What You Need to Know About Investing in Short-Term Rentals

Short-term rentals—think Airbnb, Vrbo, and vacation getaways—have become one of the hottest segments in real estate investing. And with our scenic mountain views, thriving tourism, and small-town charm in Northeast Tennessee and Southwest Virginia, this region is gaining serious traction with travelers and investors alike.

If you’re thinking about getting into the short-term rental (STR) game, here’s what you need to know to make a smart, profitable move.

Why Short-Term Rentals Are So Popular

Short-term rentals offer higher income potential than traditional long-term leases. In hot markets, it’s not uncommon for a well-run STR to earn two to three times the monthly income of a standard rental property. And because you can block off dates for personal use, many investors see STRs as a hybrid: part income stream, part vacation home.

Here in the Tri-Cities—places like Johnson City, Bristol, Kingsport, and Abingdon—short-term rentals attract everyone from outdoor enthusiasts and music lovers to families visiting East Tennessee State or tourists passing through on the way to the Smokies.

Pros of Short-Term Rental Investing

1. Higher Earning Potential
A well-marketed STR in the right location can outperform traditional rentals, especially during peak travel seasons or around local events like Bristol Rhythm & Roots Reunion or NASCAR race weekends.

2. Flexibility
Unlike long-term tenants, short-term guests come and go. You can use the property yourself when needed or take it off the market seasonally.

3. Property Appreciation
STRs often sit in high-demand areas, meaning you’re not just earning income—you’re also building equity in appreciating neighborhoods.

Challenges to Be Aware Of

1. Local Regulations
Before you buy, check local zoning laws, HOA rules, and city or county ordinances. Some areas require permits or restrict short-term rentals altogether. For example, Bristol, TN and Johnson City have specific permitting processes and occupancy limits.

2. Management Demands
STRs require more hands-on work than long-term rentals. You’ll need to manage bookings, guest communication, cleanings, and maintenance—or hire a property manager (typically charging 15–30% of your gross income).

3. Seasonal Fluctuations
Unlike year-round tenants, STR income can ebb and flow. You may earn big in summer and race weekends, but see lower bookings in January or February. Budget accordingly.

Pro Tips for Getting Started

  • Run the Numbers: Use tools like AirDNA or Mashvisor to evaluate average daily rates, occupancy rates, and revenue projections for your target market.

  • Location Matters: Walkability, water access (Boone Lake, South Holston), and proximity to events or trails all impact profitability.

  • Create an Experience: The most successful STRs aren’t just clean—they’re memorable. Think fire pits, local décor, or guidebooks with insider tips.

  • Professional Photos Are a Must: First impressions are everything. Hire a pro to capture your space in the best light.

Final Thoughts

Short-term rental investing can be a powerful way to generate passive income, build equity, and enjoy a bit of lifestyle flexibility. But success takes planning, research, and a local understanding of the market. If you're looking for guidance on where to invest—or what regulations to watch—I’m happy to help you navigate the opportunities here in Northeast Tennessee and Southwest Virginia.

 

View Investment and Multi-family properties in the Tricities.