Short Term Rentals: A Nashville gold mine or a bottomless pit
Short term rentals like AirBnB and VRBo have become all of the rage for investors lately due to the amount of money some are making with this strategy.
Many things have changed in Nashville since the short term rental market exploded here a few years ago. First, there is a lot more competition. AirBnb shows more than 300 rentals available in Nashville currently. Just a few years ago, you would have been lucky to find more than a dozen choices.
Second, the city has enacted new laws designed to limit the number of rentals in a given area and protect the public from unsafe accommodations. Every short term rental is required to be permitted, have a safety check from the fire department and pay hotel taxes. Watch out if you decide to skirt this law as your neighbors and competitors will quickly call you out.
Last, many HOAs (Home Owners Associations) have added rules to limit or eliminate these type of rentals in their community. In fact, there are only 3 condo buildings in the downtown area that currently allow short term rentals.
Even with these rules some folks jump in feet first without fully understanding what is involved to be successful. Most underestimate the amount of work required to maintain a home to the standards expected from most guests. Others need to hear the horror stories that some hosts have experienced to make sure they are ready to let strangers live in their homes.
The most famous story concerns the Pashanin brothers in California who rented a Palm Springs condo from CoryTschogl for six weeks. When it came time for them to go, they refused to leave citing California’s eviction laws that make it difficult to force someone to leave after 30 days without paying for relocation expenses. Two months later the brothers left in the middle of the night and the host was stuck with the legal fees.
If you think this type of thing only happens elsewhere, you are sadly mistaken. A friend had a short term rental on Kentucky Lake that was destroyed by one group of renters. Not only did they leave a huge mess, but they damaged the home resulting in thousands of dollars in repairs.
AirBnb now offers liability and damage insurance for these type of problems. However, nothing can repay you for the lost time and aggravation of having the experience.
If after all of this you are still interested in AirBnb, then there is good news. I am attending a workshop on short term rentals hosted by the Greater Nashville Association of Realtors this morning. It will be led by a panel of the most experienced short term hosts in the city.
What burning questions can I get answered for you at this event?
This Deal of the Day in Nashville is no longer available. To see the latest Daily Deals, click the link below: