Short Term Rentals

Nashville

Short-term rental (STR) properties have become increasingly popular in recent years.  Nashville is capitalizing on this market with more diverse and affordable rental options, great for travelers and tourists. Homeowners greatly benefit as well by having the option to list their property as a full-time or part-time vacation rental on user-friendly sites like Airbnb & VRBO.  Data coming out of Nashville reveals that STRPs have seen substantial month-to-month performance growth and consistently outperform hotel occupancy numbers.  As one of the first markets to take advantage of this growing housing trend, it may be time to take a closer look. How can we help you meet your STR and investment goals?

Short Term Rental Permits

In Nashville and Davidson County, the law requires that anyone wishing to rent a property on Short Term Rental Property (STRP) websites such Airbnb and HomeAway must receive a permit from the Metro Codes Department prior to listing. Metro has determined that not all short-term rentals are created equal. Let's review the two different types of STR permits Nashville has to offer.

Which Permit Does Your Property Qualify For?

The fastest way to determine which short-term rental permit your property qualifies for is to enter your address on the Metro Parcel Viewer. On the top right-hand corner of the page, you’ll find a magnifying glass symbol. Click that symbol and select “Address or Intersection.”Type in your property’s address and hit “Search.” After your property’s information has been pulled, you’ll see several tabs on the left-hand side. Select “Zoning History.” If your property has one of the NOO zonings listed above, you’ll qualify for a non-owner occupied permit. If your property does not have one of those zonings, you may only qualify for an owner-occupied permit.

Owner Occupied (OO):

Metro Nashville gives the following guidelines for what qualifies as an Owner-Occupied Short-Term Rental.

  • Owner-occupied residence or on a lot with an owner-occupied residence.
  • Includes the rental of an entire dwelling unit to a single party of individuals, or
  • If only part of the unit, includes at a minimum one sleeping room and a bathroom, and is limited to a single party of individuals.
  • Owner-occupied status must be confirmed by two documents showing that the owner in fact occupies this as their primary residence. Acceptable documents may include a Tennessee driver’s license, State of Tennessee ID card, Davidson County voter registration card, pay stub, work ID or badge, IRS W2 form, or bank statement.
  • Such documentation of primary residence address must match the deed as recorded with the Davidson County Clerk's office.
  • To qualify for an owner-occupied permit, the owner of the property must permanently reside at the property and be a natural person or persons. LLCs, corporations, trusts, partnerships, joint ventures and other entities are ineligible for owner-occupied permits.
  • Only one permit shall be issued per lot in single-family and two-family zoning districts.
  • The property ownership of two-family units cannot be divided. They shall be owned by the same person and one of the two units shall be the primary residence of the owner. Two-family units can include detached duplexes divided under a Horizontal Property Regime (HPR).
  • Permits for Specific Plan (SP) zoned properties or properties within a Planned Unit Development (PUD) will be issued only if allowed by the SP or PUD. Please contact the Metro Planning Commission for questions regarding the conditions of the SP or PUD, planningstaff@nashville.gov or 615-862-7190.

Owner-occupied permits are the best route for individuals that permanently reside in the home where they want to operate a vacation rental. Since the ownership entity of the real estate must be in the owner’s actual name (and not an entity), it largely excludes short-term rental investors. New legislation came about because neighborhoods were tired of having to deal with travelers & tourists. These permits are intended for residential neighborhoods where the short-term rental aspect of the property will be ancillary to its primary use as a home.

Non-Owner Occupied (NOO):

Here are Metro Nashville’s guidelines as to which properties may qualify for non-owner occupied permits.

