Thinking about buying a duplex in Nashville so you can live in one unit and rent the other? You are not alone. Duplexes can offset your mortgage, build equity, and give you flexibility over time. In this guide, you will learn how to find the right property, understand local rules, choose financing, and run the numbers with confidence. Let’s dive in.
Why a duplex in Nashville
Nashville’s steady job and population growth help support demand for rentals across Davidson County. That demand can make a duplex appealing whether you plan to house-hack, owner-occupy, or invest. You can target neighborhoods near major employers, universities, hospitals, transit corridors, and entertainment areas to widen your tenant pool.
Your exact strategy should match the block and the building. Older duplexes may have shared systems and different parking setups. Many streets also see infill and redevelopment, so it pays to understand zoning and any neighborhood overlays before you write an offer.
Zoning and use rules
Verify zoning first
Before you fall in love with a property, confirm that two-unit use is allowed on that parcel. Zoning in Nashville varies by district and overlay, and rules affect everything from unit count to parking and setbacks. Start with the Metro Nashville Planning Department to look up a parcel’s zoning and permitted uses, and contact planning staff with questions.
Permits and building work
If you plan to add a kitchen, convert space, or change occupancy, you will need permits and inspections. Electrical, plumbing, and mechanical work usually requires licensed contractors. For specific permit questions, reach out to Metro Codes and Building Permits. Most urban parcels are on city utilities, but you should confirm water and sewer service with Metro Water Services.
Short-term rental considerations
If you want to use one unit for short-term rentals, Nashville has a permitting program with operating rules that vary by area. Do not assume STR use is allowed. Review the city’s resources on the Metro short-term rental program and confirm what applies to the exact address before you list a unit.
Parking and utilities
Parking rules are set by zoning and can influence marketability. Ask how many off-street spaces are required and what the lot can accommodate. Also check whether units are separately metered for electricity, gas, and water. Shared meters can work, but your lease must spell out utility allocation clearly.
Financing a two-unit property
Owner-occupant loan options
If you plan to live in one unit, you may qualify for low-down-payment loans that use rental income from the other unit to help you qualify. FHA allows financing for 2 to 4 unit properties with owner occupancy and offers a rehab option for repairs. Explore programs and underwriting basics through HUD’s FHA resources. Conventional loans through Fannie Mae and Freddie Mac also finance owner-occupied two-unit homes, though down payment and reserve rules differ from single-family.
Veterans may use VA financing for up to four units with owner occupancy. Whichever route you choose, lenders often count a portion of market rent or signed leases from the second unit when calculating your qualifying income.
Down payment, reserves, and occupancy
Many owner-occupant programs require you to live in the property for a set period, commonly 12 months. Cash reserve requirements can be higher for multi-unit loans, and underwriting may be tighter if the building is older or needs repairs. Ask your lender for a pre-approval tailored to a two-unit property so you know your price range and documentation needs upfront.
Get the right pre-approval
A single-family pre-approval is not enough. Make sure your lender models rental income correctly, accounts for vacancy, and understands any repair plans. If you are exploring a rehab loan, ask for contractor bid and timeline requirements early so you can write a realistic offer and contingency plan.
Property taxes and federal taxes
Local property tax basics
Your exact bill depends on current assessment and classification, which can differ for multi-unit properties. Before you buy, look up the parcel through Metro’s assessor and trustee resources and confirm how the property is classified. For general links and offices, start at the Metro Nashville website.
Federal tax treatment of duplexes
Rental income is taxable, but you can deduct many expenses, including mortgage interest, property taxes, insurance, maintenance, repairs, and depreciation. If you live in one unit and rent the other, you must allocate expenses between personal and rental use. To understand allowable deductions and recordkeeping, review the IRS guidance for rental housing in IRS publications for residential rental property. Consult a qualified tax professional for advice on your specific situation.
Landlord-tenant rules in Tennessee
Leases, deposits, and notices
Tennessee’s landlord-tenant laws set rules for security deposits, disclosures, habitability, notice periods, and eviction procedures. Use a clear, written lease and follow the statute for all notices and timelines. You can find state resources and the Tennessee Code via the Tennessee state government site.
Lead paint and renovation rules
If the property was built before 1978, federal law requires lead-based paint disclosures. Certain renovation work on older homes also triggers EPA’s Renovation, Repair and Painting Rule, which requires certified practices for disturbing painted surfaces. Learn more from the EPA’s lead safety resources.
Due diligence and inspections
Structure and major systems
Order a general home inspection that covers roof, foundation, exterior, and water intrusion. Ask for the age and service records of HVAC units and water heaters for each unit. Verify electrical capacity, panel condition, and plumbing materials, especially in older properties where upgrades may be partial.
Safety and code items
Confirm each unit has proper egress, smoke and CO detectors, and adequate fire separation. Look for any past work that appears unpermitted. A history of claims can affect insurability, so ask the seller for disclosures and available documentation.
