$40,900. That is what AirDNA reports as the average gross revenue per active Nashville STR listing over the trailing twelve months ending June 2026. It is the number that gets quoted in investment pitches, underwriting decks, and Airbnb calculator tools. It is also the number that has almost nothing to do with what actually lands in your account.
The gap between that figure and your real net is not a rounding error. By the time you run through platform fees, occupancy taxes, property management, cleaning, maintenance, insurance, and permit costs, a typical Nashville STR is netting somewhere between $22,000 and $28,000 on that same $40,900 — and that range assumes competent operations. A mismanaged property hits the low end fast.
This post builds the waterfall. Every line item, every current rate, and what each deduction actually means for your decision.
Start Here: What the Gross Revenue Figure Really Represents
The average active Nashville listing earned $40,900 in revenue over the trailing twelve months, with listings booked 54% of available nights at an average daily rate of $349. That is a real, sourced figure. But it includes your cleaning fee revenue, any pet fees, and extra-guest fees — all of which are also subject to platform deductions before the money reaches you.
It is also an average across the full market of 13,898 active Nashville listings as of June 2026. A one-bedroom condo in SoBro and a four-bedroom group home near the Gulch are both in that average. Strong four-bedroom homes near downtown gross $80,000 to $160,000 or more per year, while average listings earn near $40,000. The headline number is the mean, not your property.
So before you run a single expense, understand that the $40,900 figure is a blended market average — not a projection for your specific asset. From June 2025 to June 2026, Nashville STR revenue is down 6.1%, while occupancy is up 1.7% and ADR is down 6.0%. More bookings at lower rates. The market is filling calendars but compressing per-night yield. That matters when you model future cash flow.
Line Item 1 — Platform Fee: 15.5% Off the Top
This is the first and most misunderstood deduction. Since December 2025, all Airbnb hosts worldwide pay a single 15.5% service fee on the booking subtotal. There is no separate guest service fee. Guests see the price you set and pay exactly that amount.
What most owners miss: the 15.5% applies to the booking subtotal — nightly rate plus cleaning fee, extra guest fees, and pet fees. It does not apply to taxes or security deposits. That means the cleaning fee you built into your nightly economics is also being taxed at 15.5% by Airbnb. If your listing charges $100 per turnover clean, Airbnb takes $15.50 of that before you ever pay the cleaner.
Hosts who do not adjust their rates after the fee switch will earn less per booking. If you have not recalculated your rates to match it, you are not breaking even — you are quietly earning less on every booking.
Applied to the $40,900 average: $6,340 leaves the building on platform fees alone. Remaining: approximately $34,560.
Line Item 2 — Occupancy and Sales Tax: 15.25% of Gross Rental Revenue
Nashville's tax stack on short-term rentals is not optional, and platforms do not absorb it for you — it comes out of what guests pay and flows through your account to Metro Nashville and the state of Tennessee.
Nashville imposes a 6% hotel occupancy tax on all short-term accommodations within Davidson County. When combined with Tennessee's 7% state sales tax and the 2.25% local sales tax, the total tax burden for lodging in Nashville reaches 15.25%. On top of that, Nashville STR operators collect approximately $2.50 per night as a flat Metro fee.
The common misconception is that Airbnb handles all of this. Airbnb does remit Tennessee state sales tax automatically. The Metro Nashville hotel occupancy tax, however, requires separate registration and monthly filing with the Metro Finance Collections office — returns are due by the 20th of each month. If you are not filing that separately, you have a compliance problem, not a platform problem.
At 54% occupancy on a 365-day calendar, that is roughly 197 booked nights. At $349 ADR, the nightly $2.50 Metro fee adds approximately $493 per year before the percentage-based tax even starts.
Tax load on $40,900 gross: approximately $6,237 plus ~$493 in nightly fees. Remaining after platform fees and taxes: approximately $27,830.
Line Item 3 — Property Management: 20% to 30% of Gross Revenue
If you are not self-managing, this is the line item that makes or breaks the deal. Full-service Nashville STR management companies charge 20% to 30% of gross revenue — not profit, gross revenue. On a Nashville property earning the AirROI median of roughly $44,000, the difference between a 20% and 30% management fee is $4,400 per year — enough to cover property taxes in many markets or shift a marginal deal from positive to negative.
That is not a small rounding error. A 25% management fee against $40,900 gross is $10,225. Management fees reduce net operating income directly. A $44,000-revenue property paying 25% management fees has $11,000 less NOI than a self-managed equivalent — a gap that compresses cap rate and every downstream return metric.
The self-management path saves real money, but it is not passive income. Dynamic pricing, guest communication, turnover coordination, and maintenance response are genuine operational jobs. The STR operators who underperform are almost always the ones who chose self-management and then managed passively.
Management fee at 25% of $40,900: $10,225. Running total after platform fee, taxes, and management: approximately $17,605 remaining before fixed operating costs.
