10 Best Airbnb Markets in Tennessee (Ranked for 2026)

Tennessee’s short-term rental market in 2026 is defined by sharp contrasts and clear winners. The best yields cluster in two distinct bands. Memphis at the top, where home values are low and returns tower over the national median, and the Smoky Mountains corridor, where high nightly rates drive strong returns despite pricier homes.

The spread is dramatic. Median gross yields run from 21.9% in Memphis, among the highest in the country, to just 5.1% in Franklin, a luxury suburb where home values outpace rental income. Entry prices range from $147,579 in Memphis to over $915,000 in Franklin, a span that shapes who can play in each market.

Gross yield here means the median listing’s annual Airbnb revenue divided by the median home value, a direct measure of cash-on-cash potential before expenses. It is the only metric that puts revenue and price on the same footing, and it’s why trophy markets don’t dominate this ranking.

High prices in Nashville, Gatlinburg, and Franklin keep yields far below what you’ll find in Memphis or the smaller mountain towns. The data shows that the best returns are not where the biggest names are, but where the numbers actually work for investors. For buyers who want to match with a local agent who knows how to underwrite these markets, start your search here.

Tennessee Airbnb Market Rankings 2026 (and the City-by-City Breakdown)

Data as of July 11, 2026. Each market’s annual revenue is computed from its own ADR × occupancy × 365 on trailing 12-month data, gross before expenses. The table reports the median listing’s revenue, alongside median ADR and median occupancy computed independently, so multiplying the table’s ADR by its occupancy will not reproduce the revenue figure. Gross yield divides the median revenue by the median home value (Zillow Home Value Index). See the full data methodology.

Headline revenue averages every listing, but the active-operator benchmark filters for listings with sustained booking activity. That’s the figure a serious buyer should underwrite against, it’s consistently lower than the headline, but much closer to what a committed operator can expect to earn.

1. Memphis: The Country’s Yield Outlier

Memphis leads Tennessee and nearly the nation at a 21.9% gross yield, driven by a rare mix of low home prices and steady demand. The city’s median home value is just $147,579, and even with a modest $155 ADR, the typical listing clears $32,323 in annual revenue.

May sees occupancy peak at 61%, followed by a dip to 39% in January, with spring delivering the largest share of annual revenue at 29%. In the past year, occupancy jumped 31% and ADR climbed 20%, while listing counts held steady, a sign of robust demand meeting limited new supply.

Memphis sits in the 97th percentile nationally for gross yield, ranking #14 out of 501 US markets. The payback period is just under five years of gross active-operator revenue, making it a true cash-flow play. The most common listings are 1-bedrooms, but 4-bedrooms pull in the highest revenue at $41,830 per year. Underwrite against the $30,930 active-operator benchmark for a realistic projection.

Who it fits. Buyers seeking maximum cash flow and affordable entry.

Regulation: Short-term rental rules vary by city, county, and HOA. Verify current requirements for the specific property before buying.

2. Gatlinburg: Smokies Gateway with High ADR

Strong pricing power drives Gatlinburg’s appeal, with an average daily rate of $316 far above the US median of $232. Seasonality shapes revenue sharply here. Occupancy soars to 72% in July, then plunges to just 30% in January, while summer and fall together deliver 57% of annual revenue. The surge in occupancy (+15%) and ADR (+22%) over the past year, paired with a 21% drop in listings, signals a tightening market where reduced supply is fueling higher rates and returns.

Gatlinburg’s gross yield of 13.2% places it in the 82nd percentile nationally, well ahead of the US median of 9.0%. The active-operator payback period of about 7.8 years reflects a solid balance between strong income potential and entry costs.

The price difference between two-bedroom and seven-bedroom listings stands out, with larger properties like seven-bedrooms commanding nearly triple the revenue at $99,313 per year. This bedroom mix supports various strategies, whether targeting family groups or maximizing high-dollar bookings. Gatlinburg’s analytics page breaks down revenue by property type and season.

Who it fits. Investors targeting high nightly rates and strong seasonal demand.

Regulation: Short-term rental rules vary by city, county, and HOA. Verify current requirements for the specific property before buying.

3. Pigeon Forge: Family-Friendly, Strong Fall Revenue

Peak summer demand shapes Pigeon Forge’s revenue profile, as occupancy surges to 73% in July and average daily rates reach $246, while January sees occupancy plummet to 24%. Both fall and summer each contribute 28% of the annual revenue, highlighting how the market’s family-focused attractions and seasonal events sustain bookings well beyond the school break months. This consistent seasonality supports a median occupancy rate of 52%, notably higher than the US median of 45%.

With a gross yield of 12.2%, Pigeon Forge stands in the 77th percentile of all US short-term rental markets, making it a competitive choice for investors. The payback period hovers around 8.5 years based on active-operator revenue, an attractive benchmark for underwriting in a market where the typical property is a 2-bedroom catering to family groups.

Listing supply has tightened sharply, with a 22% drop over the past year, which, alongside a 21% jump in ADR and a 10% boost in occupancy, directly fuels higher returns for operators. For more on Pigeon Forge’s property mix and seasonality, visit the full analytics page.

