Thinking about listing a downtown Nashville condo on Airbnb or buying a unit you hope to rent to visitors? Short-term rental rules in Davidson County have evolved, and downtown brings a few extra wrinkles. You want to stay compliant, protect your investment, and avoid penalties. This guide breaks down what to check, how downtown zoning affects you, and the steps to take before you host, buy, or sell. Let’s dive in.
What is a short-term rental
A short-term rental generally means renting all or part of a dwelling for fewer than 30 consecutive days. Popular platforms include Airbnb and Vrbo. The exact definition and requirements come from Metro Nashville’s ordinances and Codes, so always verify details with the appropriate Metro departments before you operate.
Why downtown rules differ
Downtown Nashville includes commercial and mixed-use zones alongside residential pockets. Zoning classification and any overlay districts shape what is allowed and which rules apply. A high-rise condo with mixed-use zoning may be treated differently from a single-family home on a residential block. Some downtown buildings are legally non-residential or operate like hotels, which can change how short-term rentals are regulated.
Permit and registration basics
In most cases, you should expect to register or obtain a permit with Metro before operating a short-term rental. Permit programs typically ask for owner information, a local contact or agent, the property address, and fees. You may also see different permits for owner-occupied and non-owner-occupied rentals. Confirm application steps and renewals with Metro Codes or the Short-Term Rental program.
Owner-occupied vs non-owner-occupied
Many cities treat primary residences more favorably than investment units. You should verify whether different categories exist, how each category is defined, and what limits apply. If your downtown property is not your primary residence, check if caps, density limits, or additional conditions could affect your plans.
Permit transfer when you sell
Policies on transferability vary. Some jurisdictions tie permits to the owner rather than the property. If you plan to sell, confirm whether an existing permit can transfer or if the buyer must reapply. This detail can affect marketing and valuation if the property’s income depends on short-term rental activity.
Zoning and where STRs are allowed
Zoning and overlay districts determine if a short-term rental is permitted in a specific building or on a specific parcel. Inside the downtown core, mixed-use or commercial zones may allow different paths than residential zones. To protect your timeline and budget, take these steps before you list or write an offer:
- Look up the parcel’s zoning classification on Metro Planning or GIS mapping tools.
- Check for overlays, such as historic or neighborhood overlays, that add rules.
- Review any neighborhood caps, spacing, or density limits that could apply.
- Verify whether your building type or use category has specific conditions.
Safety and operations checklist
Short-term rentals must meet basic safety and operational standards. Expect to see requirements that include some or all of the following:
- Smoke and carbon monoxide detectors in required locations
- Fire extinguisher and safe egress for sleeping rooms
- Posted maximum occupancy inside the unit
- A local responsible contact reachable 24/7 to address complaints
- Compliance with noise, parking, and trash rules, especially in dense downtown areas
- Displaying a permit number in advertising if required by local ordinance
Some cities require inspections prior to issuing permits, while others use self-certification. Confirm which process applies in Nashville and keep proof of compliance on file.
Taxes and financial compliance
Short-term rental income usually triggers tax obligations at both the local and state levels. In Nashville, you should plan for transient occupancy or hotel taxes and state sales or use taxes. Also confirm whether you must register for business tax purposes with Metro or the state.
Platforms sometimes collect and remit certain taxes, but that may not cover all obligations. You are typically responsible for registering, filing, and ensuring the correct amounts are remitted on time. Keep organized records of returns, payments, and platform statements.
Downtown buyer due diligence
If you are purchasing a downtown property for short-term rental use, follow a clear checklist so you do not inherit problems or overestimate income potential:
- Confirm current permit status. Request the permit, renewal receipts, and any related approvals.
- Verify zoning and overlays for the exact parcel through Metro Planning or GIS.
- Ask for documentation of complaints, citations, or fines related to the unit.
- Review safety certifications or self-certification forms submitted to Metro.
- Obtain tax remittance history for transient occupancy and state taxes.
- For condos, review HOA bylaws, rental rules, minimum stay requirements, and any special resolutions about short-term rentals.
- For multifamily buildings, confirm whether management allows short-term rentals and any building-level restrictions.
- Check parking availability and posted rules for the area. Downtown parking constraints can affect guest experience.
- Review insurance coverage. Standard policies often exclude short-term rental activity. Look for endorsements or dedicated STR coverage.
- If relevant, evaluate income history by reviewing booking statements and P&L summaries.
