Introduction

Nashville Real Estate Investment opportunities are plentiful, with the city experiencing continued growth and establishing itself internationally as a hotbed for real estate investment, there is still time for individuals to find multifamily real estate opportunities in Middle Tennessee. According to recent data, Nashville’s rental market may be softening as thousands of units are scheduled to come on line in 2024 and 2025. Don’t be fooled, it’s normal for rental markets to correct themselves especially after the boom in rents we experienced over the last decade. One thing remains certain, and that is people are still moving to Middle Tennessee looking to rent, underscoring the city’s attractiveness for investors seeking stable returns. However, while Nashville presents lucrative options, savvy investors should also consider looking beyond the city limits to surrounding areas for their next investment venture. With neighboring cities like Murfreesboro, Clarksville, Gallatin, Springhill, Columbia and more experiencing similar growth trajectories to the Nashville core and offering potentially lower entry points, diversifying investment portfolios across the broader Nashville metropolitan area can unlock even more opportunities for long-term success in multifamily real estate.

Why Nashville Is Ideal for Real Estate Investment?

With a population exceeding 2 million residents and boasting over 70,000 businesses, the Nashville region stands as a vibrant economic powerhouse. Home to corporate giants such as Nissan North America, Bridgestone Americas, Dollar General, and Amazon, Middle Tennessee attracts top-tier companies drawn to its business-friendly environment and abundant talent pool. As a national hub for the creative class, Nashville hosts the strongest concentration of the music industry in America, further enhancing its allure for professionals and businesses alike. The region’s well-educated workforce not only fuels innovation but also contributes to its vibrancy and artistic essence. With low costs of living and doing business, diverse cultural offerings, and a thriving creative community, Middle Tennessee emerges as one of the nation’s premier locations for business expansion, relocation, and startups. The Nashville Area Chamber of Commerce‘s top-ranked economic development team stands ready to assist businesses in navigating the region’s dynamic landscape, ensuring a smooth transition and fostering continued growth and success.

All of these people will need places to stay. Multifamily offers a better opportunity to attract and maintain a diverse pool of renters which in turn mitigates the risk of vacancy. Not only is each multifamily unit cheaper per door, your debt service is happening thanks to multiple tenants. By comparison when a tenant moves out of a rental house there are no other tenants to help cover your debt servicing for that month or even months while you turn the unit and find new renters. See our article on debt service coverage and why multifamily is better.  

Navigating Nashville’s Real Estate Investment Market

The multifamily market in Nashville presents a dynamic landscape for investors, with rental prices and cash flow playing pivotal roles in investment decisions. Currently, the average rental price for a 3-bedroom apartment stands at $2300 per month, offering investors an insight into potential rental income streams. Cash-on-cash returns in Nashville’s multifamily market typically range between 3-5%, reflecting the profitability of investment properties in the region. While cashflow is important it’s only half of the equation. Your multifamily property continues to appreciate over time even while other people are paying your debt service. Although value growth has slowed since 2020, current trends indicate a continued upward trajectory, highlighting the resilience and long-term viability of multifamily investments in Nashville.

Exploring Opportunities Beyond Nashville’s Core

As property values in Nashville’s core continue to rise, investors are increasingly turning their attention to tertiary markets experiencing rapid population growth. Communities such as Clarksville, Manchester, Columbia, and Gallatin offer attractive investment opportunities, as families seek affordable housing options outside the bustling city center. These tertiary markets provide residents with the tranquility of Southern Tennessee living while still offering convenient commuting options to Nashville’s job centers. Factors to consider when evaluating investment opportunities in these areas include population growth rates, infrastructure development, and proximity to major highways for ease of transportation. By exploring opportunities beyond Nashville’s core, investors can capitalize on the growing demand for multifamily properties in emerging markets across Middle Tennessee.

Top Multifamily Investment Opportunities in Nashville

Nashville is full of great communities full of real estate investment opportunities. Here are a few of our favorite communities inside of Davidson County for you to consider.

