Should You Invest in Nashville’s Real Estate Market?

January 11, 2024 TCSMgmt

Should You Invest in Nashville’s Real Estate Market?

Should You Invest in Nashville’s Real Estate Market? - Article Banner

When you think of Nashville, you might think about a bright and diverse music scene. You might imagine southern charm and the Tennessee State Capitol. 

Do you think about real estate investments? 

Probably, you should. 

Nashville is an excellent market for real estate investors, especially with things shifting recently. 

Let’s take a look at why you should invest in Nashville’s real estate market. 

Local Economic Growth 

It’s difficult to invest in a market that’s struggling economically. In Nashville, there are no such worries. The economy here is growing, thanks to new employers moving into town and a robust population that shows no signs of dwindling. 

Nashville’s economy is one of the fastest-growing economies in the country. Unemployment is low; below three percent. Nashville is also enjoying a migration of people moving from nearby areas. Most Nashville jobs are in information, leisure and hospitality, professional and business services, and financial activities. These sectors have experienced the highest percentage of growth.

As the employment rate grew, the median household incomes increased by more than six percent over the last few years. A growing median household income suggests potentially higher rental rates, and we have seen that rents in Nashville are high.

Tech giants have recently set up operations in Nashville, including Amazon and Oracle. That has brought a number of highly skilled, well-paid professionals into the city. This is helping investors feel good about the future of Nashville and the chance that their properties will continue to appreciate in value. 

Digging into Population Growth

You want to invest where there are likely to be tenants. 

In addition to the music industry and colleges and universities such as Vanderbilt and Tennessee State University, more people are coming to Nashville, and they’re looking for homes. Nashville is among the top 10 cities experiencing the highest rate of inbound growth. It’s more affordable and less populated than other cities, and that makes it attractive to people who are looking for something a little different. It’s an ideal area for anyone who wants to live in a city but doesn’t want to fight against the traffic, the high cost of living, and the crowds.

We’re seeing a lot of rental property growth downtown. People like being in walkable neighborhoods, and they love to be close to the Cumberland River. Occupancy rates are high and landlords are having no trouble finding and retaining good residents. 

Statistics over the last two years show us that the median rent has grown to nearly $2,000 per month. The more affordable neighborhoods are around $1,200 to $1,400 in median rents.

That’s great news for real estate investors who have a rental property to offer. 

Home Values are Rising 

Homes have appreciated in value by more than 20 percent over the last few years in Nashville. And, there’s still some room for additional growth. When you invest in a Nashville rental property, you can expect to begin earning money right away. Prices are still relatively affordable here, but those values are rising. 

With rising home values are rising rents. You’re in a strong position when you can count on both consistent and recurring cash flow through rental income and reliable and long term returns on investment (ROI).

Nashville Quality of Life 

A lot of surveys and publications have listed Nashville as among the fastest-growing cities and most-preferred places to retire. There are many reasons for this. Most importantly, the quality of life in Nashville attracts a variety of tenant demographics. We’re getting retirees, families with small children, and students who came to school here and never left. 

Nashville is known as “Music City” or the “Country Music Capital.” It’s said that bluegrass began here, and there are more than 180 music studios and 5,000 working musicians in residence here. When you are in Nashville, you can listen to a different genre of live music every night of the week.

But, it’s not just the music that makes Nashville so popular. The city has plenty of cultural attractions, unique architecture, and several interesting museums. The metro area has a vast park system, pro sports teams, and various famous attractions.

The weather in Nashville isn’t as extreme as in some cities. Residents experience mild winters and warm summers.

All these are great reasons to visit – and live in – Nashville. The same reasons make investing here smart. You’ll always have a strong pool of tenants for your property. 

Investing in Nashville Real Estate Now

Whether you’re local to Nashville or living outside of the area and looking for a great new market to explore, consider investing in Nashville real estate. There is a growing tourism industry, lots of high paying jobs and qualified tenants, and the ease of buying a property in a market that won’t bankrupt you. You’ll find multifamily units in downtown Nashville as well as single-family homes in the nearby suburbs. You can invest in an established neighborhood or a new construction HOA community. 

There’s a huge potential for real estate investors. Like other parts of the country, supply is hardly keeping up with demand. We need some good rental homes on the market. 

Here’s what you can do right now to prepare to invest in Nashville:

  • Get to know the city and its various neighborhoods. A property manager or real estate agent can help. 
  • Look for lending. Unless you’re planning to pay in cash, you’ll need to secure a loan with the best price and maximum leverage for your next rental investment.
  • Talk to a property manager about rental values you can expect, maintenance costs you should budget for, and how quickly you can expect to rent out your property. 
  • Close the deal and begin renting out your property. 

We’d love to partner with you as you begin your investment journey in Nashville. Please contact us at TCS Management for some direction and resources. 

TCS Management is a full service property management company headquartered in Philadelphia, Pennsylvania, also serving Cherry Hill, NJ, Wilmington, Delaware, Nashville, Tennessee and the surrounding areas. We focus on single-family and multifamily residential property management of homes, condos, townhomes, and apartment buildings.

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