Who it fits. Buyers seeking group-friendly properties in a tourism-driven market.

Regulation: Short-term rental rules vary by city, county, and HOA. Verify current requirements for the specific property before buying.

4. Sevierville: High Volume, Consistent Bookings

Market dynamics in Sevierville are shaped by intense summer and fall demand, with July occupancy spiking to 72% and January dipping to just 30%. These seasonal swings mean that summer and fall together account for 55% of annual revenue, rewarding owners who can capture peak travel periods and manage off-season softness.

Recent momentum is unmistakable. In the past year, occupancy jumped 18% and ADR rose 17%, while a 19% drop in listings has tightened supply, giving remaining operators more pricing power and stronger booking calendars.

Compared to the US median, Sevierville’s 12.0% gross yield sits comfortably in the 76th percentile of 501 tracked markets, while its 53% median occupancy and $312 ADR both beat national norms. The payback period, at about 8.6 years, reflects the solid returns investors can expect in a market where the active-operator annual revenue ($48,906) nearly matches the headline figure.

The dominance of two-bedroom units (2,026 listings) offers reliable entry points, but the highest earnings go to 8-bedroom properties, which can achieve $99,003 per year at a $1,044 ADR. This structure supports both scale and range for underwriters seeking diverse portfolio options in a proven vacation hub.

Who it fits. Operators looking for scale and steady bookings in a proven vacation market.

Regulation: Short-term rental rules vary by city, county, and HOA. Verify current requirements for the specific property before buying.

5. Nashville: High Revenue, But Price Keeps Yield in Check

The seasonality in Nashville is clear. Occupancy peaks at 57% in August and dips to 31% in January, while spring and fall each contribute 27% of annual revenue. Median annual revenue is $46,390 with a $256 ADR, but home values have reached $436,519, keeping gross yield at 10.6%. Over the last year, occupancy rose 8%, ADR increased 10%, and listings fell 22%, creating a supply squeeze that supports rates but doesn’t fully offset high entry costs.

Nashville ranks in the 67th percentile for yield among US markets. The active-operator benchmark is $45,268, and the payback period is nearly 10 years. One-bedroom listings are most common, but 8-bedrooms can clear $108,000 annually. For a breakdown of Nashville’s revenue by property type and season, check the analytics page.

Who it fits. Buyers seeking high revenue potential in a major urban market, with the capital to clear a higher entry price.

Regulation: Nashville and Davidson County require a permit from the Metro Codes Department before listing a property as a short-term rental. Owner-occupied and non-owner-occupied permits have different requirements, and occupancy limits apply.

6. Chattanooga: Steady Growth with Summer Upside

Market trends in Chattanooga show a balanced approach to both seasonality and investment returns. Occupancy rates surge to 65% in July, highlighting strong summer demand, while the low point in January, at 31%, underscores the pronounced seasonal swings typical for this region. Summer generates 28% of the year’s revenue, but fall and spring are nearly as productive, capturing 26% and 25% respectively, which helps smooth out earnings and mitigates risk for operators who value predictable cash flow.

Chattanooga’s gross yield of 9.2% places it just above the US median, ranking in the 53rd percentile among 501 tracked markets. The payback period sits at roughly 11.3 years, reflecting moderate acquisition costs and solid, if not spectacular, revenue potential. This is supported by a bedroom mix where one-bedrooms dominate supply, yet four-bedroom properties command the highest earnings at $29,064 annually.

The recent 24% jump in occupancy and 14% rise in ADR over the past year point to growing guest interest and pricing power, likely driven by Chattanooga’s expanding tourism profile and appeal as a regional hub. For a detailed look at Chattanooga’s numbers, visit the analytics page.

Who it fits. Investors seeking stable returns and moderate entry costs in a growing city.

Regulation: All Chattanooga short-term rentals require a Short-Term Vacation Rental certificate, with annual renewal and zoning restrictions based on occupancy type.

7. Murfreesboro: High Occupancy, Affordable Entry

Seasonal patterns in Murfreesboro show that demand is strongest in late summer, with occupancy hitting 65% in August and average daily rates at a more accessible $149, while the slowest stretch arrives in January at just 44% occupancy.

Spring stands out as the top earner, contributing 29% of annual revenue, followed by a solid summer share of 26%. This rhythm reflects the city’s university-driven calendar and a steady influx of travelers tied to local events and mild weather, which help smooth out volatility across the year.

Compared to the US field, Murfreesboro’s 8.9% gross yield lands right at the 48th percentile, just shy of the national median, while its 56% occupancy rate outpaces the US median of 45%. The market’s payback period, about 11.6 years for active operators, signals a reasonable balance of risk and reward, especially for buyers mindful of both cash flow and long-term value.

Listing momentum has been robust, with a 24% jump in occupancy and a 33% increase in full-time listings over the past year, indicating that demand is keeping pace with new supply.

The dominance of three-bedroom homes (123 listings) and the earning power of four-bedrooms ($39,158 annually at a $334 ADR) suggest that larger properties can outperform, likely due to family and group travel patterns tied to the area’s schools and sports events. For more on Murfreesboro’s property mix and seasonality, see the analytics page.

