Nashville’s booming real estate market has made it a prime destination for rental property investors. Whether you’re considering purchasing a rental home or converting an existing property into an income-generating asset, one of the biggest decisions you’ll face is choosing between long-term and short-term rentals.
Both options offer unique advantages and challenges, and the best choice depends on your financial goals, level of involvement, and risk tolerance. Let’s break down the key differences between long-term and short-term rentals in Nashville.
What Are Long-Term and Short-Term Rentals?
- Long-Term Rentals are typically leased for six months or more, with most landlords signing year-long leases with tenants. These rentals provide steady income and require less day-to-day management.
- Short-Term Rentals (STRs) are properties rented out for a few days to a few weeks at a time, often through platforms like Airbnb and Vrbo. These rentals cater to tourists, business travelers, and event attendees.
Now, let’s compare the two based on key factors:
1. Profitability & Income Potential
Long-Term Rentals:
✅ Consistent Monthly Income – You receive a fixed rental payment each month, providing financial stability.
✅ Lower Vacancy Risk – With a signed lease, your property remains occupied for months or even years.
❌ Lower Earning Potential – While steady, long-term rental rates are often lower than what you could make from short-term stays.
Short-Term Rentals:
✅ Higher Nightly Rates – A well-located STR in Nashville can charge 2-3x more per night than a long-term rental.
✅ Surge Pricing Opportunities – High demand during peak seasons, concerts, and major events like CMA Fest allows for premium pricing.
❌ Income Fluctuation – Earnings can vary based on seasonality and occupancy rates.
2. Management & Maintenance
Long-Term Rentals:
✅ Less Frequent Turnover – You only deal with new tenants every 12 months or longer.
✅ Lower Operational Costs – No need for frequent cleanings or furnishing updates.
❌ Slow to Adjust Rent Prices – Lease agreements lock in rent amounts for months or years.
Short-Term Rentals:
✅ Frequent Price Adjustments – You can change nightly rates based on demand.
❌ High Turnover & Maintenance – Regular guest check-ins/check-outs mean frequent cleaning and upkeep.
❌ Hands-On Management Required – Managing bookings, guest communication, and property upkeep requires time or a professional STR management service.
3. Legal & Regulatory Considerations
Nashville has strict short-term rental regulations, which vary by location.
Long-Term Rentals:
✅ Fewer Restrictions – Traditional rental properties face minimal legal hurdles.
✅ Easier to Insure – Long-term rental insurance policies are straightforward and widely available.
Short-Term Rentals:
❌ Permit Requirements – Nashville requires Short-Term Rental Permits, which can be difficult to obtain in certain areas.
❌ Zoning Restrictions – Many residential zones prohibit non-owner-occupied STRs, making some properties ineligible.
❌ Higher Insurance Costs – STR insurance is more expensive due to higher liability risks.
4. Tenant Relations & Experience
Long-Term Rentals:
✅ Stable Landlord-Tenant Relationships – You build long-term relationships with tenants, leading to a more predictable experience.
✅ Less Frequent Communication Needed – Once tenants move in, ongoing management is minimal.
❌ Eviction Process Can Be Lengthy – If issues arise, removing problem tenants can take time.
Short-Term Rentals:
✅ Guest Reviews Impact Success – Positive experiences lead to better ratings and more bookings.
❌ High Guest Expectations – STR guests expect hotel-like cleanliness, amenities, and fast response times.
❌ Frequent Guest Issues – More turnover means increased likelihood of property damage or complaints.
5. Market Demand & Location Factors
- Downtown Nashville & Tourist Areas – STRs perform well in areas close to Broadway, Music Row, and major event venues.
- Residential & Suburban Areas – Long-term rentals are in higher demand in areas like Brentwood, Franklin, and East Nashville.
- HOA Restrictions – Many condo buildings and residential communities prohibit STRs altogether.
Which Rental Strategy Is Best for You?
Choose Long-Term Rentals If:
✔️ You prefer steady, predictable income with less hands-on management.
✔️ You don’t want to deal with frequent guest turnover and short-notice maintenance requests.
✔️ You want to avoid Nashville’s STR permit and zoning regulations.
Choose Short-Term Rentals If:
✔️ Your property is in a high-demand tourist area where nightly rates justify the effort.
✔️ You have the time (or a management company) to handle frequent bookings and maintenance.
✔️ You want the flexibility to use the property for personal stays when not rented.
Conclusion: Maximizing Your Rental Investment in Nashville
Both long-term and short-term rentals have their advantages, and the right choice depends on your investment goals and risk tolerance. If you’re looking for consistent income with minimal effort, long-term rentals may be the best fit. However, if you’re willing to actively manage bookings and handle maintenance, short-term rentals can offer higher profits, especially in Nashville’s booming tourism market.
If you’re still unsure which strategy is right for you, Chady Property Management can help! We specialize in managing both long-term and short-term rentals in Nashville, ensuring property owners get maximum returns with minimal stress.