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Franklin Short Term Rental Regulation: A Guide For Airbnb Hosts

Franklin, Tennessee

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What are short term rental (Airbnb, VRBO) regulations in Franklin, Tennessee?

In Franklin, Tennessee, the regulations surrounding short-term rentals, such as those listed on Airbnb and VRBO, are designed to maintain a balance between the benefits of tourism and the concerns of local residents. One key aspect of these regulations is the requirement that short-term rentals must be owner-occupied properties, meaning the homeowner must reside at the property being rented out. This restriction aims to preserve the residential character of neighborhoods and prevent non-owner occupied properties from being used solely for short-term rental purposes.

To operate a short-term rental business in Franklin, property owners must adhere to specific licensing requirements. While Tennessee does not mandate state-level licensing for Airbnb properties, Franklin necessitates property owners to obtain a city business tax registration for each rental property. Additionally, there is a minimum threshold of $10,000 in taxable gross receipts to register and file business taxes, with vacation rental owners falling under Business Tax Classification 3.

A nominal $15 business license registration fee is also required for each new property.In terms of taxes, Tennessee's short-term rental laws mandate the collection of sales tax and hotel occupancy tax. Platforms like Airbnb typically handle the collection and remittance of these taxes, while property management companies may take on this responsibility for property owners.

These tax regulations ensure that short-term rental operators comply with state tax requirements and contribute to the local economy.Franklin's city-wide rules further regulate short-term rentals by limiting the number of days an owner-occupied dwelling can be rented out per year to a maximum of 113 days.

This restriction aims to safeguard neighborhood integrity and prioritize housing availability for residents over short-term rental accommodations.

While Franklin enforces its regulations strictly, particularly with the ban on non-owner occupied short-term rentals in residential areas, the city has allowed existing STRs to continue operating under certain conditions. This approach indicates a balance between supporting owner-occupied short-term rentals and addressing concerns about non-owner occupied properties impacting residential neighborhoods negatively.

Overall, Franklin's regulations create a framework that supports the operation of owner-occupied short-term rentals while maintaining the city's residential character and addressing the needs of both residents and visitors. By striking this balance, Franklin aims to foster a harmonious coexistence between short-term rental businesses and the local community.

Starting a Short Term Rental Business in Franklin

Starting a short-term rental business in Franklin, Tennessee requires careful planning and adherence to the city's regulations. The first step is determining the right pricing for your rental property. Consider all of your expenses, including mortgage or rent payments, insurance, licenses, repairs, cleaning costs, and applicable taxes. Price your rental competitively while ensuring you can cover your costs and turn a profit.

Once you have established your pricing, it's time to list your property on popular platforms like Airbnb and VRBO. These platforms handle reservations, marketing, tax collection, and other administrative tasks, making it easier to manage your rental. However, you can also create your own property website for more control and to avoid third-party fees. Don't forget to promote your rental on social media to engage with potential guests and share updates about your property.

Automating rental tasks is another important aspect of running a successful short-term rental business. Take advantage of online reservations, reviews, contactless check-in, tax remittance, and payment processing to streamline your operations and reduce the time spent on administrative tasks.

Before you start accepting guests, it's crucial to write a comprehensive business plan. Your plan should include an executive summary, a detailed company description, management structure, market analysis, financing information, and a marketing strategy. This document will serve as a roadmap for your business and help you secure financing if needed.

Forming a business entity, such as an LLC or corporation, is another important step in protecting your personal assets and gaining tax benefits. Additionally, obtaining general business insurance can provide an extra layer of protection for your rental business.

Finally, it's essential to comply with Franklin's short-term rental regulations. Remember that only owner-occupied short-term rentals are allowed in residential areas. You must obtain a city business tax registration and meet the $10,000 taxable receipts threshold. Additionally, you'll need to pay the $15 business license registration fee for each property and limit your rentals to a maximum of 113 days per year.

By following these steps and adhering to Franklin's owner-occupancy requirement, you can successfully launch your short-term rental business while operating legally and protecting your interests. The city's regulations aim to balance tourism with resident concerns over issues like noise and parking, so it's crucial to understand and comply with these rules.

Short Term Rental Licensing Requirement in Franklin

In Franklin, Tennessee, the licensing requirements for short-term rentals are a crucial aspect of operating a legal and compliant vacation rental business. Property owners looking to rent out their properties for short stays, typically less than 30 days, must obtain a permit from the city of Franklin. This permit serves as official authorization to operate a short-term vacation rental within the city limits.

Compliance with specific rules and regulations is essential for property owners in Franklin. These regulations may include restrictions on the number of guests allowed, requirements for adequate parking spaces for guests, noise ordinances, and other guidelines aimed at maintaining the quality of life in residential neighborhoods where short-term rentals are located. By following these regulations, property owners can ensure that their short-term rental properties contribute positively to the community and do not disrupt the peace and tranquility of the area.

