Welcome to Nashville, the city where turning a home into an Airbnb rental is more than a passing fad for homeowners: it’s a lifestyle. Short-term rentals are massively boosting the Nashville economy ($477 million dollars-worth exactly), bringing outside money into local businesses and the average home-owning family.
But is investing in a short-term rental right for you?
With a decision of this magnitude, it’s best for you to be fully aware of everything you’re getting yourself into. Is there anything different about Nashville short-term rentals versus those in other places? Are there any cons, and if so, what are they? Do the pros outweigh them or is owning a short-term rental just an enormous hassle? Let’s open the conversation and take an honest look at investing in an Airbnb in the amazing city of Nashville. One way or another, this kind of investment is sure to change your life.
It’s safe to say that income supplementation is the number one reason most people get into the Airbnb business. It’s a no-brainer. Stay in an extra room in my home (or rent the whole thing) and help me pay for my mortgage. No taking on extra side-jobs. No working late nights or weekends. No missing a house payment. In my experience, an Airbnb renting out at 85% capacity a month can bring in as much as 2x my mortgage payment! Plus, you can take Airbnb in doses you can handle. You can rent out one or two bedrooms in your house or even on occasion, your entire home. If you want a full-fledged Airbnb business, you can invest in multiple properties and turn them into happy habitats for crowds of guests.
How many times have you wanted to host friends who were coming through town or family during the holidays, but couldn’t do it because you didn’t have the space? If you’re anything like me, having extra beds for guests is a huge perk. Of course, you can do this by setting up your primary home to host more people, but owning additional homes makes hosting guests an absolute breeze. Extra family for Christmas? No problem. All your college friends for New Years? The more, the merrier. You’ll feel like Oprah: “You get a house and you get a house! Everyone gets a house!”
Not everyone who operates an Airbnb/VRBO owns multiple homes. But if you do, you can earn monthly income from your properties, while they continue to go up in value. This gives you the rare opportunity to profit now and profit later. Having multiple properties remains one of the surest roads to financial freedom used by financial experts such as the wealthiest real estate investor in the US, Donald Bren, among many others. Nashville, in particular, is considered one of the best markets to invest in within the United States.
Even if you’re just using your primary home for Airbnb, you have the opportunity to rent it out entirely and enjoy the summer wherever floats your boat–Tahiti, for example. I have a few homes I bounce around between depending on which ones are renting out. Sometimes I even take a hiatus from the city itself, traveling to places like Europe, all while earning money from opening my homes up to guests. Whether you have multiple homes or just one, short-term renting is a lifestyle jam-packed with freedom and fun.
One of the irresistible beauties of short-term rentals is they alleviate the wearing down of your home that can often happen when renters live in it for a year or more. In between your short-term guests’ stays, you can always have a handyman visit and make whatever little repairs come up. (Chances are they will be very minimal compared to long-term renting repairs.) A nice bonus is that most Airbnb/VRBO guests will be great about following the house guidelines you set and will do their best to clean up after themselves and take care of your home. It’s the difference between someone who looks at your house as a great place to vacation for a few days and someone who views your house as “their own.”
Hot as in sizzling hot, the Nashville short-term rental market has continued to boom for a number of reasons. Nashville continues to be true to its nickname–Music City, USA–while also branching out into areas such as fashion, development and entrepreneurship, and the $84 billion dollar healthcare industry. In direct benefit to short-term renting homeowners, the city has lately received a reputation for being a tourist hotspot. Take Nashville’s notorious bachelorette parties, for instance. These groups appreciate the short-term rental scene more than most other parties because it gives them the flexibility to invite all of the bride’s friends, explore Broadway and all of its honky tonk bars, eat breakfast in bed, stay out as long as desired, and pay for an entire home for a weekend versus a hotel room for one night.
You have two ways you can go about this. 1.) You can manage the Airbnb yourself. However, this requires an adherence to schedules and ensuring that you are available for questions and servicing your guests when they need it (which can be, truth be told, any time at all). 2. There are many management services and individual managers that can help you keep your Airbnb in order, cleaned and fresh, guest after guest. While the cost of these managers may take a hefty bite out of your rental revenue, it may be worth the price considering how much hassle you’ll save yourself from.
If you’re hoping to make short-term rentals your primary source of income, you might want to think twice about it. From my experience, sometimes you’ll have your place booked out all summer, while other times you won’t see a booking for weeks, sometimes longer. It’s best to go into the short-term rental business with something else bringing in your primary income so you don’t resort to throwing in the towel when the going gets rough. Airbnb/VRBO can be a fantastic source of income provision, just don’t depend on it to be consistent.
Although city regulations have fallen somewhere between an annoyance and a terror for short-term renters in Nashville lately, we seem to be getting a handle on them as a community. No one can say for certain how the chips will fall or what kind of tricks hotel lobbyists will try pulling the next couple years, but with efforts like Airbnb’s six-figure TV ad campaign aimed at council members and community leaders who’ve expressed dissatisfaction at council hearings, we can hope for the best and keep running our rentals in the meantime.
At the end of the day, whether or not you should invest in the purchasing, upkeep and management of a Nashville Airbnb is entirely up to you and the kind of lifestyle you want to have. For many of you, this life of flexibility and freedom is going to be a dream-come-true. For others, it may be something you’ll want to consider down the road when your season of life changes. Either way, short-term renting is here to stay. Perhaps it will change quite a few things for the better in our beautiful Nashville.
This expertise was provided by Dwell Music City, your trusted authority on all things related to real estate in Nashville. It is our pleasure to answer any questions you may have. Contact us here for more information.
City Regulations News: The Tennessean