Seller must-knows
If you plan to sell a property that operates as a short-term rental, be proactive with documentation and disclosures:
- Clarify whether the permit is transferable. Provide the buyer with written confirmation or point them to the correct department to verify.
- Share permit records, renewal history, inspection or self-certification documents, and any correspondence with Metro.
- Provide transient occupancy and sales tax filing records for the past 12 to 36 months.
- Disclose any complaints, citations, or fines and how they were resolved.
- For condos, provide current HOA documents, meeting minutes, and any STR-related rules.
- Note that if a permit is not transferable, the future income potential may differ from your current performance.
Common scenarios to flag
- Legal non-conforming operations. Properties that began STR activity under older rules may have grandfathered status. Confirm whether this exists, what conditions maintain it, and how it could be lost.
- HOA or covenant conflicts. Even if Metro allows STRs, your building or association may prohibit or limit them. Private rules can be decisive.
- Neighborhood caps and density limits. Some areas have caps or spacing rules. Verify whether these apply to your address and category.
- Upcoming ordinance changes. Short-term rental regulations evolve. Monitor Metro Council discussions and recent ordinances that could affect downtown districts.
How enforcement works
Enforcement is often complaint-driven, with added scrutiny in dense, tourist-heavy areas. Penalties can include fines, permit revocation, and orders to cease operations. Good recordkeeping, clear house rules, and fast responses to complaints help reduce risk. Keep your permit, tax filings, and safety documentation accessible if questions arise.
Where to confirm details
Use these departments and resources to verify current requirements before you operate or close on a property:
- Metro Nashville Codes Department or Short-Term Rental program for permits, applications, and enforcement procedures
- Metro Nashville Planning Department and GIS/Zoning maps to confirm zoning and overlays
- Metro Finance or Davidson County Revenue for transient occupancy and local business tax obligations
- Tennessee Department of Revenue for state tax requirements tied to lodging
- Davidson County property and permit records for parcel history
- Your condo association or building management for private rules and approvals
- A local real estate attorney, CPA, or insurance agent for complex cases
Practical steps to get started
- Identify your property type and zoning. Confirm if your building’s use class allows STRs and whether your plan is owner-occupied or non-owner-occupied.
- Review HOA rules. Do not assume a downtown condo allows short stays. Ask for written confirmation.
- Map your permit path. Gather application documents, choose a local contact, and plan for inspection or self-certification as required.
- Build your compliance binder. Include safety checklists, occupancy guidelines, tax registrations, and filing calendars.
- Set operational standards. Draft house rules that address noise, occupancy, parking, and trash. Establish rapid response procedures for complaints.
- Track legislation. Put quarterly reminders on your calendar to check for ordinance updates that may affect downtown.
Work with a local guide
Downtown Nashville offers strong visitor demand, but rules vary by building, block, and use category. With the right due diligence, you can protect your investment and operate confidently. If you are weighing options, comparing buildings, or preparing to buy or sell, our team can help you evaluate zoning, permits, private restrictions, and market potential.
Ready to make a smart move in downtown Nashville? Connect with the local experts at Pinnacle Point Properties and Development to map your best path forward.
FAQs
Do I need a permit for a downtown Nashville STR?
- In most cases yes. Metro requires registration or a permit for short-term rentals. Confirm the exact process with Metro Codes or the Short-Term Rental program.
Can I run an STR in my downtown condo?
- Possibly, but only if both Metro rules and your HOA allow it. Many associations restrict or prohibit short stays even when zoning permits them.
Are owner-occupied and non-owner-occupied units treated differently?
- Often yes. Many jurisdictions apply different standards for primary residences versus investment units. Verify how Nashville currently defines and regulates each category.
Who collects and pays hotel and sales taxes?
- You are typically responsible for ensuring correct tax collection and remittance. Some platforms may collect certain taxes, but you should confirm local and state requirements.
Will an existing STR permit transfer to a buyer?
- Transfer rules vary. Some permits are tied to the owner and do not transfer. Confirm terms with Metro before marketing income potential.
What safety items are usually required for STRs?
- Expect smoke and CO detectors, a fire extinguisher, safe egress for sleeping rooms, and posted maximum occupancy. Verify any inspection or self-certification steps.
What happens if I violate STR rules downtown?
- Penalties can include fines, permit suspension or revocation, and orders to stop operating. Complaint-driven enforcement is common in dense areas like downtown.