Who it fits. Buyers looking for high occupancy and a manageable entry price in a college town setting.

Regulation: Short-term rental rules vary by city, county, and HOA. Verify current requirements for the specific property before buying.

8. Knoxville: Steady Demand, Rising ADR

Price trends in Knoxville show a balanced short-term rental market, with a median home value of $374,802 and an average daily rate of $176, both sitting below US medians. Occupancy rates reach their highest point in August at 67%, while January’s dip to 41% underscores a clear seasonal rhythm.

Summer brings in 27% of annual revenue, closely matched by spring, fall, and winter at 25%, 24%, and 24% respectively, which points to demand that remains steady throughout the year but peaks with the university calendar and summer travel.

Momentum data reveals a robust 27% year-over-year rise in occupancy and a 21% increase in ADR, even as listings expanded by 46%, reflecting Knoxville’s ability to absorb new supply without eroding operator returns. Gross yield stands at 8.4%, placing the city in the 43rd percentile among 501 US markets, slightly below the national median gross yield of 9.0% but with a higher occupancy rate than the US median.

The payback period of 12.6 years suggests moderate risk for investors, while the dominance of one-bedroom listings (284 active) caters to university visitors and solo travelers. However, four-bedroom properties command the highest annual revenue at $39,105, offering scale for those targeting larger groups or families. For more details on Knoxville’s seasonality and property mix, see the analytics page.

Who it fits. Investors seeking a stable, university-driven market with moderate home prices.

Regulation: Knoxville requires a permit to operate short-term rentals, with annual renewal and compliance with city ordinances.

9. Clarksville: Entry-Level Price, Moderate Return

Price-conscious investors will find Clarksville’s $320,976 median home value and 7.0% gross yield appealing, though returns trail the US median of 9.0%. The market’s 50% occupancy rate sits slightly above the national median, but the average daily rate of $129 is substantially lower than the US median of $232, reflecting the area’s affordability and relatively modest tourism draw.

Occupancy peaks at 68% in August, when families and military-related travelers take advantage of summer schedules, while January’s 25% trough underscores the off-season’s limited demand.

Seasonal revenue is balanced, with spring (28%) and fall (26%) combining for over half of annual income, suggesting that Clarksville avoids the sharp, single-season swings seen in more vacation-centric areas. The payback period of nearly 15 years signals that investors should weigh long-term appreciation and operating efficiency, especially since three-bedroom homes dominate the market but four-bedrooms command higher annual earnings ($16,056 at $248 ADR).

The neighborhood’s trends show occupancy slipped by 3% even as ADR jumped 48%, indicating robust pricing power despite softer demand, a dynamic likely shaped by a mix of military base traffic and steady local events. Clarksville’s property mix and seasonality get a fuller treatment on the analytics page.

Who it fits. Buyers seeking a lower-cost entry point and moderate returns in a military-influenced market.

Regulation: Most short-term rentals in Clarksville require a Short-Term Rental Unit permit. Verify current requirements for the specific property before buying.

10. Franklin: High Revenue, But Price Is the Barrier

Franklin rounds out the list with a median home value of $915,404 and annual revenue of $46,756, resulting in a gross yield of just 5.1%. Despite a $240 ADR and 50% occupancy, the high entry price stretches the payback period to over 21 years.

The summer season delivers 31% of annual revenue, with occupancy peaking at 60% in July and dropping to 33% in January. Over the last year, occupancy rose 19%, ADR climbed 26%, and listings fell 6%, pointing to a market with rising rates but little relief on the price side.

Franklin’s market ranks in the 10th percentile for yield among US markets, with the active-operator benchmark at $43,294. One-bedroom listings are most common, but 4-bedrooms earn the most at $57,212. Franklin’s revenue and property mix are detailed on the analytics page.

Who it fits. Buyers focused on appreciation and high-end properties, willing to accept a long payback horizon.

Regulation: Short-term rental rules vary by city, county, and HOA. Verify current requirements for the specific property before buying.

Why Famous Tennessee Markets Miss the Top Spots

The markets everyone can name, Nashville, Gatlinburg, Franklin, are not the automatic winners for short-term rental cash flow. High home prices in these trophy markets drag down gross yield, even as they generate impressive revenue. The best yields sit in Memphis and the smaller Smoky Mountains towns, where the entry price is lower and revenue is strong relative to cost. For investors, it’s the relationship between price and income that matters most, not just the nightly rate or occupancy headline.

How to Read These Rankings Before You Buy

Gross yield is the simplest way to compare markets. It divides the median listing’s annual Airbnb revenue by the median home value, showing how quickly an investment could pay back before expenses. But it doesn’t capture everything.

Headline revenue averages all listings, including those with little booking activity, while the active-operator benchmark reflects what a dedicated host can realistically expect. Seasonality, property type, and local regulations all shape the real-world outcome. Always verify at the property level before making a purchase, as neighborhood rules and HOA restrictions can override market-level data.

To underwrite your next Tennessee short-term rental, match with a local expert via Chalet’s agent network. For more on how to analyze markets and optimize your returns, connect with an agent who knows the numbers and the neighborhoods.