Is Franklin, Tennessee Good for Airbnb Investment?

To start an Airbnb in Franklin, Tennessee, begin by researching local zoning laws and regulations through the City of Franklin Planning Department, as Franklin requires short-term rental permits and has specific zoning restrictions that limit STRs to certain residential areas with a minimum 1,000-foot separation requirement between properties. Obtain necessary permits including a business license from Franklin City Hall, a short-term rental permit (approximately $200-300 annually), and ensure compliance with fire safety codes and occupancy limits typically set at 2 guests per bedroom plus 2 additional guests. Find a suitable property in approved zoning areas such as parts of downtown Franklin or specific residential districts, considering proximity to popular attractions like the Historic Franklin Square and music venues. Purchase comprehensive furnishings including quality mattresses, linens, kitchen essentials, WiFi equipment, and safety items like smoke detectors and fire extinguishers, budgeting approximately $15,000-25,000 for a complete 2-3 bedroom setup. Create your listing on Airbnb and VRBO platforms with professional photography highlighting Franklin's charm and proximity to Nashville (20 miles south), setting competitive rates typically ranging $150-400 per night depending on property size and location. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating key exchanges through lockboxes or smart locks, maintaining the property regularly, and ensuring compliance with Franklin's noise ordinances and parking requirements while building positive guest reviews to increase bookings in this popular Middle Tennessee tourist destination.

To identify profitable short-term rental properties in Franklin, Tennessee, focus on locations within 2-3 miles of downtown Franklin's historic district, near popular attractions like the Carnton Plantation and Carter House, or properties with easy access to Nashville (20 minutes away) while maintaining Franklin's charm. Target 3-4 bedroom homes built after 1990 with modern amenities, parking for 4+ vehicles, outdoor spaces, and unique character features that photograph well, as Franklin attracts both business travelers visiting healthcare companies like Community Health Systems and leisure tourists exploring Civil War history. Conduct pricing analysis using AirDNA and Mashvisor to identify properties generating $150-250 per night with 65%+ occupancy rates, focusing on neighborhoods like Westhaven, Fieldstone Farms, and areas near The Factory shopping district. Research competition by analyzing similar properties within a 3-mile radius, noting their amenities, pricing strategies, and guest reviews to identify market gaps. Utilize tools like Rabbu and STR Helper for Franklin-specific market data, partner with local property management companies familiar with Williamson County regulations, and leverage Franklin's tourism board data showing consistent growth in visitors seeking authentic Tennessee experiences outside Nashville's urban core.

To obtain an Airbnb/STR permit in Franklin, Tennessee, you must first apply through the Franklin Planning and Sustainability Department by submitting an application for a Short-Term Rental Permit along with required documents including proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the property, site plan showing parking spaces, and a completed affidavit of compliance with safety requirements. The application fee is approximately $200-300 with an annual renewal fee of around $150, and you must also obtain a business license from the City Clerk's office for an additional $50-75. Franklin requires that STRs be owner-occupied or have a local contact person within 30 minutes of the property, provide adequate off-street parking (typically 2 spaces minimum), install smoke and carbon monoxide detectors in all sleeping areas, maintain occupancy limits based on bedrooms (generally 2 people per bedroom plus 2 additional), and comply with noise ordinances with quiet hours from 10 PM to 7 AM. The approval process typically takes 4-6 weeks after submission of a complete application, and properties are subject to initial inspection and periodic compliance checks, with the permit valid for one year requiring annual renewal with updated documentation and fees.

Short-term rentals (STRs) are legal in Franklin, Tennessee, but operate under specific regulations established by the city. Franklin requires STR operators to obtain a business license and comply with zoning restrictions that primarily limit short-term rentals to commercial and mixed-use districts, while generally prohibiting them in residential neighborhoods zoned R-1 through R-4. The city implemented these regulations around 2019-2020 following community concerns about STRs impacting residential character and parking. Current restrictions include occupancy limits, parking requirements, noise ordinances, and mandatory registration with the city, along with compliance with state and local tax obligations. Properties must meet safety standards and cannot operate in areas specifically zoned for single-family residential use, though some grandfathered properties may have different status depending on when they began operations before the regulations took effect.

The best Airbnb investment areas in Franklin, Tennessee include Downtown Franklin's historic district, which attracts tourists year-round due to its Civil War battlefields, antique shops, and walkable Main Street lined with boutiques and restaurants. The Westhaven neighborhood offers luxury appeal with its master-planned community feel and proximity to corporate headquarters like Nissan North America and Mars Petcare, drawing business travelers and relocated executives. Areas near The Factory at Franklin provide excellent rental potential due to the entertainment venue hosting concerts and events, while neighborhoods surrounding Carnton Plantation and Carter House benefit from steady historical tourism. The Cool Springs area, though slightly outside Franklin proper, attracts business travelers due to its concentration of corporate offices and proximity to Nashville's airport, making it ideal for short-term rentals targeting the healthcare, automotive, and music industry professionals who frequently visit the region.

