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Short terms rentals are a hot topic in Nashville. AirBnB, VRBO, HomeAway and others have become popular and desirable for homeowners and investors alike. If you are considering making an investment in a short term rental in Nashville. Here are a few things you should consider.

The Metropolitan Government Has Instituted Guidelines

You must have a city permit to run a short term rental business from a non-owner occupied home. No more than 3% of the single-family and two-family units within each Davidson County census tract shall be permitted as non-owner-occupied short-term rental use.

Many if not most urban neighborhoods are “sold out”. You can not apply before you are the property owners and licenses are not transferable. You can review the various permit availabilities by typing in a test address here: http://maps.nashville.gov/strp/

Primary Residence v. Investor

Want to rent out a bedroom in your own house for a weekend? That’s fine. You still need a permit, but you are considered a Type 1 applicant which lies outside the 3% rule above.

Condos Have Different Rules

Generally speaking multi-family properties fall outside the 3% rule. Obviously condos are easier to manage. They also tend to have more central locations, which makes them attractive to investors and tenants alike, but almost all condominium projects have bylaws that forbid them as being used as short term rentals.

For instance, the Bennie Dillon condos in downtown Nashville have bylaws that say “no more than 25% of units can be investor-owned and all leases must be at least 180 days in length.” Similar rules hold true for the Viridian, Encore, ICON in the Gulch, Twelve Twelve, Terrazzo, Adelicia, and practically all condominium developments in Nashville.

Generally speaking this language will be inserted into bylaws by default. In order for a condominium development to allow short-term rentals, the association would have needed to amend their bylaws to specifically allow such arrangements. According to my own research, the following developments DO allow short term rentals:

  • The Quarters
  • Ambrose
  • Riverfront Condos
  • Studio One
  • Southview on 2nd

Townhomes generally also have bylaw restrictions, as do some attached HPRs (horizontal property regimes). Even single family home neighborhoods with HOA rules could feasibly ban short term rentals.

Bottom Line: Review the HOA guidelines before making an offer.

Management Fees Can Add Up

We are Realtors, not property managers. The popularity of short term rentals in cities such as Nashville with a high concentration of vacationers, tourists, and convention goers has exploded the property management industry. There is no shortage of available management companies to choose from. Here is a short list that I’ve curated in no particular order with no affiliations:

Do Your Research

As much as I’d like to be able to estimate rents, vacancies, and cap rates for you, it’s simply not something my license allows. No Realtor in Nashville can provide that service. Short term investments are such a new and speculative market to our city, that risks are inherent. With that said, we’d be happy to help you purchase, sell or finance a property that will best work for your situation.

With any investment, due diligence is warranted.  Here is an excellent article clipped from Inman News that references average Nashville booking revenues. The article caters toward agents, but I think you’ll find value in it.


TIP: Have some insider knowledge you’d like to share? Feel free to post in the comments below. Much appreciated!