How Much Do Nashville Short-Term Rentals Really Make in 2026 — and How We Help Clients Outperform the Market by ~20%
If you spend any time researching short-term rentals in Nashville, you’ll quickly notice a massive disconnect between expectation and reality. One listing claims six-figure revenue. Another spreadsheet assumes 70% occupancy. Meanwhile, actual market data paints a far more conservative picture.
That disconnect is where many STR investors get burned.
Before talking about upside, optimization, or “beating the market,” it’s critical to understand what a normal Nashville short-term rental actually earns today, why so many properties cluster around that average, and what specifically has to change for a property to outperform it in 2026.
This article breaks that down using verified market data, local regulatory context, and the exact framework we use with clients investing in Nashville STRs.
What the Average Nashville STR Actually Makes
When we advise clients on STR investments, we start with third-party data, not influencer screenshots or best-case projections.
According to 2025 market data from AirDNA, which aggregates performance across Airbnb and Vrbo listings, the Nashville short-term rental market looks roughly like this:
Average annual gross revenue: ~$39,800
Average occupancy: ~52%
Average daily rate (ADR): ~$349
Active STR listings: ~13,700
Source:
👉 https://www.airdna.co/market-data/app/us/tennessee/nashville/overview
That ~$40K figure represents the true market average across thousands of listings — including professionally run properties, poorly managed units, owner-occupied STRs, and non-owner-occupied investments.
This is the baseline we anchor clients to before we ever discuss upside.
Why the “Average” Stays Average in Nashville
Nashville continues to see strong tourism demand driven by events, conventions, live music, and weekend travel. Demand is not the issue.
Execution is.
Here’s what we consistently see when reviewing underperforming STRs:
1. The wrong asset was purchased
Many properties technically qualify as STRs but struggle due to inefficient layouts, poor sleeping capacity, limited parking, weak walkability, or a lack of any visual or experiential hook. If a property doesn’t win attention within the first two seconds of scrolling, it loses bookings.
2. Furnishing is treated as an afterthought
Cheap furniture shows immediately in photos and reviews. Guests may not articulate it clearly, but it directly impacts pricing power, review quality, and repeat demand.
3. Pricing is reactive, not strategic
Most owners either price too high and kill occupancy or price too low and cap revenue. Very few treat pricing as an active revenue lever tied to seasonality, events, and minimum stay strategy.
4. The property is run like a side project
In 2026, Nashville STRs are businesses. The operators who outperform treat them that way — with systems, standards, and accountability.
Nashville STR Reality: Permits, Supply, and Regulation
One of the most misunderstood aspects of the Nashville STR market is regulation.
Metro Nashville requires a permit to legally operate a short-term rental and distinguishes between:
Owner-Occupied (OO) STR permits
Non-Owner Occupied (NOO) STR permits, which are subject to zoning eligibility and restrictions
Official Metro Nashville STR permit information:
👉 https://www.nashville.gov/departments/codes/permits/short-term-rentals
Not every online listing is legally permitted — which is why we spend significant time upfront helping clients understand where STRs are viable long-term, not just where listings currently exist.
How We Help Clients Outperform the Market by ~20%
Our clients don’t outperform the market by luck. Performance is engineered.
Here’s the framework we use from acquisition through launch.
1. Conservative underwriting first — upside second
We do not underwrite to best-case scenarios.
Our models start with conservative occupancy assumptions, realistic ADR comps, full operating expense modeling, and reserves for maintenance and furniture replacement. Only once the base case works do we identify upside levers. This protects downside risk and makes performance repeatable.
2. Asset selection that can actually win
We help clients buy properties that sleep well without feeling cramped, photograph exceptionally well, support demand without relying on fantasy occupancy, and have a clear positioning advantage within their comp set.
If a property can’t win the “thumbnail war,” we usually pass.
3. Furnishing and design built for conversion
Furnishing is not about personal taste — it’s about conversion.
We help clients design listings that are visually high-end in photos, durable in real-world use, easy to clean and maintain, and intentionally designed around the guest experience. This directly impacts nightly rates, reviews, and long-term revenue stability.
4. Strategic launch and marketing execution
A successful STR launch is not “list it and hope.”
We advise on professional photography and video, listing copy written to sell outcomes (not just features), amenity stacking aligned with how guests actually filter, and pricing strategies tied to seasonality and events. In certain cases, we also help clients think through branding, naming, and social-forward design elements that increase organic reach.
5. One-stop shop execution
Buying the property is the easy part. Executing the full buildout efficiently is where most investors struggle.
Our clients rely on us to coordinate furnishing and design resources, STR-savvy contractors and vendors, management introductions, and realistic launch timelines and punch lists.
We don’t just help clients buy STRs — we help them build operating businesses.
How This Fits Into Our Nashville STR Strategy
Everything outlined above is part of our broader Nashville STR advisory framework.
If you want a deeper breakdown of STR-eligible neighborhoods, NOO vs OO permit strategy, long-term viability, and what separates high-performing Nashville STRs from average ones, you can read our full guide here:
👉 https://www.jackcostiganrealestate.com/short-term-rental
What This Means for 2026 Expectations
Here’s the realistic takeaway we give clients:
Market average: ~$40K/year gross revenue
Well-executed listings: ~$48K–$55K/year on comparable assets
Top-tier assets: materially higher, depending on selection and execution
Beating the market by ~20% doesn’t require chasing unicorns. It requires discipline, design, and professional execution.
Final Thoughts
The Nashville short-term rental market hasn’t disappeared — but the easy version of it has.
The days of buying anything with a permit, furnishing it cheaply, and expecting outsized returns are over. In 2026, STRs in Nashville operate much closer to real businesses than passive investments. Performance now depends on disciplined underwriting, intentional design, professional marketing, regulatory awareness, and ongoing operational decisions.
This is no longer a space where shortcuts work.
The investors who continue to win are the ones who treat their STR like an actual business — and surround themselves with professionals who understand how all the pieces fit together. From acquisition and zoning to design, launch, pricing, and long-term strategy, execution matters at every step.
Our role is to help clients navigate that complexity, avoid costly mistakes, and build STRs that are positioned to outperform — not by chasing unrealistic numbers, but by doing the fundamentals better than most.
The opportunity is still very real. But in today’s market, who you work with — and how you approach it — matters more than ever.
FAQ
What is the average annual revenue for a Nashville short-term rental?
Roughly $39,800 per year based on 2025 AirDNA market data.
Is $100K per year realistic for a Nashville STR?
It can be, but it is not typical. Performance at that level depends heavily on asset quality, location, design, and operations.
Do you need a permit to operate an STR in Nashville?
Yes. Metro Nashville requires a permit, and zoning rules matter significantly for non-owner-occupied STRs.
How do your clients outperform the market?
Through conservative underwriting, better asset selection, professional design, strategic launch execution, and treating STRs as operating businesses — not side projects.
Jack Costigan is a top-producing Realtor® and founder of The Costigan Group at Compass Nashville, specializing in short-term rental, investment, luxury, relocation, and residential real estate across Greater Nashville and Middle Tennessee. Known for his data-driven strategy, modern marketing approach, and high-touch client experience, Jack advises homeowners, professionals, and investors on identifying and executing high-performing real estate opportunities.