Specialty checks and flood risk
Most urban parcels connect to city sewer, but confirm the service with the seller and Metro Water Services if needed. If a property is on septic, schedule a septic inspection. Also check flood maps. If the parcel sits in a Special Flood Hazard Area, a lender will require flood insurance. You can verify a property’s designation at the FEMA Flood Map Service Center.
Rent, cash flow, and operations
Estimating rent and vacancy
Build your pro forma using current, local rent comps for the neighborhood and unit size. Account for vacancy and realistic expenses like taxes, insurance, maintenance, and reserves for capital items. Many investors plan for 20 to 40 percent of gross rent to cover typical operating expenses, depending on condition and management style.
Self-manage or hire management
If you will occupy one unit, self-managing can make sense and keeps you close to the property. Remote or hands-off owners often hire a professional manager to handle leasing, rent collection, maintenance, and legal notices. Typical fees range from 7 to 12 percent of collected rent, with leasing and setup fees extra.
Utility setup and lease terms
Clarify which utilities each unit pays and how shared services are billed. If systems are shared, your lease should spell out cost sharing and access for maintenance. For owner-occupants, also include clear clauses for quiet enjoyment, parking assignments, landscaping, and guest rules that set expectations for both sides.
Common pitfalls to avoid
- Skipping zoning verification. Always confirm permitted use and any overlay that affects duplex use before you go under contract with the Planning Department.
- Assuming STRs are allowed. Check the city’s STR resources and get the correct permit before listing a unit for short stays.
- Overlooking separate meters. Shared utilities can complicate billing and leases, especially for water and gas.
- Missing parking rules. Some areas have on-street limits or minimum off-street requirements that affect rentability.
- Ignoring unpermitted work. Unpermitted conversions can create safety, insurance, and financing issues.
- Underestimating expenses. Budget for maintenance, turns, and capital items along with insurance and taxes.
Step-by-step buying checklist
- Step 0: Define your goal. Decide if you will house-hack, owner-occupy, or buy as a pure investment. Your answer drives financing, search criteria, and lease strategy.
- Step 1: Get a two-unit pre-approval. Work with a lender experienced in duplex loans. Ask how they treat projected rental income, reserves, and occupancy rules for FHA, VA, or conventional loans. Review options from HUD’s FHA programs and Fannie Mae.
- Step 2: Pick target areas and verify zoning. Identify blocks that fit your tenant profile and commute needs, then confirm parcel zoning with the Metro Nashville Planning Department.
- Step 3: Request property info. Ask the listing agent for rent rolls, copies of leases, utility setup, recent repairs, service records, and any code or permit history from Metro Codes.
- Step 4: Order inspections. Schedule general, HVAC, pest, and sewer or septic checks. For older homes, consider lead-based paint and asbestos testing where appropriate.
- Step 5: Review landlord-tenant rules. Confirm deposit handling, required disclosures, and notice timelines using Tennessee’s landlord-tenant resources.
- Step 6: Build your pro forma. Use local rent comps, a vacancy allowance, realistic expenses, and your financing terms. Include reserves for capital items like roof, HVAC, and plumbing.
- Step 7: Plan insurance and risk. Price landlord coverage with liability and optional loss-of-rent endorsements. If in a flood zone, check the FEMA map and budget for flood insurance.
Your next step
Buying a duplex in Nashville can be a smart, flexible path to homeownership and long-term wealth, but it takes careful due diligence. When you have the right zoning, financing, inspections, and lease plan in place, you set yourself up for predictable income and fewer surprises. If you want local perspective on neighborhoods, realistic rent ranges, and how to structure your purchase, reach out to Sandra Hill for a friendly, pressure-free conversation.
FAQs
What financing programs allow low down payments on a Nashville duplex?
- If you plan to live in one unit, FHA and VA may allow low down payments, and conventional options exist for 2-unit owner-occupied homes; review details with your lender and start with HUD’s FHA resources and Fannie Mae.
How do I verify if a specific Nashville parcel allows a duplex?
- Check the zoning and any overlay with the Metro Nashville Planning Department and ask planning staff to confirm permitted uses for that parcel.
What inspections are essential for an older duplex in Davidson County?
- Order a general home inspection plus HVAC, pest, and sewer or septic checks, verify fire separation and egress, and review permit history with Metro Codes.
Can I use one duplex unit for short-term rentals in Nashville?
- Possibly, but it depends on address and permit type; review the city’s short-term rental rules and permitting before you list a unit.
What landlord-tenant laws apply when I rent the second unit?
- Tennessee’s landlord-tenant statutes govern deposits, notices, habitability, and evictions; read state resources at the Tennessee government site and use a clear written lease.
Do I need flood insurance for a duplex in Nashville?
- If the property is in a Special Flood Hazard Area, lenders will require it; check the address at the FEMA Flood Map Service Center and confirm cost with your insurer.
