For your convenience, we have compiled data and information from government sources and public records to provide you with a better understanding of short-term rental regulations and ordinances in Memphis, as well as Airbnb market statistics, real estate prices and trends, and the potential for Airbnb rentals in the city.
Located in Shelby County, Tennessee, Memphis is the largest city in the state. The city lies on the Chickasaw Bluffs above the Mississippi River, where Arkansas, Mississippi, and Tennessee meet. The city of Memphis spans Tennessee's second-largest metro region, the most populous city in the state.
Memphis Travel reported that more than 10.7 million people visited the Memphis metro area in 2021. In 2019, Memphis welcomed about 12.4 million visitors. Trip durations for tourists to the area exceeded three days (3.12 days) - a 33% increase from 2019. It was recorded that on average, travelers spent $742 per night in Memphis.
Memphis boasts world-class attractions, music, and history. Memphis is located along the Mississippi River and is home to the Blues Hall of Fame, Elvis' Graceland, and some of the best barbecue in the world.
There are 41 museums in the city, including the National Civil Rights Museum, Dixon Gallery and Gardens, and Stax Museum of American Music. The city also has a vibrant art and cultural community and includes venues such as Orpheum Theatre and Cannon Centre For The Performing Arts. The African American and civil rights movements are also a part of Memphis' rich history. Slave Haven-Burkle Estate Museum and National Civil Rights Museum are highlights of the city's African American history. In addition, the city contains several parks and gardens, such as Shelby Farms Park, Overton Park, and Mississippi Greenbelt Park, which are also popular with tourists.
Despite a low supply of homes, Memphis' rental market is expected to grow in 2022 due to the high demand for housing in smaller, secondary markets. A Memphis Airbnb investment property can be very lucrative, according to Mashvisor. Apparently, Memphis is the top market for single-family homes where investors are outbidding homebuyers.
AirDNA reports that there are over 1425 active rentals in Memphis, 64% of which are listed on Airbnb. The rental demand currently at 73, has been climbing steadily since 2019 with a 17% quarterly growth rate.
*Source - AirDNA
It has been reported that Memphis is the #1 real estate market in terms of first-time buyers competing against investors for the best homes. As per data from Redfin, The median price of a Memphis home in August 2022 was $190K, an increase of 7.1% from last year.
Investors are snapping up homes in Memphis because of affordable home prices and the high percentage of renters - it's also a great opportunity to start your own Airbnb business.
Shelby County, TN defines a short-term rental property as “a residential dwelling unit” , a portion of a dwelling unit or detached accessory dwelling unit containing not more than four sleeping rooms which are used and/or advertised for rent for transient occupancy by guests.
The short-term Rental Property Act does not consider a residential unit or detached accessory unit rented to the same occupant for more than 30 consecutive days (including month-to-month leases) a short-term rental unit.
Furthermore, a residential dwelling unit or detached accessory unit rented to the same occupant in a state, federal, or political subdivision-owned dwelling unit may not be considered a short-term rental property, as are facilities licensed by the state as health care facilities, such as temporary family health care facilities, campgrounds, bed and breakfast establishments, boarding houses, hotels, and motels.
Short-term rental permits must be applied for electronically or in writing by the property owner with the county.
Original applications are subject to a non-refundable application fee of $100, which expires after 365 days.
Permit applications must be resubmitted after 365 days for a $50 renewal fee.
The county clerk’s office reserves the right to deny, suspend, or revoke permits. Compliance and revocation regulations
If your short-term rental permit application is denied, you will be notified within 15 days of submitting the completed application and given information on how to appeal.
Appeal requests must be submitted within 10 days of receiving the county's denial, and the board will address the appeal at their next scheduled meeting or within 45 days if no meeting is scheduled before the date of the appeal.
The following taxes will be charged to guests who make a reservation at an Airbnb listing in Memphis, Tennessee:
3.5% of the listing price including any cleaning fee for reservations 30 nights and shorter in Memphis.
$2 per bedroom per night for reservations 30 nights and shorter in Memphis.
I. However, if an agreement between a hosting platform and the county exists, the hosting platform may collect and pay this fee directly to the county.
II. If a hosting platform/marketplace collects all your taxes for you, you don’t need to file state sales tax returns in Tennessee.
III. The county clerk is entitled to retain a commission fee of 2.5% of the taxes collected.
State and local taxes must be assessed by all Airbnb Hosts located in Memphis and not neglected at any time.
If a short-term rental unit is operated without a permit, the owner may be fined up to $50.00 per day per unit, plus any court costs.
A short-term rental property unit's principal renter must be at least 18 years old.
LLC ownership is permitted in Memphis. According to Shelby County, TN regulations, entities may operate a short-term rental property, but only with a permit issued by the county clerk.
During each short-term rental period, a responsible party must be available 24 hours a day to address any problems and complaints.
All responsible parties' names and telephone numbers should be prominently displayed on the short-term rental property.
It is necessary to resolve complaints concerning short-term rental properties in accordance with existing state laws and county ordinances governing public nuisances, vehicles, traffic, health, and safety, as well as public peace, morals, and welfare.
Upon receipt of a citation for conditions or conduct on a permitted short-term rental property, the owner should immediately inform the county clerk's office, in writing or electronically, and within 30 days of the court's final decision regarding the disposition of such citation.
This clause pertains to owning multiple short-term rental properties which also include rentals within the same property.
Any owner of more than one short-term rental property should be required to obtain a permit for each short-term rental property. If more than one short-term rental property exists within a dwelling, each short-term rental property, as defined herein, should be treated as one unit, and a permit will be required for each unit.
Any advertising or description of a short-term rental property on an internet website, mobile application, or other hosting platforms must display a permit number for the short-term rental unit issued by the county clerk’s office.
All applicable state and local building and fire safety codes must be met by the STR permit holder, and each unit should have a five-pound fire extinguisher (rated for A, B, and C fires).
The following installation requirements must be met when installing smoke alarms approved by Underwriters Laboratory (UL) 217:
It is the permit holder's responsibility to comply with all state and local building and fire safety codes, including installing carbon monoxide detectors that meet state law standards on every habitable floor.