Introduction
As the short-term rental market continues to thrive across the United States, investors are seeking lucrative opportunities in various cities. Memphis, Tennessee, with its rich cultural heritage, vibrant music scene, and iconic attractions, presents an enticing prospect for short-term rental owners.
In this guide, we will explore the state of the (Airbnb) short-term rental market in Memphis, delving into key statistics, regulations, and potential returns. Additionally, we will answer some essential questions about Memphis, such as its climate, population, tourist attractions, and more. Let’s dive in!
Market Overview
To understand the dynamics of the short-term rental market in Memphis, let’s delve into some key statistics and figures.
Supply
AS of July 2025, the most popular homes are 1-bedroom homes, comprising 26.36% of inventory. This is followed by 2 and Studio bedroom homes at 20.60% and 20.32% of the total inventory, respectively.
Homes Appreciation
AS of July 2025, according to Zillow, homes in Memphis experienced an depreciation of 0.77%. This data indicates a significant decrease in property values.
Median Home Value
As of January of 2025, Homes in Memphis have depreciated by 0.77%. The median home value in Memphis is $145,900 as reported by Zillow. This figure highlights the city’s robust real estate market and the potential for long-term property appreciation.
Active Short Term Rentals
AS of July 2025, Nashville boasts a significant Airbnb rental market, with approximately 2,003 active rentals. This abundance of available properties provides ample opportunities for investors and homeowners looking to capitalize on the tourism demand.
Average Daily Rate
The median ADR for the market is $179. The Average Daily Rate is the highest for 4-bedroom homes $173, followed by 5-bedrooms and 3 bedrooms at $166 and $142 respectively.
Occupancy Rate
Chalet data reveals an occupancy rate of 57.46% for Airbnb rentals in Memphis. This high demand ensures a consistent stream of income for property owners and investors.
How Profitable is Airbnb in Memphis ?
AS of July 2025, the average gross yield, which represents the annual income generated by a property as a percentage of its value, is 23.86% in Memphis. This figure suggests that short-term rentals in the city offer a favorable return on investment. Memphis is ranked #5 by return on investment on Airbnb rentals in the United States.
Annual Revenue
According to Chalet, short-term rentals in Memphis earn an average of $24,001 annually, highlighting the strong investment potential in the city’s market. You can evaluate your properties using our free Airbnb calculator.
Hosts
The market is not dominated by property management firms. The largest host is Andrew with 4.93% of the total inventory and an average review of 4.77⭐️s .
Property Tax
According to SmartAsset, the average property tax in Memphis is 1.25%. This relatively moderate tax rate is an important consideration for those looking to invest in short-term rental properties.
Guests
The majority of the guests in Memphis come from Tennessee and are within driving distance. 5.0% of all guests are from Nashville followed by Nashville with 3.0%.
Regulations
Memphis short-term rental regulations are somewhat investor-friendly, with different zoning regulations and limitations in place. Understanding these regulations is crucial for potential investors to ensure compliance and a smooth operation.
Top Places for Airbnb in Memphis
Memphis top submarkets for Airbnb investments include areas like ZIP code 38126, which has the highest gross yield at 43% and an annual revenue of $32,439. In contrast, ZIP code 38114 offers more extensive opportunities with 90 full-time listings, but a lower gross yield of 27%.
Home values also vary significantly, with properties ranging from $95.3K in 38109 to $60.3K in 38106, making each submarket unique in terms of investment potential and entry cost.
