-term rental developments sell out before they’re even built,” explains Deborah. “That’s where knowing someone who’s in that market and can get you access to those properties is really important if that’s what you’re looking to buy.”
Lofts at 30th North
Another new STR development in Nashville is Lofts at 30th North. Located in the West End Corridor, the 52-unit building is in close proximity to Centennial Park, Vanderbilt University, shopping, and dining, making it a great place for visitors to experience Nashville. However, its location is great for investors, too. Giovanna Burchell, another realtor at The CityLiving Group, says, “It’s a great property in that it’s also centrally located near hospitals, and it can enjoy the corporate rental program. The short-term rental season that is low can be offset with corporate rentals to ensure a better return for your property.”
In terms of the building’s aesthetic, it combines sophistication with a sense of urban style. This is thanks to the building’s high ceilings, granite countertops, and granite window sills. In addition, the first and second levels of the building have polished concrete flooring, while the third and fourth levels have hardwood floors. Within the units themselves, you will find artisan-crafted steel doors that separate the bedroom areas from the rest of the living area.
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 photography provided by The CityLiving Group.
Brianna Goebel
Brianna is StyleBlueprint’s Associate Editor and Sponsored Content Manager. She is an avid fan of iced coffee and spends her free time reading romance novels.