Failure to comply with the licensing requirements and regulations set forth by the city of Franklin can result in fines, penalties, and potential legal action. It is imperative for property owners to familiarize themselves with the licensing process, understand the rules governing short-term rentals, and take proactive steps to meet all requirements to avoid any legal consequences.

By obtaining the necessary permit, adhering to regulations on guest limits and parking, and maintaining a commitment to ethical and responsible property management practices, property owners can operate their short-term rentals in Franklin successfully while upholding the standards set by the city and ensuring a positive experience for both guests and the local community.

Franklin Short Term Rental Taxes

As a short-term rental property owner in Franklin, Tennessee, it is crucial to understand and comply with the various tax requirements associated with operating a vacation rental business in the city.

The state of Tennessee imposes a 6% sales tax and a 1% transient tax on short-term rental stays. These taxes are typically collected and remitted by the online rental platforms, such as Airbnb and VRBO, on behalf of the property owner. This streamlines the tax collection process and ensures the state taxes are paid correctly.

However, the city of Franklin also levies its own set of taxes that the property owner is responsible for collecting and remitting directly. These local taxes include:

4% City of Frankfort Transient Room Tax

2% Fine Arts Tax

The Transient Room Tax is a tax imposed by the city on the rental of any room or accommodation for a period of less than 30 consecutive days. This tax must be collected from guests and paid to the city on a quarterly basis.The Fine Arts Tax is an additional 2% tax that is also levied on short-term rental stays. This tax is paid to the Franklin County Treasurer on a quarterly basis.

It is crucial for short-term rental property owners in Franklin to be diligent in collecting these local taxes from their guests and remitting them to the appropriate authorities in a timely manner. Failure to do so can result in penalties, interest charges, and potential legal consequences.

To ensure compliance, property owners should familiarize themselves with the tax filing deadlines and procedures, and potentially seek the guidance of a tax professional or accountant who is well-versed in the specific tax requirements for short-term rentals in Franklin, Tennessee.

By staying up-to-date and compliant with all state and local tax obligations, short-term rental property owners in Franklin can avoid potential issues and maintain a successful and legally compliant vacation rental business.

Franklin-wide Short Term Rental Rules

The Franklin-wide short-term rental rules in Franklin, Tennessee aim to strike a balance between accommodating tourism growth and addressing residents' concerns. These regulations, as outlined in the sources, include the following key points:

  • Owner-Occupancy Requirement: New short-term vacation rentals in residential areas in Franklin must be owner-occupied. This means that the homeowner must live at their short-term rental property.
  • Limit on Number of Rentals: The new rules specify that only one short-term rental is allowed per lot in Franklin.
  • Grandfathering Provision: Existing short-term vacation rentals that were legally established and issued a permit before the effective date of the ordinance are grandfathered in. These properties are subject to the laws in place at the time they were being used as short-term rentals until certain conditions are met.
  • Occupancy Limits and Safety Regulations: Short-term rental operators are required to adhere to safety regulations, including limits on occupancy, parking provisions, noise standards, and safety measures like the installation of smoke detectors and fire extinguishers.
  • Compliance Inspections: Property owners must provide proof of septic system approval, insurance, and undergo compliance inspections to ensure adherence to the regulations. Compliance certificates are issued for approved properties, which are valid for 12 months and must be renewed thereafter.
  • Registration and Fees: Operators of short-term rentals are required to register with the county and pay an annual fee. Additionally, property owners must register with the Commissioner of the Revenue for local taxation.
  • Maximum Rental Days: The proposed zoning changes in Franklin include setting a maximum of 113 days that an owner-occupied dwelling can be available as a short-term rental. This limitation aims to protect neighborhood integrity and prioritize housing for citizens.

These rules and regulations governing short-term rentals in Franklin are designed to ensure the responsible operation of vacation rental properties while addressing the needs of both residents and visitors. By complying with these guidelines, property owners can contribute positively to the community and maintain a harmonious balance between tourism and residential concerns in Franklin, Tennessee.

Does Franklin strictly enforce STR rules? Is Franklin Airbnb friendly?

In Franklin, Tennessee, the enforcement of short-term rental (STR) rules appears to be stringent, particularly concerning the prohibition of non-owner occupied STRs in residential areas. The city's decision to ban non-owner occupied rentals demonstrates a commitment to preserving the residential character of neighborhoods and addressing concerns related to noise, parking, and community integrity. Violations of these regulations can result in fines and legal consequences, indicating a serious approach to enforcing the rules governing short-term rentals in Franklin.

While the city has taken a firm stance against non-owner occupied STRs, it has allowed existing properties that were already operating before the regulations were implemented to continue under certain conditions. This approach acknowledges the presence of established rental properties while setting clear boundaries for future operations. The grandfathering of existing STRs reflects a balance between regulatory enforcement and practical considerations for property owners who were operating within the previous guidelines.

In terms of Airbnb friendliness, Franklin can be considered moderately accommodating for owner-occupied rentals. The city's regulations prioritize owner-occupied properties, allowing residents to engage in short-term rental activities while maintaining a level of control over the impact on their neighborhoods. This approach may be seen as favorable for individuals looking to supplement their income through short-term rentals while residing on the property.

