Nashville did not make AirDNA's top 10. We still took on homes here this month.
On February 6, AirDNA published its 2024 Best Places to Invest in short-term rentals. No Tennessee market made the top ten.
An owner sent me that link with a one-word message: "thoughts?"
My thought is that a national ranking is a decent way to pick a metro if you have not bought anything yet, and a nearly useless way to evaluate a house you already own. Those lists reward markets with cheap entry prices and thin supply. Nashville is neither. It is an expensive market with a lot of listings and a permit regime that has been closed to new non-owner-occupied homes in residential zones since 2022.
That combination is bad for the ranking and, for someone who already holds a permitted home here, quite good. AirDNA's own outlook for the year makes the point better than its list does: when supply and demand grow at the same rate, the average listing goes nowhere and the spread between the top and bottom widens.
So instead of arguing with a list, here is the actual review we run before we agree to manage a specific home. We do it before anyone signs anything, and we do turn homes down. The homes that cleared it are the portfolio this review built.
Step one: what does this exact home comp to
Not "Nashville." Same submarket, same bedroom count, same rough quality tier, six to ten homes. What did they gross over the trailing twelve months, what is their occupancy, and what does their calendar look like for the next ninety days?
The trailing twelve is the sanity check. The forward ninety is the real signal, because it tells you what is happening now rather than what happened last summer.
If the comparable set is thin — an unusual bedroom count, a fringe location — I say so. A forecast built on three comps is a guess wearing a suit.
Step two: what does the home cost to run
Cleaning cost per turn, and how that lands against the length of stay the home will actually get. Utilities, which people always underestimate on a house that runs hot in July with the doors open. Supplies. Lawn or snow. HOA rules, if there are any, and whether they conflict with short-term use.
An owner with a 4-bedroom that only books three-night stays has a different cleaning burden than an owner with a 1-bedroom booking week-long stays, and the gross revenue number does not show it.
Step three: what is the honest gap between this home and the top of its set
This is the part owners find uncomfortable and the part that is worth the most.
Photos: usually the biggest single lever, and usually the cheapest.
Beds: how many people can genuinely sleep here versus how many the listing claims.
The outdoor space, in a city where April through October is most of the year.
The kitchen, which decides whether families book.
Parking, which in East Nashville and Germantown decides whether anyone books.
I will tell an owner "your home is a $210 night, not a $260 night, until you fix the primary bathroom." That conversation before signing is better than the same conversation in month four when they are disappointed.
Step four: what does the permit situation look like
Permit in hand, in the right name, with a known expiration date, or a clear path to one — and in a city where the non-owner-occupied door in residential zones closed in 2022, there frequently is no path. If the answer is unclear, that is where we start, and permitting is included with management — you pay Metro's fees, we do the filings and track the renewal.
Step five: does the owner want what we do
Weekly repricing — the Tuesday pull, the three questions, the small changes — means the rate moves. Some owners hate that and want a fixed number they can plan around. Some owners want to keep six weeks a year for themselves in peak season, which is completely legitimate and materially changes the revenue picture. Better to find that out in the first conversation.
Why we say no sometimes
Because taking on a home we cannot improve is bad for both of us. If the current setup is already priced well, turning fast, and holding a 4.9, then the honest answer is that they should keep doing what they are doing.
That has happened. It costs me a customer and it saves me a bad review, and frankly I would rather have the reputation.
The thing about rankings
Nashville's structural facts are strong: a permanent tourism economy, a closed permit pipeline for a whole category of investor property in residential zones, and an airport that keeps setting records. What it is not is a cheap market where you buy a house and let it run itself.
That is exactly the market where management is worth paying for, and exactly the market where a national top-ten list has nothing useful to say about your specific address.
If you want the five-step review on your home, I will do it before you commit to anything, and I will tell you if I do not think we can improve on what you have. Get started here.