Airbnb properties in Franklin, Tennessee are subject to multiple lodging taxes including the Tennessee state sales tax of 7%, Williamson County hotel/motel tax of 5%, and Franklin city hotel/motel tax of 5%, totaling approximately 17% in combined taxes on short-term rental stays. The state sales tax is collected through Tennessee's Department of Revenue system, while local occupancy taxes are typically collected by Williamson County and the City of Franklin respectively. Property owners must register with the Tennessee Department of Revenue for sales tax collection and remit monthly, while local occupancy taxes are generally remitted monthly to the respective jurisdictions by the 20th of the following month. Airbnb may collect and remit some of these taxes directly on behalf of hosts through their platform, but hosts remain responsible for ensuring compliance and may need to register separately with local tax authorities. Exemptions typically apply to stays of 30 days or longer, which are considered long-term rentals rather than short-term accommodations, and certain government or non-profit related stays may qualify for exemptions under specific circumstances.

To start an Airbnb in Franklin, Tennessee, expect total costs around $485,000-$565,000. Property purchase represents the largest expense at $450,000 (median home price in Franklin as of 2023). Furnishing costs typically range $15,000-$25,000 for a complete 3-bedroom setup including furniture, bedding, kitchen essentials, and decor. Initial setup costs including professional photography, listing creation, and basic renovations average $3,000-$5,000. Permits and fees in Franklin include short-term rental permits ($200-$500), business license ($50-$100), and potential HOA approval fees. Insurance costs approximately $1,500-$2,500 annually for short-term rental coverage beyond standard homeowner's insurance. Utilities including electricity, water, internet, cable, and trash service average $200-$300 monthly. First six months operating costs encompass utilities ($1,200-$1,800), cleaning services ($150-$250 per turnover assuming 50% occupancy), supplies and maintenance ($1,000-$2,000), platform fees to Airbnb/VRBO (3% of bookings estimated at $1,500), marketing ($500-$1,000), and property management software ($300-$600). Additional considerations include potential property taxes increases due to commercial use classification and emergency fund for repairs or vacancy periods.

Airbnb properties in Franklin, Tennessee demonstrate strong profitability potential with average daily rates ranging from $150-$300 depending on property size and amenities, generating monthly revenues of $3,000-$7,500 for well-managed properties. Operating expenses typically include 25-30% for cleaning and maintenance, 3% Airbnb service fees, 8-12% property management if outsourced, plus utilities, insurance, and supplies, totaling approximately 40-50% of gross revenue. Properties near downtown Franklin's historic district and music venues achieve higher occupancy rates of 70-85% annually, while those closer to Nashville (20 minutes away) benefit from overflow demand during major events like CMA Fest. Successful operators like those managing Victorian-style homes on Main Street report net profit margins of 35-45% after expenses, with properties featuring unique amenities such as hot tubs, fire pits, or historic charm commanding premium rates. Key success factors include professional photography, responsive guest communication, strategic pricing during Nashville events, and maintaining 4.8+ star ratings, with many Franklin hosts achieving ROI of 15-25% annually on their initial property investment when factoring in both rental income and property appreciation in this desirable Williamson County market.

Airbnb investments in Franklin, Tennessee typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-15%, driven by the city's proximity to Nashville and strong tourism demand. Properties in desirable neighborhoods like downtown Franklin or near historic sites can achieve occupancy rates of 65-75% with average daily rates of $150-250, leading to gross rental yields of 10-14% annually. Initial profitability usually occurs within 6-12 months after accounting for startup costs, furniture, and marketing expenses, while full ROI recovery typically takes 3-5 years depending on purchase price and financing structure. The market benefits from consistent demand from Nashville visitors, business travelers, and tourists exploring Tennessee's music scene, with properties requiring initial investments of $15,000-30,000 for furnishing and setup generating monthly net cash flows of $800-2,200 after expenses including cleaning, management fees, and maintenance.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for investors in Franklin, Tennessee. Local real estate agents like Keller Williams Realty in Franklin and RE/MAX Elite have agents experienced in investment properties and short-term rental markets. BiggerPockets, founded in 2004, offers investment property analysis tools and connects investors with local professionals. Awning, established in 2017, provides comprehensive Airbnb investment services including market analysis and property management. Local companies like Nashville Area Real Estate Investors Association (NAREIA) offer networking and education for STR investors. RedAwning and Vacasa provide property management and investment consulting services in the Franklin market. AirDNA, launched in 2015, offers detailed market analytics and revenue projections for short-term rental properties. Local agents at Benchmark Realty and Village Real Estate Services have experience with investment properties in Williamson County. Mashvisor provides investment property analysis tools specifically for short-term rentals, while AvantStay focuses on group-friendly rental investments in growing markets like Franklin.