Airbnb Nashville, Tennessee: Market Data, Laws & Investor Guide

Nashville, Tennessee is a thriving tourist destination that presents a lucrative opportunity for aspiring Airbnb hosts in 2024. With its vibrant music scene, delicious cuisine, and southern charm, Nashville attracts millions of visitors each year. In fact, Airbnb hosts in Tennessee earn an impressive average of over $67,500 per year, making it the second most profitable state for Airbnb hosting in the U.S.

As the short-term rental market continues to boom, Nashville has emerged as a prime location for Airbnb investments. The city ranks 18th among the best cities to invest in and boasts the 2nd highest number of Superhosts in the country. This indicates a strong demand for quality short-term rentals and a supportive community of successful hosts.

However, starting an Airbnb business in Nashville requires careful planning and compliance with local regulations. In this guide, we'll walk you through the essential steps to launch your Airbnb venture in Music City, from understanding the legal landscape to optimizing your listing for maximum occupancy and profitability.

Nashville Short-Term Rental Market Analysis

Nashville's short-term rental market has experienced significant growth in recent years, making it an attractive destination for Airbnb hosts. Let's dive into the key metrics and trends that define the city's Airbnb landscape.

Occupancy Rate, Nightly Rate, and Seasonality

According to AirDNA, in 2024, Nashville's short-term rental market boasts the following statistics:

• Average Occupancy Rate: 66%
• Average Daily Rate (ADR): $421
• Median Length of Stay: 3-4 days

Nashville's Airbnb market experiences moderate seasonality, with peak demand occurring during the spring and fall months.

Market Growth and Tourism Industry

Nashville's Airbnb market has witnessed substantial growth over the past two years:

1. In 2023, Nashville ranked as one of the best cities in the US to open an Airbnb, with a projected 10% growth in hotel demand and an estimated 15 million visitors.
2. The Nashville International Airport saw a record-breaking 22.9 million total passengers in 2023, a 14.8% increase from the previous year.

The city's tourism industry has also experienced significant growth:

1. Visitor spending in 2023 was estimated at $628 per visitor, with an average of $295 per day.
2. The annual occupancy rate in Davidson County reached 70% in 2023, a 1.3% increase from 2022.

Key Events and Festivals

Nashville hosts a variety of annual events and festivals that attract visitors and boost the short-term rental market:

1. CMA Fest (June)
2. Let Freedom Sing! Music City July 4th (July)
3. Tomato Art Fest (August)
4. Americana Music Festival + Conference (September)
5. Southern Festival of Books (October)
6. CMA Awards (November)
7. Jack Daniel's Music City Midnight: New Year's Eve in Nashville (December)

Booking Durations and Mid-Term Rental Market

According to Airbnb host forums and industry reports, the average booking duration in Nashville ranges from 3 to 4 days. The mid-term rental market, which includes monthly rentals, is also gaining traction in the city. Hosts have reported an increase in demand for longer stays, particularly from remote workers and travelers seeking extended getaways.

In conclusion, Nashville's short-term rental market presents a lucrative opportunity for Airbnb hosts, with strong occupancy rates, competitive nightly rates, and a thriving tourism industry. By leveraging the city's annual events, festivals, and growing mid-term rental market, hosts can maximize their rental income and provide memorable experiences for guests visiting Music City.

Best Neighborhoods in Nashville for an Airbnb Business

When searching for the ideal location to start an Airbnb business in Nashville, hosts should consider factors such as proximity to popular attractions, up-and-coming areas with growing demand, and established tourist hotspots. By analyzing data from reputable sources like AirDNA and Mashvisor, and incorporating local knowledge, we've identified the top 5 neighborhoods in Nashville for a successful Airbnb venture.

1. Downtown Nashville

As the heart of the city, Downtown Nashville offers unbeatable access to popular attractions like the Country Music Hall of Fame and Museum, Ryman Auditorium, and the vibrant nightlife on Broadway. This prime location ensures a steady stream of tourists year-round.

1. Average Occupancy Rate (2024): 78%
2. Average Daily Rate (2024): $289
3. Airbnb Seasonality: High demand throughout the year, with peaks during summer and fall
4. Estimated Annual Revenue (2024): $82,500

According to Zillow, the median home value in Downtown Nashville is $545,000, with condos being the most common housing type. For the best return on investment, consider investing in a 2-bedroom property.