Line Item 4 — Cleaning and Turnover: The Cost That Scales With Occupancy
At 54% occupancy across a standard Nashville STR — call it a three-bedroom, which is the typical unit in the market — you are looking at roughly 60 to 70 turnovers per year assuming average stays of 2.8 to 3 nights. Professional STR turnover cleaning in Nashville currently runs $120 to $200 per turn depending on property size, time of day, and whether the cleaner sources their own supplies.
At 65 turns at $150 average: $9,750 annually. That figure does not include deep cleans, laundry service if outsourced, or supply restocking between stays.
The most common STR operating expense categories are cleaning and turnover, utilities, internet, maintenance, insurance, furnishing refresh, and platform fees. Cleaning is often one of the largest and most variable costs because STR properties turn over frequently. This is where budget underwriting frequently breaks. Investors model 40 turns and experience 70.
Estimated annual cleaning cost: $8,000 to $12,000. Use $10,000 as the planning figure for a mid-size Nashville STR.
Line Item 5 — Maintenance, Supplies, and Furnishing Refresh
A property running 54% occupancy does not stay showroom-ready on its own. Budget 3% to 5% of gross revenue annually for maintenance and repairs — $1,200 to $2,000 on a $40,900 property — plus a separate furnishing refresh reserve. Nashville STRs that compete at the top of their comp set reinvest $2,000 to $4,000 per year in soft goods, kitchen equipment, and amenity upgrades. Skip this for two years and your review score tells the story.
Consumable supplies — toilet paper, shampoo, dish soap, coffee, paper towels — run $600 to $1,200 annually for a property doing 60-plus turns. Underwriting with 25 to 35 percent total operating costs before seasonal dips is the standard framework before trusting any projection.
Combined maintenance, supplies, and refresh: approximately $4,000 to $7,000 annually.
Line Item 6 — Insurance and Annual Permit Fee
Metro Nashville requires every STR permit applicant to carry a minimum of $1 million in liability coverage applicable to short-term rental use, with a certificate of insurance naming the Metro Government as an additional insured. Dedicated STR insurance policies — separate from standard homeowner's insurance, which typically excludes commercial lodging use — run $1,500 to $2,500 annually for a Nashville residential property.
The Metro STR permit itself costs $313 annually for both owner-occupied and non-owner-occupied permits. Small in the context of the full cost stack, but required for every operating year. And unlike the permit fee, the insurance is not optional or deferrable — operating without STR-specific coverage means a single guest claim can exceed what your carrier will honor.
Insurance and permit: approximately $1,800 to $2,800 annually.
The Waterfall in Full: Where $40,900 Ends Up
Let's run the full stack on the AirDNA average for a managed Nashville STR at the mid-range of every estimate:
- Gross revenue: $40,900
- Airbnb platform fee (15.5%): –$6,340
- Nashville occupancy and sales taxes (15.25% + ~$493 in nightly fees): –$6,730
- Property management (25% of gross): –$10,225
- Cleaning and turnover (65 turns × $150): –$9,750
- Maintenance, supplies, furnishing refresh: –$5,500
- STR insurance and annual permit: –$2,200
- Estimated net owner income: approximately $10,155
That is real. Not a worst-case scenario — a mid-market, managed Nashville STR at the AirDNA average gross. And it does not yet include mortgage, property taxes, or HOA fees if applicable, all of which reduce that figure further.
The self-managed version — which eliminates the $10,225 management fee — changes the picture significantly: net climbs to approximately $20,380 before debt service. That is still a thin margin on an asset that likely cost $500,000 or more to acquire.
What This Actually Means for How You Underwrite a Buy
The number investors should never use to evaluate a Nashville STR purchase is the gross revenue projection from any automated calculator. Those tools project top-line revenue. They do not model your platform fee structure, your specific tax liability, or whether your property will actually be able to obtain a non-owner-occupied permit under Metro Nashville's current zoning rules — which prohibit new non-owner-occupied STR permits in all traditional residential zones (R, RS, and AR2A).
The buy decision needs to be run on net operating income, not gross. And the net calculation has to start from a verified permit-eligible property, a confirmed tax registration plan, and a management structure that is explicit — not assumed.
Properties that gross $80,000 to $100,000 — the four-bedroom group homes near Downtown and the Gulch that drive Nashville's STR economics — change this math substantially. A $90,000-gross property running the same cost percentages clears roughly $22,000 to $30,000 in net owner income after management, which is a fundamentally different investment thesis than the average-market unit. The right Nashville STR is a product decision before it is a purchase decision.
Our Nashville STR advisory practice runs this waterfall before any offer goes in — including permit verification, zoning confirmation, and revenue modeling tied to the actual comparable listings in the specific submarket, not the city-wide average. If the deal does not clear on a fully-loaded basis, we say so before the earnest money is at risk.
For investors who want to see how the numbers move across different Nashville neighborhoods, the neighborhood-level breakdown shows real performance spread between East Nashville, SoBro, the Gulch, and Germantown — markets that are not interchangeable even though they all carry the same city-wide average label.
