Nashville is a unique city, and that means investing in real estate here is not the same as investing in real estate elsewhere. The city attracts a large number of visitors and tourists – more than 16 million visitors a year! That provides a lot of business and a lot of traffic for the local economy, which is good news.
Even better news is that people aren’t just visiting Nashville, they’re deciding to live here.
That makes a big difference in the real estate market.
If you’re investing in Nashville properties or thinking about buying a Nashville investment property, we’d like to share some of the emerging real estate trends that we’ve noticed begin to take root here in our town.
As local property managers, we can tell you that we love Nashville. From its vibrant music scene to its growing tech industry, the city has become a magnet for new residents and growing businesses. For smart property investors, there are a lot of opportunities here to invest wisely and earn some impressive returns.
Here’s what we can tell you about how things are trending in the Nashville housing market.
Nashville is Growing
There’s some impressive growth happening around here. Nashville has seen a population boom in recent years, and that’s created a lot of extra demand for high-quality housing. According to the U.S. Census Bureau, the city’s population grew by 1.5% in 2022 alone. This influx of new residents has driven demand for both residential and commercial properties, making Nashville a notable market for real estate investors.
A diverse economy is one of Nashville’s strongest assets, and a good indicator that the market will stay strong for years to come. Nashville companies and businesses employ people in the healthcare, education, and entertainment sectors, providing a stable foundation for sustained growth. Additionally, Nashville is experiencing a growth spurt when it comes to technology and businesses in the tech industry. This has become a desirable spot for entrepreneurs and start-ups. This attracts a lot of new people to the area with diverse skill sets and interests.
Rising Rental Demand in Nashville
People are moving to Nashville for economic opportunities and for the high quality of life. With the increase in population, there’s a growing demand for rental properties. Nashville rentals are in high demand, particularly in urban areas like Downtown and The Gulch. Investors should look into multi-family units and high-end apartments in neighborhoods like these to capitalize on this trend.
The Nashville rental market is characterized by low vacancy rates and increasing rental prices. These favorable conditions are driven by high demand and a competitive housing market. For real estate investors, this means stable rental income and potential for long-term appreciation.
If you want to capitalize on the strong rental market that’s only expected to get stronger, we recommend that you explore the many diverse rental markets in and around the city. You’ll find everything from luxury apartments in the busy downtown area to family homes in quiet suburbs that offer plenty of space and privacy. This diversity allows investors to enjoy different segments of the rental market, maximizing their investment opportunities and options.
The combination of high rental demand and rising property values results in strong return on investment (ROI) for investors. Whether you’re looking to invest in single-family homes or multi-family units, Nashville provides ample opportunities for lucrative returns.
Expansion into the ‘Burbs
While urban centers remain popular, there’s a noticeable shift towards suburban living. Areas like Franklin and Hendersonville offer more space and lower living costs, making them attractive to families and remote workers. These suburbs are ripe for residential investments and these are good places to look if you’re hoping to find stable, long-term tenants who are looking for the experience of owning a home without having to deal with the maintenance or the cost.
Short Term Rentals in Nashville
Nashville offers an outstanding short-term rental market because of the number of visitors who arrive in the city every day. You’ll have vacationers, business people who are here for conferences and seminars, as well as guests who visit for a weekend. Short-term rentals are popular among real estate investors these days because of the high nightly rate that can be achieved on such a rental.
While this trend is something we expect will stick around, it’s important that you’re aware of the regulations and requirements around this type of housing. A permit from the Metro Codes Department is required before you can even list a home for rent on a short-term site like Airbnb or VRBO. The type of permit you apply for will depend on whether you’re renting out an owner-occupied property or one that is not owner-occupied.
Technology and the Impact on Nashville Real Estate and Property Management
Technology has been moving rapidly to update and modernize the real estate and property management industry in Nashville, and a lot investors are finding it hard to keep up. Some of the technology we use has been around for a while; virtual tours and self-showings have stuck around since the worst of the pandemic came and went. Now, we can rely on technology to help us manage homes more effectively and to offer incentives to tenants when it’s time to rent out a home.
There’s also the arrival of AI, which is having more of an impact on your real estate transactions than you likely realize.
Data is extremely important to Nashville property managers, and we’re getting better at collecting it. Actually, for a lot of us, the problem is actually that we’re too good at collecting it, because we have more of it than makes sense. Predictive analytics is helping to make sense of all that data that’s collected, providing insights into how investments are evaluated and managed.
AI-driven tools harness big data to forecast market trends, assess property values, and optimize rental pricing strategies. This can help you make decisions about where to buy, what to buy, and how to set the right price or objectively and consistently screen tenants.
Advanced algorithms can analyze vast amounts of information, from local economic indicators to historical rental patterns, helping investors make data-backed decisions. Rental property owners can target potential tenants more accurately and maximize ROI with such comprehensive insights at their fingertips.
Our technology helps you when you’re ready to buy, sell, or rent out a property. Smart investors will know how to leverage the data and the tech that’s out there to have a more profitable and meaningful real estate experience.
Sustainability and Green Living
Sustainability is becoming a significant factor in real estate decisions. Properties with green certifications and eco-friendly features are more appealing to buyers and renters alike. Investing in sustainable buildings not only benefits the environment but also offers long-term financial gains.
Some of the most important things you can do to position your property to leverage this trend are:
- Install better windows. Energy-efficient windows will reduce heating and cooling costs, improve the home’s durability, and contribute to tenant satisfaction. They’ll also make your property more attractive to buyers when it’s time to sell. Consider investing in double pane or triple pane windows that contain low-e glass. These types of windows will keep the home cooler in the summer and warmer in the winter while minimizing UV rays that can damage furniture and carpets. And, your HVAC system won’t have to work as hard.
- Convert to LED bulbs. Switching all the lights in your rental property to LED (light-emitting diode) bulbs is an eco-friendly and cost-effective upgrade, and they’ll also be attractive to buyers or renters. LED lights use at least 75% less energy and up to 90 percent less energy than other types of lights. They also last 25 times longer than traditional incandescent bulbs. Upgrading to LED lights will reduce your energy consumption and lower your energy bill. You can also install smart lighting systems that can be controlled remotely, which can reduce energy waste.
- Smart thermostats. Smart thermostats are designed to automatically adjust the temperature of the home when residents are not in the property or asleep. They reduce energy consumption and waste. These thermostats can also be controlled remotely via a smartphone or tablet, giving tenants control over their energy usage and costs. In the long term, programmable thermostats can save hundreds of dollars a year on heating and cooling costs.
Rising Appreciation for Nashville Real Estate
The final trend we want to talk about is what you can expect from property values.
Over the past decade, Nashville has easily been ranking among the country’s best cities for home appreciation. The data that we’ve recently gathered tells us that there’s been appreciation that’s up to 152% in the last 10 years. That’s an average annual growth rate of more than 9.5%. (This data can be viewed at neighborhoodscout.com).
Nashville is in the top 10% of markets across the U.S. when it comes to property value increases.
What does this mean for property investors?
It means to invest in Nashville real estate. There’s far more opportunity than there is risk. You can increase your chances of success by working with an experienced Nashville property management partner.
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Contact our team at Apex Ventures, Inc.