2. East Nashville

East Nashville has emerged as a trendy, artistic neighborhood with a thriving food and music scene. Its proximity to downtown and unique character make it an attractive option for Airbnb guests seeking an authentic Nashville experience.

1. Average Occupancy Rate (2024): 72%
2. Average Daily Rate (2024): $175
3. Airbnb Seasonality: Consistent demand, with slight increases during summer months
4. Estimated Annual Revenue (2024): $46,000

The median home value in East Nashville is $450,000, with single-family homes being the most common housing type. A 3-bedroom property offers the best potential for high occupancy and revenue.

3. Germantown

Germantown, one of Nashville's oldest neighborhoods, has undergone a remarkable revitalization in recent years. Its historic charm, excellent restaurants, and walkability make it a sought-after destination for Airbnb guests.

1. Average Occupancy Rate (2024): 75%
2. Average Daily Rate (2024): $220
3. Airbnb Seasonality: Steady demand, with peaks during spring and fall
4. Estimated Annual Revenue (2024): $60,500

Mashvisor reports that the median property price in Germantown is $600,000, with townhouses and condos being popular options. Investing in a 2-bedroom property strikes the right balance between affordability and rental income potential.

4. 12 South

12 South is a charming, pedestrian-friendly neighborhood known for its unique shops, restaurants, and proximity to Belmont University. Its laid-back vibe and convenient location make it a popular choice among Airbnb guests.

1. Average Occupancy Rate (2024): 70%
2. Average Daily Rate (2024): $190
3. Airbnb Seasonality: High demand during summer and fall, with consistent bookings throughout the year
4. Estimated Annual Revenue (2024): $48,500

The median home value in 12 South is $750,000, with single-family homes being the most common housing type. A 3-bedroom property offers the best potential for maximizing rental income.

5. The Gulch

The Gulch is a chic, upscale neighborhood known for its high-end restaurants, boutique shops, and vibrant nightlife. Its central location and modern amenities make it an attractive option for Airbnb guests seeking a luxurious stay.

1. Average Occupancy Rate (2024): 80%
2. Average Daily Rate (2024): $350
3. Airbnb Seasonality: Consistently high demand year-round
4. Estimated Annual Revenue (2024): $102,000

According to Zillow, the median property price in The Gulch is $800,000, with condos being the most common housing type. Investing in a 1-bedroom luxury condo can yield impressive returns due to the neighborhood's high demand and premium rates.

When selecting the perfect neighborhood for your Airbnb business in Nashville, consider your investment budget, target audience, and the unique characteristics of each area. By leveraging data-driven insights and local knowledge, you can make an informed decision that sets your Airbnb venture up for success in Music City.

Maximizing Your Revenue Through In-Demand Amenities and Properties in Nashville

To set competitive prices for your Airbnb listing in Nashville, consider factors such as location, property type, size, amenities, seasonality, and competitor prices. Analyze comparable listings in your area and adjust your rates based on demand, ensuring you remain competitive while maximizing your revenue potential.

According to recent data, the most in-demand and best-performing Airbnb listings in Nashville share several key amenities that contribute to their success:

• High-speed Wi-Fi and dedicated workspaces for remote workers
• Well-equipped kitchens with modern appliances and cooking essentials
• Stylish and comfortable furnishings that reflect Nashville's unique character
• Private outdoor spaces, such as balconies, patios, or backyards
• Smart home features, like keyless entry, smart thermostats, and voice-controlled devices
• Enhanced cleaning protocols and clear communication about safety measures
• Thoughtful touches, such as local art, music-themed decor, or welcome baskets with local treats

To maximize your revenue, consider incorporating these amenities into your listing and highlighting them in your description and photos.

In terms of property types, the most popular Airbnb listings in Nashville vary by neighborhood and guest preferences. However, recent trends show that the following property types perform well:

Townhouses and Single-Family Homes:

• 2-bedroom: Average property price $450,000, potential annual revenue $50,000
• 3-bedroom: Average property price $600,000, potential annual revenue $70,000
• 4-bedroom: Average property price $800,000, potential annual revenue $90,000

Apartments and Condos:

• Studio: Average property price $200,000, potential annual revenue $30,000
• 1-bedroom: Average property price $300,000, potential annual revenue $40,000
• 2-bedroom: Average property price $400,000, potential annual revenue $55,000

Private Rooms:

Single room in a shared home: Average property price $150,000, potential annual revenue $20,000

These figures are based on data from 2022-2024 and assume an occupancy rate of 65-75%, which is typical for well-managed listings in Nashville.