However, for investors seeking to purchase non-owner occupied properties for the sole purpose of short-term rentals in residential areas, Franklin's regulations may present challenges. The restrictions on non-owner occupied rentals limit the opportunities for investors looking to capitalize on the short-term rental market in the city. This aspect of the regulations may be perceived as less Airbnb-friendly for investors compared to cities with more lenient regulations on non-owner occupied rentals.

Overall, Franklin's approach to STR regulations reflects a balance between supporting owner-occupied rentals, addressing community concerns, and regulating the short-term rental market. By strictly enforcing rules that prioritize owner-occupancy and neighborhood integrity, Franklin aims to create a harmonious environment for residents, visitors, and property owners within the city.

How to Start a Short Term Rental Business in Franklin

Starting a short-term rental business in Franklin, Tennessee requires careful planning and adherence to the city's regulations. The first step is determining the right pricing for your rental property. Consider all of your expenses, including mortgage or rent payments, insurance, licenses, repairs, cleaning costs, and applicable taxes. Price your rental competitively while ensuring you can cover your costs and turn a profit.

Once you have established your pricing, it's time to list your property on popular platforms like Airbnb and VRBO. These platforms handle reservations, marketing, tax collection, and other administrative tasks, making it easier to manage your rental. However, you can also create your own property website for more control and to avoid third-party fees. Don't forget to promote your rental on social media to engage with potential guests and share updates about your property.

Automating rental tasks is another important aspect of running a successful short-term rental business. Take advantage of online reservations, reviews, contactless check-in, tax remittance, and payment processing to streamline your operations and reduce the time spent on administrative tasks.

Before you start accepting guests, it's crucial to write a comprehensive business plan. Your plan should include an executive summary, a detailed company description, management structure, market analysis, financing information, and a marketing strategy. This document will serve as a roadmap for your business and help you secure financing if needed.

Forming a business entity, such as an LLC or corporation, is another important step in protecting your personal assets and gaining tax benefits. Additionally, obtaining general business insurance can provide an extra layer of protection for your rental business.

Finally, it's essential to comply with Franklin's short-term rental regulations. Remember that only owner-occupied short-term rentals are allowed in residential areas. You must obtain a city business tax registration and meet the $10,000 taxable receipts threshold. Additionally, you'll need to pay the $15 business license registration fee for each property and limit your rentals to a maximum of 113 days per year.

By following these steps and adhering to Franklin's owner-occupancy requirement, you can successfully launch your short-term rental business while operating legally and protecting your interests. The city's regulations aim to balance tourism with resident concerns over issues like noise and parking, so it's crucial to understand and comply with these rules.

Who to contact in Franklin about Short Term Rental Regulations and Zoning?

For questions about short-term rental regulations and zoning in Franklin, Tennessee, contact the Franklin Planning Department:

Franklin Planning Department
109 3rd Ave S, Franklin, TN 37064
Phone: (615) 791-3217
Email: planning@franklintn.gov

The Planning Department oversees short-term rental regulations in the city and can provide information on the specific rules and requirements for operating a vacation rental in Franklin. They can clarify zoning restrictions, licensing procedures, taxes, and other important aspects of running a short-term rental business in the city.

Reaching out to the Planning Department is the best way to get official guidance on navigating Franklin's short-term rental laws and ensuring your property is in compliance with local regulations. They can point you to the relevant ordinances, forms, and resources needed to operate a legal and responsible vacation rental in Franklin.

What do Airbnb hosts in Franklin on Reddit and Bigger Pockets think about local regulations?

Airbnb hosts in Franklin, Tennessee, as discussed on Reddit and Bigger Pockets, have varying opinions about the local regulations governing short-term rentals in the city. Some hosts express concerns about the restrictions placed on short-term vacation rentals, particularly the requirement for properties to be owner-occupied in residential areas. This regulation limits the ability of hosts to operate non-owner occupied rentals and may impact their rental income potential.

On one hand, there are hosts who believe that the regulations, such as limiting the number of guests and the frequency of rentals, are necessary to address residents' concerns and maintain the integrity of neighborhoods. They acknowledge the importance of balancing tourism growth with the quality of life for residents in Franklin.

Conversely, some hosts express frustration with the restrictions, feeling that they limit their ability to maximize their rental income and cater to the demand for short-term rentals in the area. Concerns are raised about the impact of these regulations on the tourism industry and the overall experience for guests visiting Franklin.

Overall, the discussions on Reddit and Bigger Pockets reflect a mix of perspectives among Airbnb hosts in Franklin regarding the local regulations. While some hosts appreciate the efforts to regulate short-term rentals for the benefit of the community, others express challenges and uncertainties about how the regulations may affect their business operations and profitability in the city.

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.

⚡️
Reveal your property’s rental profitability

Buy this property and list it on Airbnb.