Brian Decker’s Nashville Airbnb Overview

Brian Decker’s Nashville Airbnb Overview

Senior Loan Officer
Brian Decker
Published on August 11, 2022

Brian Decker’s Nashville Airbnb Overview

This week I have selected one of my favorite markets where I personally home 3 Airbnbs, Nashville, TN.

Check out my full breakdown below. If you are interested in looking into purchasing a rental home or Airbnb do not be shy.

Last month alone, I helped over two dozen people buy their first short-term rental across 5 different States. Airbnb will only continue to gain traction as we move into a recession due to families looking for less expensive ways to travel with their families.

The twang of electric guitars and the bumping baselines of folk ditties are the backing track to Nashville. Welcome to one of America’s most musical cities. This is the town that showed Hank Williams and Chet Atkins to the whole world. It’s considered the home of country music and hosts the legendary Grand Ole Opry stage. On top of all that, Nashville has positioned itself at the forefront of the modern American South. It packs in smoky BBQ joints and refined gastronomy, edgy whiskey bars, and all the grandeur of the state capitol complexes. It’s enthralling stuff. Choosing to stay at an Airbnb in Nashville is a great way to ensure you explore this Tennessee town like a local. There’s a real hodgepodge of these sorts of short-term rentals. They cover the heart of the city, around the lively streets of honky-tonks and saloons, and sit out in the more peaceful suburbs. This guide can help you home in on the sort of Airbnb that’s right for you and offers some suggestions on the hottest properties around. Nashville might have made its name in country music, but don’t forget that this is also the proud capital of Tennessee state. The monuments that testify to that coalesce in the bustling core of Downtown and the Arts District (1). They’re pretty close to the gastronomic mecca that is The Gulch (2), which is itself right next door to the legendary walks of Music Row (3) – one for anyone who’s interested in the great artists that were forged in Nashville throughout the 20th century. North Nashville (4) brings a bit more of a creative spirit to the mix with its urban street galleries. Then comes East Nashville (5), a part of town for living like a real local. Finally, you’ve got Five Points (6), a rejuvenated area of health stores and eco cafès that strikes a great balance for families. It seems like wherever you’re investing today if you’re choosing an Airbnb rental strategy, you need to take into consideration that there might be some regulations set in place. How strict these regulations depend on the real estate market you’re investing in, and how its regulators feel about short-term rental platforms like Airbnb and VRBO saturating their communities and neighborhoods with rental properties.

While some cities support and welcome short-term rental operators seeing as they support the market and economy, others have a different perspective. Nashville, TN is one of the cities which seems to be against the Airbnb wave, and because of some strong push-back from the city council, real estate investors now need to be careful with where and how they invest in Airbnb in Nashville. So did these regulations just come out of nowhere? No. The city has been trying to regulate Nashville’s short-term vacation rentals for quite some time and is now reinforcing original laws as well as new regulations. What should you do as an Airbnb Nashville investor (or a future one)? Well, seeing that the Nashville Metro Council is cracking down on illegal rentals in the city, we recommend you seriously study the Nashville Airbnb laws and the short-term rental ordinance. First, start by understanding what the city believes is a short-term rental.

A short-term rental property is a residential dwelling unit that has a maximum of four sleeping rooms. This property must be used or advertised for rent for transient occupancy by guests. These dwelling units cannot be rented out to the same occupant for more than 30 consecutive days. Otherwise, it wouldn’t be considered a short-term rental property. Something many real estate investors tend to ignore is the importance of running a licensed Airbnb Nashville property. The city is currently facing the task of cracking down on thousands of illegally operating short-term rentals. The Metropolitan Government requires short-term rental operators to obtain an operating permit. There are two main types of short-term rental permits: owner-occupied and non-owner-occupied.

Most Airbnb Nashville investors will find themselves having to apply for non-owner-occupied permits. From the name, you can understand that these are for short-term rental properties in which the owner doesn’t reside in said property. These rentals, like owner-occupied rentals, have a limit of a single party of individuals. Last year, 2,188 short-term rental permits were granted. This year, only 756 permits have been issued so far. Real estate investors must also comply with zoning restrictions as new non-owner-occupied permits aren’t allowed in residential (R or RS) zones. Note: Existing permit holders in these zoned districts are grandfathered under state law and may be eligible for permit renewal.

If the Metro locates any illegally operating Airbnb vacation rentals, the property owners are sent an initial violation notice and are then fined $50 a day. This bill (BL2019-1633) was recently introduced in the city and it’s definitely something Airbnb Nashville investors need to be updated on. Bill BL2019-1633 proposes the elimination of multi-family (RM) zoning from the list of zones that allow for non-owner-occupied permits. Another thing real estate investors need to know about this ordinance is that it is a starter bill, meaning the city might be planning on banning short-term rentals in even more zones. Whether you’re planning on investing in an Airbnb Nashville property or you’re already operating a short-term rental in the Nashville real estate market, there are a couple of rules you should keep in mind:

  • The permit holder is responsible for the guests of his/her property. All guests must abide by any applicable noise restrictions and waste management provisions.
  • Short-term rental property owners are responsible for collecting and remitting all applicable room, occupancy, and sales taxes required by state law or the Metropolitan Code.
  • Changing the ownership of the property will cancel the permit. You must renew your permit before it expires (expiration is 365 days after its issue).
  • There is a maximum of 12 occupants for short-term rentals. The principal renter of this unit must be at least 21 years of age.
  • Short-term rental operators may not be compensated by a guest who occupied the unit for less than 24 hours.
Questions about buying a Home or AirBNB,
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Senior Loan Officer
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