To stand out in Nashville's competitive market, focus on creating a unique and memorable experience for your guests. Incorporate local elements into your decor, provide personalized recommendations for nearby attractions, and be responsive to guest inquiries and feedback. By offering a high-quality experience and leveraging in-demand amenities, you can attract more bookings and maximize your revenue potential.

Understanding Nashville Short-Term Rental Regulations

Nashville, Tennessee has specific regulations for short-term rentals like Airbnb and VRBO. Property owners must obtain permits from the Metro Codes Department before listing their properties on these booking platforms. There are two types of permits: owner-occupied and non-owner occupied, each with its own set of rules.

Owner-occupied permits are for hosts who reside in the rental property, while non-owner occupied permits are for those who do not live on the premises. Non-owner occupied permits are only allowed in certain non-residentially zoned areas. Hosts must comply with safety requirements such as installing smoke alarms, following occupancy limits, and having a responsible party available 24/7.

To obtain a permit, hosts must provide documents including a detailed floor plan, proof of liability insurance, and evidence of notifying adjacent property owners. Owner-occupied permit applicants must also prove primary residence. Permits must be renewed annually to stay compliant.

In addition to permits, hosts must collect and remit applicable taxes, including the city's hotel/motel tax and state sales tax. Failure to comply with regulations can result in penalties, including a one-year prohibition from obtaining a new permit.

Nashville appears to be relatively strict in enforcing its STR regulations based on discussions on real estate forums. However, the city also recognizes the value of STRs by allowing non-owner occupied permits in specific zoning districts.

Read our full STR regulations guide for more detailed information on Nashville short-term rental regulations, including insights from local hosts and a closer look at other policies.

Keys to Success as a Nashville Airbnb Host

To thrive as an Airbnb host in Nashville, it's essential to understand the preferences of your target guests and tailor your property to meet their needs. By incorporating popular amenities, embracing local design themes, and providing exceptional service, you can attract a steady stream of bookings and positive reviews.

Popular Amenities and Design Themes

Nashville Airbnb guests appreciate properties that offer a blend of modern conveniences and local charm. Some of the most sought-after amenities include:

• High-speed Wi-Fi and dedicated workspaces for remote workers and digital nomads
• Well-equipped kitchens with modern appliances and cooking essentials
• Stylish and comfortable furnishings that reflect Nashville's unique character
• Private outdoor spaces, such as balconies, patios, or backyards
• Smart home features, like keyless entry, smart thermostats, and voice-controlled devices

When designing your Airbnb, consider incorporating elements that celebrate Nashville's rich musical heritage and southern hospitality. Hang local artwork, provide music-themed decor, and offer thoughtful touches like welcome baskets with local treats.

Attracting Nashville Customers

To attract guests to your Nashville Airbnb, focus on creating a compelling listing that showcases your property's unique features and location. Use high-quality photos, write an engaging description, and highlight nearby attractions, restaurants, and entertainment options.

According to experienced Nashville hosts on Airbnb forums, providing exceptional customer service is key to securing repeat bookings and positive reviews. Respond promptly to guest inquiries, offer personalized recommendations, and go above and beyond to ensure a memorable stay.

Potential Challenges and Risks

While operating an Airbnb in Nashville can be rewarding, hosts should be aware of potential challenges and risks:

• Regulatory Compliance: Nashville has specific regulations for short-term rentals, including permit requirements and zoning restrictions. Failure to comply can result in fines and legal consequences.
• Market Saturation: As the number of Airbnb listings in Nashville continues to grow, hosts may face increased competition and pressure to lower prices. Differentiating your property and providing exceptional service can help you stand out in a crowded market.
• Seasonality: Nashville's Airbnb market experiences seasonal fluctuations, with higher demand during peak tourist seasons. Hosts should be prepared for slower periods and adjust their pricing and marketing strategies accordingly.

