Last updated: October 2024
Nestled within the vibrant landscapes of the Southeastern United States, Tennessee stands as a beacon for travelers and real estate investors alike, offering a unique blend of cultural richness, historical depth, and natural beauty. From the soulful rhythms of Memphis to the country music heartbeats of Nashville, and from the scenic trails of the Great Smoky Mountains to the tranquil waters of the Tennessee River, the state presents an array of destinations that appeal to a diverse audience. This diversity is precisely what makes Tennessee an attractive and promising market for Airbnb and short-term rental investments.
This guide aims to highlight the top markets within Tennessee for short-term rentals, taking into consideration factors such as average rental income, occupancy rates, legal frameworks, and local attractions. By providing an insight into these thriving markets, we equip investors with the knowledge needed to make informed decisions, capitalize on Tennessee’s growing tourism, and embark on a rewarding journey in the world of Airbnb hosting. Let’s explore the scenic and bustling paths that make Tennessee a premier destination for both guests and investors alike.
Our latest tool, Chalet Intel, provides comprehensive insights and strategies tailored to investors at all experience levels. It includes a calculator, regulation overview, and much more for each market discussed. Links will be provided for each market, allowing you to conduct a more detailed analysis on your own.
1. Gatlinburg, Tennessee
Gatlinburg, TN, is a popular gateway to the Great Smoky Mountains National Park, known for its vibrant tourism industry and beautiful mountain scenery.
Gatlinburg has seen a slight increase in home values by 2.50%, with the average price at $450,000. The market thrives with an ADR of $275.00 and an occupancy rate of 60%, leading to an annual revenue of $58,800 from 800 active rentals. The gross yield here is 9.97%, with a cap rate of 6.50%.
For more insights into Gatlinburg as a rental market, explore Chalet Intel. Our platform provides detailed data and investment guidance.
2. Pigeon Forge, Tennessee
Pigeon Forge, TN, located near the Great Smoky Mountains, is a popular destination for tourists seeking outdoor activities and winter sports at nearby ski resorts.
Pigeon Forge has seen a slight increase in home values by 3.00%, with the average price at $250,000. The market thrives with an ADR of $220.00 and an occupancy rate of 60%, leading to an annual revenue of $47,520 from 1,200 active rentals. The gross yield here is 10.29%, with a cap rate of 6.00%.
For more insights into Pigeon Forge as a rental market, explore the free Pigeon Forge Airbnb Investor Guide and Pigeon Forge Rental Regulations.
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3. Memphis, Tennessee
Memphis, TN, is renowned for its rich musical heritage, including landmarks like Graceland and Beale Street, attracting music lovers from around the world.
Memphis has experienced a slight drop in home values by -4.50%, with the average home price now at $144,347. The city’s ADR is $123.00, with an occupancy rate of 57%, resulting in an annual revenue of $26,176 from 1,755 active listings. The gross yield is 15.11%, and the cap rate is 9.07%.
For more comprehensive insights into Memphis as a rental market, explore Chalet Intel.
4. Nashville, Tennessee
Nashville, TN, known as Music City, is a vibrant hub for country music, entertainment, and nightlife, attracting visitors from all over the world.
Nashville has seen a moderate increase in home values, with the average price now at $400,000. The market shows promise with an ADR of $250.00 and an occupancy rate of 55%, generating annual revenues of $50,000 from 2,500 active rentals. The gross yield stands at 8.60%, with a cap rate of 5.50%.
For more comprehensive insights into Nashville as a rental market, explore Chalet Intel.
5. Chattanooga, Tennessee
Chattanooga, TN, known for its revitalized riverfront, vibrant arts scene, and outdoor activities, is a dynamic city for short-term rentals.
Chattanooga has seen a stable increase in home values, with the average price now at $300,000. The market shows promise with an ADR of $200.00 and an occupancy rate of 55%, generating annual revenues of $40,000 from 1,500 active rentals. The gross yield stands at 8.20%, with a cap rate of 4.50%.
For more insights into Chattanooga as a rental market, explore Chalet Intel.
6. Knoxville, Tennessee
Knoxville, TN, home to the University of Tennessee, offers a mix of cultural attractions and outdoor activities, making it a popular destination for tourists.
Knoxville has seen a stable increase in home values, with the average price now at $275,000. The market shows promise with an ADR of $175.00 and an occupancy rate of 55%, generating annual revenues of $35,000 from 1,200 active rentals. The gross yield stands at 7.90%, with a cap rate of 4.20%.
For more comprehensive insights into Knoxville as a rental market, explore Chalet Intel.
Each of these markets in Tennessee offers unique opportunities for short-term rental investors, combining strong financial metrics with appealing tourist attractions. For a comprehensive overview, including detailed analyses, calculators, and regulation insights, make sure to explore our latest tool, Chalet Intel.