• Bellevue: Situated southwest of downtown Nashville, Bellevue offers a mix of A to B+ class properties, making it an attractive option for investors seeking higher rental income potential. With its suburban charm and proximity to Percy Warner Park, Bellevue appeals to families and professionals alike, presenting a balanced blend of tranquility and accessibility.
• Madison: Located north of East Nashville, Madison presents a diverse range of B and C class properties, catering to investors looking for more affordable entry points. With its proximity to downtown Nashville and the Cumberland River, Madison offers residents convenient access to recreational amenities and cultural attractions, making it a desirable location for renters seeking value and convenience.
• East Nashville: Known for its eclectic charm and vibrant cultural scene, East Nashville boasts a mix of A to D class properties, reflecting its diverse and dynamic character. From historic homes to modern developments, East Nashville attracts renters drawn to its artistic vibe and close-knit community, making it a prime destination for investors seeking high rental demand and potential appreciation. (See Properties in East Nashville)
• Antioch: Situated southeast of downtown Nashville, Antioch offers predominantly B and C class properties, providing investors with affordable options in a growing market. With its convenient access to the I-24 freeway and ongoing development, Antioch appeals to a diverse group of working professionals and families seeking affordability and convenience in the Nashville area.

Real Estate Investment Outside of Nashville Davidson County

The Nashville core has been a hot market for quite some time. As a result deals are purchased quickly and often for their asking price. For this reason we recommend looking to the outskirts of Nashville. Purchasing multiple properties in a single area makes management a lot easier whether you choose to self manage or hire a company, location matters. Here are a few of our favorite markets outside of Nashville.

• Gallatin: Located northeast of Nashville in Sumner County, Gallatin offers a mix of multifamily properties catering to diverse demographics. With its historic charm, scenic landscapes, and growing economy, Gallatin presents investors with opportunities for long-term growth and stability in a thriving suburban community. (See Properties in Sumner County)
• Tullahoma: Nestled in the heart of Middle Tennessee, Tullahoma boasts a range of multifamily properties in a picturesque setting. With its strong sense of community, affordable housing options, and proximity to major cities like Nashville and Chattanooga, Tullahoma offers investors the potential for steady rental income and appreciation in a growing market. (See Properties in Coffee County)
• Columbia: Positioned south of Nashville in Maury County, Columbia features a mix of multifamily properties in a charming small-town atmosphere. With its historic downtown district, cultural attractions, and affordable housing options, Columbia appeals to renters seeking a blend of urban amenities and Southern hospitality, making it an attractive investment destination. (See Properties in Maury County)
• Clarksville: Located northwest of Nashville along the Cumberland River, Clarksville offers a diverse range of multifamily properties in a rapidly growing market. With its strong military presence, vibrant downtown area, and affordable housing options, Clarksville presents investors with opportunities for high rental demand and potential appreciation in an expanding community. (See Properties in Montgomery County)

Conclusion

As we’ve explored, Nashville Real Estate Investment offers unparalleled opportunities for growth and success in the multifamily market. Navigating the multifamily landscape in Nashville and its surrounding areas requires a strategic approach and a keen understanding of market dynamics. With Nashville’s exponential growth and neighboring cities experiencing similar trajectories, there’s never been a better time to explore multifamily investment opportunities in Middle Tennessee. Whether you’re drawn to the vibrant neighborhoods of Nashville’s core or the emerging markets on the outskirts, diversifying your investment portfolio across the broader Nashville metropolitan area can unlock a wealth of opportunities for long-term success and financial growth.

If you’re ready to take the next step in your multifamily investment journey, we invite you to schedule a free consultation with one of our experienced multifamily real estate agents. Our team is dedicated to helping you navigate the complexities of the market and identify the perfect investment opportunities tailored to your goals and preferences. Contact us today to get started on your path to multifamily real estate success in Nashville and beyond.