Nashville was just named the #2 best place to invest in an Airbnb property by incfile.
Like them or loathe them, Airbnbs keep getting hotter and hotter — and Nashville has many attractive options.
With an average monthly revenue of $3,911, an impressive 56% occupancy rate, a thriving tourism industry, and a cost of living that won’t break the bank, it’s no wonder Nashville is a top pick for Airbnb investment.
Not only can Airbnbs (aka STRs or Short Term Rentals) be a great way to diversify your real estate portfolio and provide steady, passive income, they may also allow you to take advantage of some very unique and valuable tax benefits under IRS Code Section 469 that can actually offset W2 or 1099 income*.
Airbnb has disrupted the traditional hospitality industry, becoming one of the most popular options for travelers looking for alternative lodging options. Airbnb investment provides a unique opportunity for investors to own and manage properties that can generate revenue throughout the year. It’s also an attractive option because of the potential tax benefits, as well as the growing demand for short-term rentals in many cities across the world.
STRs are available in many neighborhoods throughout Nashville in many price ranges—and some even come with management already in place.
Popular Airbnb neighborhoods in Nashville:
Nashville has many popular neighborhoods that are ideal for Airbnb investments, including downtown Nashville, East Nashville, and 12South. These neighborhoods offer a vibrant and diverse culture, a thriving nightlife scene, and a variety of local attractions, which make them popular among travelers. They also have a relatively low cost of living compared to other cities, making them an affordable option for potential investors.
Risks and challenges of investing in Nashville Airbnb
Like any real estate investment, investing in an Airbnb property in Nashville comes with risks and challenges. For example, local regulations and zoning laws regarding short-term rentals can change, affecting your property’s ability to generate revenue. Additionally, the property may be subject to wear and tear, and you’ll need to manage and maintain it, which can be time-consuming and costly. To mitigate these risks, it’s important to do thorough research on the local real estate market, regulations, and the specific property you’re interested in. You’ll also want to know what it takes to keep guest not only happy, but how to go above and beyond when garnering amazing reviews and repeat business. (property managers can help with this)
Unique features of Nashville’s short-term rental market
Nashville has a unique short-term rental market that sets it apart from other cities. Nashville has a thriving music and arts scene which attracts millions of visitors each year. This, combined with a growing population and a booming tourism industry, makes Nashville an ideal location for Airbnb investment. Additionally, the city has a relatively low cost of living compared to other popular Airbnb investment cities like New York or San Francisco, making it an attractive option for potential investors.
Cost of living comparison
The cost of living in Nashville is relatively low compared to other popular Airbnb investment cities, such as Washington, DC and Honolulu, HI. This makes it an attractive option for investors who are looking to minimize their expenses while still generating a return on investment. Additionally, the city has a thriving economy, with a growing population and a bustling tourism industry, which helps to support the demand for short-term rentals.
Advice for potential Airbnb investors
If you’re considering investing in an Airbnb property in Nashville, there are several steps you can take to increase your chances of success. First, partner with a real estate professional who can help you research the local real estate market, regulations, and the specific property you’re interested in. This will help you make an informed decision and reduce your risks. Secondly, determine the rental rates for similar properties in the area, and consider factors such as location, size, and amenities when setting your own rental rate. Finally, consider hiring a property management company to help manage your property and keep it in good condition. This can help you save time and money, and increase your chances of success in the short-term rental market.
As an active Nashville real estate investor myself, I keep up with the latest Nashville STR and Airbnb listings & developments as well as changes to the Nashville STR zoning ordinances and permitting regulations. Get in touch with me to find out more or to discuss properties in Nashville’s booming short term rental market that might match your investment criteria.
Rounding out the rest of the list of the Top 7 Cities for Airbnb Investment (2 of them are right here in Tennessee!) are:
1. Greensboro, North Carolina
2. Nashville, Tennessee
3. New Orleans, Louisiana
4. Birmingham, Alabama
5. Buffalo, New York
6. Memphis, Tennessee
7. Pittsburgh, Pennsylvania
Be sure to follow me on Instagram and YouTube for more Nashville real estate and real estate investing news.
Stephen Parker, Realtor® & Real Estate Investor
Buy, Sell, Invest, Relocate
Call/Text: (615) 829-6410
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DISCLAIMERS & DISCLOSURES
For education & entertainment purposes only. Stephen does not provide legal, tax, or investment advice and nothing posted, linked, or referred to here should be construed as such. Please consult with your attorney, accountant, and/or tax advisor for advice concerning your particular circumstances.