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Guide to Investing in Nashville Airbnb’s

Posted by Scott Layson on March 25, 2016
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short-term rental nashville

Lately, there has been a buying spree on short-term rentals in Nashville. As one of the top tourist cities in the U.S., the city remains a solid option for real estate investors. In fact, in 2014 Airbnb listed Nashville as it’s number one destination city. While websites like Airbnb and VRBO have made it easy to run a successful short-term rental business, there are a few things you should know before buying up as many investment properties as you can.

Airbnb (Short-Term Rental) Permit Info

  • Must apply in person at Metro Codes Department
  • Must have at least $1 million of insurance per occurrence
  • If the property shares a wall or driveway with another property, you must provide proof of notification to the other owner
  • Pay $50 permit fee
  • Property cannot have more than 4 sleeping rooms
  • Permits cannot be transferred with sale of property
  • Valid for 12 months & must be renewed annually

3 Types of Short-Term Rentals

The type of property will determine the availability for granting of permit.

Type 1) Owner-Occupied

  • Are owner-occupied or associated with an owner-occupied principal residence on the same lot.
  • Include the rental of an entire dwelling unit to a single party of individuals, or
  • If only part of the unit, include at a minimum a sleeping room (with bathroom), is limited to a single party of individuals, and the owner is generally present during the rental

The address on owner’s driver’s license must match the deed as recorded with the Davidson County Clerk’s office.

Type 2) Not Owner-Occupied

  • Are not owner-occupied or associated with an owner-occupied principal residence
  • Are single-family or duplex properties
  • Include rental to a single party of individuals

Type 3) Not Owner-Occupied Multifamily

(Multifamily apartments and condominiums)

  • Are not owner-occupied or associated with an owner-occupied principal residence
  • Are in multifamily structures
  • Include rental to a single party of individuals

Verify Before You Buy

The city of Nashville has placed a cap on the number of non-owner occupied (Type 2) short-term rental properties allowed in each census tract, which cannot exceed more than 3% of the housing in that area.

If you’re interested in a property in a certain area, use the Short Term Rental Permit Availability Map to see how many permits are available or how many permits are ahead of you on the waiting list.

nashville short-term rentals

Penalty for Noncompliance 

It’s important to make sure your property has the correct permit. If you have not been approved and are operating a short-term rental, the city can levy a $50 fine for every day that the property is operating. In addition, you will be placed on a one-year waiting period to become eligible for a permit.

Check With Your HOA

Although the city may allow you to operate an Airbnb or any other short-term rental in your neighborhood, if you live in a community with a Homeowner’s Association, their restrictions may not. Check with the HOA beforehand and save yourself the headache.

Thinking of Buying an Airbnb or Short-term Rental Property? Contact Us to Start Looking at Properties.

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More information can be found at the city of Nashville website.

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