  • Are not owner-occupied or on a lot with an owner-occupied principal residence.
  • Rentals are limited to a single party of individuals.
  • Ownership information on the application must match the deed as recorded with the Davidson County Clerk's office.
  • New not owner-occupied permits will only be issued as a use permitted with conditions (PC) in RM2 through RM20-A, RM40 through RM100-A, MUN and MUN-A, MUL and MUL-A, MUG and MUG-A, MUI and MUI-A, OG, OR20 through OR40-A, ORI and ORI-A, CN and CN-A, CL and CL-A, CS and CS-A, CA, CF, DTC North, DTC South, DTC-West, DTC Central, SCN, SCC and SCR zoning districts. UPDATE: Pursuant to BL2019-1633, new permits in RM zones will no longer be issued effective January 1, 2022.Such documentation of primary residence address must match the deed as recorded with the Davidson County Clerk's office.
  • Permits for Specific Plan (SP) zoned properties or properties within a Planned Unit Development (PUD) will be issued only if allowed by the SP or PUD. Please contact the Metro Planning Commission for questions regarding the conditions of the SP or PUD, planningstaff@nashville.gov or 615-862-7190.
  • New not owner-occupied permits are not permitted in AR2A, R, or RS zoned properties. Existing permit holders in these zoned districts may be eligible to apply for renewals, but those permits are not transferable if the property is sold or transferred.

All zoning that permits non-owner occupied short-term rentals is commercial. Metro decided to allow NOOs in commercial zoning where the city intended businesses to be operated. Many investors have moved to building or buying their short-term rentals in commercially zoned areas not only because of government regulation, but also because these areas can be attractive for guests since they are near the cities hot spots and attractions.

Applying for a Short Term Rental Property Permit

There are multiple steps in the process for receiving a Short Term Rental Property (STRP) permit. Being prepared before you meet with a zoning examiner to start the application process can greatly reduce delays or repeat trips to the Development Services Center. DO NOT list a property or unit online until you have received a permit, or you will be ineligible to apply for a permit for one year.

Download the full short term rental property checklist HERE

  • Create A Floor Plan
  • Obtain Proof Of Liability Insurance
  • Provide Proof Of Notification To Adjacent Property Owners
  • Provide Proof Of Residence
  • Provide Proof Of Tax Payments
  • Provide A Responsible Party
  • Obtain A Homeowners Association Statement
  • Provide A Notarized Affidavit
  • Meet With A Zoning Examiner
  • Schedule The Fire Marshal’s Inspection
  • Pay The Permit Fee
  • Post Your Permit On Your Listing
  • Remit all required Taxes
  • Renew Permit Annually

Short Term Rental Property Operation Rules and Requirements

Requirements for operating a Short Term Rental Property (STRP) include but are not limited to:

  • Any signs on the property must be compliant with Title 17, Chapter 32 of the Metro Code related to sign regulations (MCO 17.32).
  • All STRP occupants shall abide by all applicable noise restrictions contained in the Metropolitan Code and all applicable waste management provisions of the Metropolitan Code. The permit holder is responsible for the activity of STRP guests.
  • The STRP shall maintain smoke alarms in all locations required by the Fire Marshal.
  • No recreational vehicles, buses, or trailers shall be visible on the street or on the property in conjunction with the STRP use.
  • No food shall be prepared for or served to the transient by the permit holder or manager.
  • The principal renter of a STRP unit shall be at least 21 years of age.
  • The maximum number of occupants permitted on a STRP property at any one time shall not exceed more than twice the number of permitted sleeping rooms plus four (maximum of 12).
  • Simultaneous rental to more than one party under separate contracts shall not be allowed.
  • The STRP owner shall not receive any compensation or remuneration to allow occupancy of an STRP for a period of less than 24 hours.
  • The permit holder shall be responsible for collecting and remitting all applicable room, occupancy, and sales taxes required by state law or the Metropolitan Code.
  • The name and telephone number of the local responsible party shall be conspicuously posted within the STRP unit. The responsible party shall answer calls twenty-four hours a day, seven days a week for the duration of each short term rental period to address problems associated with the STRP.
  • An STRP permit shall not be transferred or assigned to another individual, person, entity, or address. Further, a permit does not authorize any person, other than the person named therein, to operate an STRP on the property.
  • The STRP permit may be revoked, whether by a court of proper jurisdiction or by the Department of Codes Administration, upon determination of three violations of any ordinance or law of general application.
  • A STRP permit shall expire three hundred sixty-five days after it is issued unless it is renewed prior to its expiration.
  • Changes in the ownership of a property will result in the cancellation of a permit. For example, this includes changing of ownership from a person to a trust or LLC, or vice-versa.

Need Help Managing Your Short-Term Rental?

If you would like assistance with completing your permit application or managing your property, The Six1Five Living Team is happy to provide recommendations for reputable, local property management companies. Contact us today to get started!


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