Guide · City vs city
Nashville vs Austin: short-term rental rules.
Both cities license short-term rentals, but they split on the question investors care about most. Austin licenses investor-owned rentals in every zoning district. Nashville stopped issuing new non-owner-occupied permits in residential zones, so for most houses only the owner's own home qualifies.
The short answer
Which city fits your plan
| Buying an investment house | Austin. Its license is open to non-owner-occupied homes in any zone, within the two-per-site and 1,000-foot spacing limits. In Nashville, a house in a residential zone can't get a new non-owner-occupied permit, and an existing one ends when the property sells. |
|---|---|
| Hosting in your own home | Both work. Nashville's permit costs less per year but adds a guest cap, $1 million insurance and an owner who must be a natural person. Austin's license costs more up front but runs two years. |
| Downtown or commercial property | Both are possible. In Nashville, check the exact zoning district against the list of zones that allow non-owner-occupied permits before buying. |
Side by side
The rules compared
Each answer comes from the sourced market page; follow the links for citations and detail.
| Rule | Nashville | Austin |
|---|---|---|
| Investor (non-owner-occupied) rentals | New permits only in listed mixed-use, office, commercial and downtown zones. Existing permits in residential zones can renew but end when the property is sold. | Allowed in all zoning districts. Up to 2 STRs on a site with 3 or fewer units; other sites must be at least 1,000 feet apart. |
| Living in the home | Owner-occupied permits are available in most zones, but the owner must be a person (not an LLC or trust) who lives there permanently. | Not required. Owners, or tenants with the owner's written authorization, can hold a license. |
| Permit cost | $313 a year | $836.30 new, then $385.30 to renew every 2 years |
| Guest limit | 2 per sleeping room plus 4, maximum 12 guests and 4 sleeping rooms | No City guest cap |
| Taxes | 7% occupancy tax plus $2.50 per room night, plus 9.75% sales tax | 17% hotel occupancy tax (6% Texas, 11% City) |
| Insurance | At least $1 million liability per occurrence | No longer required for the license |
| Local contact | Responsible party living within 25 miles, answering 24/7 | Required if you live outside the Austin metro; must respond and be on site within 2 hours if the City asks |
| Listings | Permit number required in listings | License number in every ad; since July 2026 platforms must remove unlicensed listings within 10 days of a City notice |
| Full rules and sources | Nashville rules Verified September 26, 2026 | Austin rules Verified September 26, 2026 |
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Compares local rules for short-term rentals in each city's jurisdiction; it isn't investment advice and doesn't weigh prices, occupancy or returns. General information only, not legal or tax advice. HOA rules and deed restrictions can be stricter. See also cities that banned or restricted Airbnb.