To mitigate these risks and run a successful Airbnb, Nashville hosts recommend:

• Staying informed about local regulations and obtaining necessary permits
• Investing in high-quality amenities and unique design elements to differentiate your property
• Offering competitive rates while avoiding the temptation to undercut the market
• Leveraging the city's events and attractions to attract guests during slower periods
• Building a strong reputation through exceptional customer service and attention to detail

By following these guidelines and adapting to the ever-changing market conditions, Airbnb hosts in Nashville can build a thriving and sustainable short-term rental business in one of the most exciting cities in the United States.

Using BNBCalc to Find Profitable Properties in Nashville, Tennessee

BNBCalc is a powerful tool that can help aspiring Airbnb hosts find and analyze profitable properties in Nashville, Tennessee. By leveraging the platform's data-driven insights and user-friendly interface, investors can make informed decisions and maximize their rental income potential.

1. Analyze Properties Using BNBCalc

To get started, simply enter the address of a potential investment property into BNBCalc's search bar. The platform will generate a detailed report that includes:

• Projected annual revenue from short-term and long-term rentals
• Estimated expenses, including mortgage payments, taxes, and maintenance costs
• Cash flow projections and cap rate calculations
• Customizable financial summaries with financing options

By analyzing these metrics, investors can quickly determine whether a property is likely to be profitable as an Airbnb rental in Nashville.

2. Benchmark Comparable Rentals

One of BNBCalc's most valuable features is its ability to provide data on comparable rentals in the area. Users can see how their potential investment stacks up against other short-term rentals in terms of revenue, occupancy rates, and nightly prices.

By studying these comps, hosts can identify opportunities to differentiate their listings and fetch top dollar for their rentals. For example, if nearby properties with similar amenities are commanding higher nightly rates, investors may consider upgrading their furnishings or adding popular features like smart home technology to justify a price increase.

3. Determine the Right Price and Property Size

BNBCalc's advanced algorithms can help investors determine the optimal number of bedrooms, bathrooms, and purchase price to maximize revenue potential in Nashville. By inputting different property characteristics and analyzing the resulting projections, hosts can find the sweet spot that balances upfront costs with long-term profitability.

For example, a 2-bedroom, 2-bathroom home might generate higher occupancy rates and nightly prices than a 1-bedroom unit, but the increased purchase price and maintenance costs could eat into overall returns. BNBCalc's data-driven insights can help investors navigate these trade-offs and make informed decisions.

4. Make an Offer

Once you've identified a promising investment opportunity, it's time to make an offer. BNBCalc's partnered short-term rental lender, Brian Bockholdt at Alliant Credit Union, can help you get prequalified for financing at competitive rates.

Armed with a prequalification letter and BNBCalc's detailed financial projections, you'll be in a strong position to negotiate with sellers and secure your dream Airbnb property in Nashville.

5. Use Our Tax Calculator

BNBCalc's tax calculator is a must-use tool for savvy investors looking to maximize their deductions. The platform can help you estimate potential write-offs from bonus depreciation, which allows hosts to deduct a significant portion of their property's value in the first year of ownership.

By taking advantage of these tax benefits, Airbnb hosts in Nashville can significantly reduce their taxable income and keep more of their hard-earned rental revenue.

6. Come Up with a Buy Box

To streamline your property search and investment strategy, consider creating a buy box that outlines your ideal Airbnb investment in Nashville. Your buy box should include specific criteria such as:

• Location: Focus on neighborhoods with strong demand drivers, such as proximity to downtown, popular attractions, or universities.
• Property Type: Determine whether you prefer single-family homes, condos, or multi-unit properties based on your investment goals and management style.
• Price Range: Set a realistic budget based on your financing options and desired returns.
• Amenities: Identify must-have features that will appeal to Nashville's target demographic, such as outdoor spaces, parking, or high-end finishes.

By sticking to your buy box criteria and leveraging BNBCalc's powerful analytics, you'll be well-positioned to find a profitable Airbnb investment property in Nashville, Tennessee.

Ready to start your Airbnb journey in Nashville? Use BNBCalc to analyze potential properties and make informed investment decisions. Our powerful tool provides comprehensive data to help you maximize your profits. Check out this pre-analyzed Nashville Airbnb opportunity and see how BNBCalc can help you succeed in the short-term rental market. Visit BNBCalc.com today and take the first step towards building your Airbnb business.