Is Memphis, Tennessee Good for Airbnb Investment?

Potentially. Memphis, Tennessee combines visitor demand with long-term real estate upside.

• Presents a compelling opportunity driven by the city's rich musical heritage, historical attractions, and growing tourism sector.
• Current market conditions indicate a steady demand for short-term rentals, particularly in areas near Beale Street, Graceland, and the burgeoning downtown core.
• Property values in Memphis remain relatively affordable compared to other major U.S. cities, offering a lower barrier to entry for investors.
• The city's ongoing revitalization efforts, including new developments and infrastructure improvements, further enhance its appeal as an investment destination.
• Tourism trends show consistent growth, fueled by events, conventions, and a strong leisure travel market, ensuring a robust pipeline of potential guests.
• This combination of accessible property prices, increasing visitor numbers, and a vibrant local culture creates a favorable environment for profitable Airbnb ventures in Memphis.

$1,200–$3,500 per month based on location, season, and property quality.

• Average Airbnb earnings in Memphis typically range from $1,200 to $3,500 per month, with properties near downtown, Beale Street.
• Seasonal variations show peak earnings during spring and fall months when tourism increases by approximately 25-30%, particularly during music festivals and events.
• Key factors affecting earnings include proximity to major attractions like Graceland and the National Civil Rights Museum, property size and amenities, with entire homes outperforming private rooms by 40-60%.
• Location within specific neighborhoods dramatically influences performance, with properties in Cooper-Young, Overton Park, and downtown areas achieving occupancy rates 15-25% higher than those in outer suburbs.

Potentially strong, with a typical annual ROI of 8–15%.

• Airbnb investments in Memphis typically generate ROI between 8-15% annually, with higher-performing properties in desirable neighborhoods like Cooper-Young, Midtown.
• The average payback period ranges from 6-10 years depending on initial investment and property location.
• Memphis Airbnb properties generally outperform traditional long-term rentals by 3-6 percentage points, as long-term rentals in the market typically yield 5-9% ROI annually.
• The city's average daily rates for short-term rentals range from $75-150 depending on property size and location, with occupancy rates averaging 60-75% throughout the year.
• Properties requiring significant renovation may see initial ROI in the 6-10% range during the first few years, while turnkey properties in prime locations can achieve the higher end of returns more quickly.

Memphis, Tennessee averages 65–70% annual occupancy, with seasonal variation.

• Memphis Airbnb occupancy rates average approximately 65-70% annually, with peak seasons occurring during spring (March-May) and fall (September-November) when occupancy can reach 75-80% due to favorable weather and events like Memphis in May and various music festivals.
• Summer months typically see a slight dip to around 60-65% due to high heat and humidity, while winter months (December-February) experience the lowest occupancy at 50-60%.
• Memphis performs moderately well compared to Tennessee's statewide average of approximately 68% and slightly below the national Airbnb average of 70-72%.
• The city's occupancy rates have shown steady growth over recent years, particularly in neighborhoods like Cooper-Young, Midtown, and areas near the Mississippi River.

The strongest opportunities balance visitor demand, nightly rates, and acquisition cost.

• The best Airbnb investment neighborhoods in Memphis include Downtown/South Main which offers proximity to Beale Street, FedExForum.

Yes, but only where zoning permits short-term rentals and every required license is current.

• Memphis, Tennessee requires short-term rental operators to obtain a business license and register their property with the city, with permits costing approximately $50-100 annually and requiring proof of insurance.
• Properties are limited to a maximum occupancy of two people per bedroom plus two additional guests, with a total cap typically not exceeding 10-12 people depending on the property size.
• Owner-occupancy is not required for short-term rentals, allowing for non-resident ownership and management.
• Zoning restrictions permit short-term rentals in most residential areas including R-6, R-8, R-10, and R-15 zones.
• The registration process involves submitting an application through the city's online portal, providing property details, emergency contact information, and paying applicable fees.
• Recent regulatory changes implemented around 2020-2022 have included stricter noise ordinances with potential fines up to $500, enhanced parking requirements mandating one space per bedroom.

Tax rates vary by jurisdiction; licensing, inspection, and insurance costs are additional.

• Short-term rentals in Memphis, Tennessee are subject to several fees and taxes including a state sales tax of 7%, local sales tax of 2.25%, and a tourism development tax of 2.75%.
• Property owners must obtain a short-term rental permit from the City of Memphis costing $150 annually, plus a one-time registration fee of $50.
• Additionally, operators are required to pay a business license fee of approximately $15-25 annually depending on the property type.
• The Tennessee Department of Revenue requires registration for sales tax collection with no fee, but failure to comply results in penalties starting at $50.
• Memphis also imposes a lodging tax of 6% on stays under 30 days, which is separate from the tourism development tax.
• Property inspections may be required at $75 per inspection, and late renewal fees for permits can reach $75.