The Nashville economy is on a roll, and the area is a particularly good location for investors who want to purchase single-family rental properties. That might not be the first thing that pops into your mind when you hear the name Nashville, but this area’s unique mix of industries and high density of young professionals makes it a hotbed for rentals.
Before reinvesting your wealth into stocks and bonds, consider detaching a part of your portfolio from the stock market by purchasing an SFR investment property in the Nashville area. With HomeUnion®’s help, it’s remarkably simple to enjoy the benefits of investing in Nashville.
It starts with the economy…
Any city that provides strong rental housing market growth also possesses a powerful economic engine, and Nashville is no exception. The area has been an epicenter of economic growth for the past several years, and things show no indication of slowing down. Consider that Nashville ranked third on the most recent U.S. Conference of Mayor’s Economic Report for Gross Metropolitan Product.
This document measures the amount of gross metropolitan product (GMP) growth experienced by different metro locations from year to year. Nashville’s economy gained 4.2 percent compared to the previous year, and the report predicted the city will possess a GMP of over $100 billion in 2014. These numbers put Nashville ahead of countless other metro areas, and reveal the strong economic foundation that supports a burgeoning housing market.
… and housing follows suit
The U.S. Census Bureau reported Tennessee’s population grew by about 200,000 residents in the past five years. Remarkably, almost 50 percent of that growth occurred during the span between 2013 and 2014, which indicates an acceleration in the state’s population gain that will put additional pressure on the housing market. Real estate is big business in Nashville, but supply can’t keep up with demand. That’s driving up prices and making outright homeownership untenable for many new and existing residents.
Home sales are up in Nashville, according to the Greater Nashville Association of Realtors, but that uptick presents a double-edged sword. Inventory is on the decline, and as of March was noticeably lower than a year prior. The constraints on supply are going to increase competition for homes throughout the Nashville area, and that could dramatically affect who can purchase a single-family home. Auction.com analyzed metro areas across the U.S. and found Nashville was one of the top five housing markets in the country based on a combination of single-family home prices and home sales.
As a result of this market pressure, the rental vacancy rate is quite low overall at just 5.6 percent, according to the Center for Housing and Urban Development. The same report noted that Nashville’s rental market is particularly vibrant because the city contains four colleges: Vanderbilt University, Belmont University, Tennessee State University and Lipscomb University. According to the Center, this contributes 21,050 individuals who live in off-campus housing to the city’s real estate market. Combined with an economy that attracts a large number of young professionals who are likely unable to afford rapidly rising home prices, it’s clear that the rental market in the Nashville area is going to continue advancing well into the future.
Traditionally, investors needed to occupy the same metro area as their real estate investments to ensure they were making smart decisions. Now, with HomeUnion®’s service, investors can register online to view hundreds of prevetted properties in the best locales around the country, including Nashville. HomeUnion® can provide financing through an in-house lender and manage the property and tenants to make the process simple for investors. SFR investing can compliment nearly any investment strategy, and working with HomeUnion® makes it simple to diversify with real estate.