If you are relocating to Nashville and evaluating whether an owner-occupied STR strategy makes sense alongside a primary residence purchase, that is a different model — and one where the permit path is considerably cleaner. The Nashville relocation advisory covers how out-of-state buyers are structuring those dual-use purchases in 2026.
The Costigan Group was featured in USA Today specifically for this underwriting-first approach to Nashville STR investment — and the full press coverage reflects how that framework has held up as the market has compressed.
The gross revenue number is fine as a starting point. It should just never be the ending point. If you are buying a Nashville STR on projected gross income, you are not underwriting the deal — you are hoping the math works out.
Run the waterfall before the offer. Schedule a call with our team and we will build the full net model on any property you are evaluating.
Related reading
- Nashville Short-Term Rental Investment
- Nashville STR Underwriting: The Occupancy Assumptions Smart Investors Use
- The Complete Nashville Short-Term Rental Investment Guide for 2026: Permits, Underwriting, Neighborhoods, and Exit
Frequently Asked Questions
Does Airbnb remit Nashville occupancy taxes on my behalf?
Partially. Airbnb automatically collects and remits Tennessee state sales tax. However, the Metro Nashville hotel occupancy tax — 7% of gross rental receipts plus a $2.50 per-night fee — requires separate registration and monthly filing directly with Metro Nashville's Collections office. Hosts who assume Airbnb handles all of it are routinely surprised by back-tax liability. Confirm your registration status with Metro Finance before your first booking, not after your first audit.
What is the real Airbnb platform fee for Nashville hosts in 2026?
On December 1, 2025, Airbnb raised its host-only fee to 15.5% for most hosts. That 15.5% is now the standard structure replacing the split-fee model. It applies to your entire booking subtotal — nightly rate plus cleaning fee plus any add-on charges. If you have not recalculated your listed rates since the switch, your net per booking is lower than you think.
Can I get a non-owner-occupied STR permit anywhere in Davidson County?
Non-owner-occupied STR permits are prohibited in all traditional residential zones including R, RS, and AR2A. New non-owner-occupied permits are only available in select non-residential and mixed-use districts. If you are buying a property specifically to operate as a non-owner-occupied STR, zoning and permit eligibility must be confirmed before the offer — not after closing. The permit does not transfer with the property.
What is the difference between gross revenue and net owner income for a typical Nashville STR?
The gap is substantial. On a Nashville STR averaging $40,900 in gross revenue with professional management, the realistic net owner income — after platform fees, occupancy taxes, management, cleaning, maintenance, insurance, and the annual permit — lands in the range of $10,000 to $20,000 depending on whether the property is managed or self-managed. That figure does not include mortgage, property taxes, or HOA fees. The gross-to-net spread is typically 50% to 75%, meaning the gross revenue figure alone is not a reliable indicator of investment performance.
How much do Nashville STR property managers charge in 2026?
Full-service Nashville STR management companies charge 20% to 30% of gross revenue — not net, gross. At the market average, that means $8,000 to $12,000 annually on a $40,900-gross property. Some co-host arrangements charge closer to 15%, but typically with more owner involvement in operations. The management fee is the single largest variable in the net income equation and the first thing to negotiate and model before committing to a managed structure.
Does the $2.50 per-night Metro Nashville fee apply to all STR bookings?
Yes. Metro Nashville charges a $2.50 nightly flat fee on all short-term rental bookings in addition to the percentage-based hotel occupancy tax. At 54% occupancy across a full calendar year — roughly 197 booked nights — that adds approximately $493 annually before any percentage calculation. Small individually, but it compounds across a portfolio and should be included in any serious underwriting model.
What is a realistic cap rate for a Nashville STR after all operating costs?
On the AirDNA average-market Nashville property, net operating income after all operating costs (excluding debt service) lands approximately in the $10,000 to $20,000 range. Against a typical acquisition cost of $450,000 to $650,000 for a permit-eligible Nashville townhome or condo, that implies a cap rate of 1.5% to 4.5% — a wide range driven almost entirely by management structure, property type, and submarket location. Top-performing four-bedroom properties near Downtown running $80,000 to $100,000 in gross can clear 5% to 7% cap rates. Average market units financed with a conventional mortgage often do not cash flow meaningfully at current Nashville price points.
About The Costigan Group
Jack Costigan is the founder of The Costigan Group at Compass in Nashville, where his team has closed more than $100 million in real estate across Greater Nashville and Middle Tennessee. Specializing in luxury advisory, investment, and short-term rental real estate, Jack is known for a data-driven approach that helps buyers, sellers, and investors understand the numbers, the neighborhood, and the long-term value before making a decision. Featured in Apple News as one of Nashville's most sought-after short-term rental advisors, Jack pairs deep local expertise with modern marketing and a strategy-first approach to real estate. Learn more at thecostigangroup.com.
