The Most Important Things to Know About Short-Term Rentals in Nashville

Nashville’s “it-city” status reaches beyond the real estate and job markets. The last few years, we have watched Nashville explode in popularity as a place to live, new businesses to set up shop, and for vacations. The short-term rental market is blossoming in Nashville because it is the place to visit. There simply are not enough hotels, and they can’t be built fast enough to meet the demand. Short-term rentals like Airbnb, VRBO, and HomeAway provide alternative hospitality.

Short-term rentals offer visitors both a unique and affordable way to experience the city. For the homeowner, it is an opportunity to make a wide range of side income. It sounds perfect, right? You go on vacation and rent your home to someone vacationing in Nashville and make money while you are gone. Or maybe you have an extra room or basement in your home you want to rent out to holiday makers.

As the short-term rental market booms, so do the laws and restrictions around it. Here are some important things to know before you post your home on a short-term rental site.

  1. A short-term rental is 30 days or less.

  2. You have to have a permit with Davidson County before you begin accepting renters into your home. (Expect a $50 application fee.) And permits are non-transferrable.

  3. You are limited to 12 guests in four bedrooms, and you are not allowed to advertise for more than 12.

  4. You are not allowed signage outside of your home, indicating you provide short-term rentals.

  5. You have to charge hotel/motel and sales tax, and the income you make off of your rentals must be declared as income tax.

  6. There can be no food preparation by you as the host.

  7. In addition to a short-term rental permit, you need to obtain a fire marshal’s permit with smoke detectors placed strategically around the home and checked regularly.

  8. You must have a one-million-dollar liability insurance policy.

  9. You can only apply for one home at a time, and it requires a local contact. For example, you must reside in the greater Nashville area and not Florida to rent your home on a short-term basis or have a local manager for the property.

  10. If you share a wall or a driveway with a neighbor, you must inform them of your short-term rental plans.

  11. Always check with your HOA. Some HOA’s have further restrictions to short-term rentals and other HOA’s disallow it altogether. An HOA’s rules and restrictions trump the city’s.

  12. Check the short-term rental map to make sure your home is in a zone allowing for a short-term rental permit and that there are permits available in your area.  Permits are restricted to 3% of properties in each census block of the city.

  13. Obey the rules! If you receive three violations, you risk your permit being revoked.  And if revoked, it can be a year before you are eligible to reapply.

  14. Understand the restrictions, legalities, and what risks you carry. Be informed before you start the process!