Rent It, Airbnb It or Sell It? A Knoxville Owner's Math

A lot of owners weighing a sale ask the same thing: should I keep it and rent it instead? I own rentals and manage short-term rentals, so here's how I run that decision. The short answer: look at what's left after every real cost, including the mortgage. Gross rent tells you almost nothing.

For a long-term rental, I look at:

• Monthly rent
• Property taxes
• Insurance
• Repairs and maintenance
• Vacancy
• Property management
• Capital expenditures: the roof, HVAC and water heater you'll eventually replace
• The mortgage, if there is one
• Expected appreciation

Here's an illustrative 3-bedroom in Knoxville bought at $250,000:

Rent	$1,900 a month
Taxes	about $250
Insurance	about $150
Maintenance	about $100
Management	about $150
Vacancy reserve	about $95
Left over before any mortgage or capital reserves	about $1,155 a month

That looks healthy. Now add a mortgage. Financed at 80% of the purchase price at an example 7% interest rate over 30 years, principal and interest come to about $1,331 a month. That turns the same house into a small monthly loss before you set aside anything for a new roof or HVAC.

That's why I never judge a rental on gross rent. The same house can be a good rental for someone who owns it outright and a bad one for someone carrying a new mortgage. If you already own the house with little or no debt, keeping it can make sense. If you'd be refinancing or buying in at today's prices, run every line first.

A short-term rental isn't a regular rental with a higher nightly rate. You're running a hospitality operation. On top of everything above, you're dealing with:

• Furnishing the whole house
• Cleaning between every stay
• Supplies, utilities and platform fees
• Guests checking in and out
• Late-night messages and lockouts
• Noise complaints and damaged items
• Reviews and cancellations
• Slow seasons

If you manage it yourself, you've created another job. If you hire it out, management takes a significant share of the revenue.

The other thing owners underestimate is occupancy. A short-term rental isn't booked every night. Over the 12 months ending July 2026, Knoxville short-term rentals averaged about 42% occupancy and about $26,900 in annual revenue per listing, according to AirROI, with October the strongest month and January the weakest. Plan around realistic occupancy, not a full calendar.

The City of Knoxville requires a permit for any rental of less than 30 days. The city treats owner-occupied and non-owner-occupied short-term rentals differently, with stricter rules for non-owner-occupied rentals in residential areas. Operators also have to collect sales tax and hotel occupancy tax.

If the house is in unincorporated Knox County or another city, the rules are different. Check with the city or county where the house sits before you count on short-term income.

If the numbers only work on gross rent, if you don't want a second job, or if the house would need real money to become rentable, selling is often the cleaner answer. If you own it free and clear, the rent covers every cost with room to spare, and you're comfortable being a landlord, keeping it can be the better long-term play.

If you're leaning toward selling, start with what it actually costs to sell in Tennessee, compare a listing against a cash offer, and run your numbers in the cash offer calculator. Selling a rental with tenants in place? Our Knoxville page covers your options.