A few years ago, we bought a duplex in Memphis and turned it into a short-term rental. We put more than $325,000 into the purchase, renovation, and furnishing of both units. At its best, the front unit alone brought in $3,500 a month.
We just sold it.
If you own a short-term rental in Memphis and you've noticed your numbers slipping, this post is for you. Here's what actually happened, and why we think a lot of Airbnb owners are quietly heading for the exit right now.
The Short-Term Rental Math Doesn't Work Like It Used To
For a long time, furnished rentals were one of the best-performing assets in real estate. Buy a property, renovate it, furnish it, list it, and let the bookings roll in. The math worked because demand outpaced supply and travelers were willing to pay a premium for a home-like stay.
That equation has flipped.
Here's what changed:
- The short-term rental market has softened. More listings are competing for fewer bookings in most mid-size markets, Memphis included.
- Property values have pulled back since 2022. Homes that were appreciating fast a few years ago aren't climbing the same way now.
- Travel spending has cooled. Guests are more price-sensitive, and fewer of them are willing to pay extra for a furnished unit over a standard hotel or a cheaper stay.
- Insurance costs have climbed. Short-term rental coverage is more expensive than it was even two years ago.
- Property taxes have gone up. In many counties, including Shelby County, reassessments have pushed carrying costs higher.
- The platforms are more crowded than ever. Airbnb and VRBO both have far more competing listings than they did five years back, which drives down occupancy and nightly rates for everyone.
Put those together, and what used to be close to passive income now takes constant attention. Dynamic pricing, guest turnover, cleaning schedules, maintenance calls, marketing spend to stay visible on the platforms — it's a part-time job, not a side hustle.
We Ran the Numbers, and Selling Made More Sense
We didn't sell because the property failed. We sold because the returns no longer justified the work. Between rising taxes, higher insurance premiums, and softer demand, the margin between "profitable" and "barely breaking even" got a lot thinner.
We're not alone. Talk to enough operators in Memphis and you'll hear the same story: rentals that used to run themselves now need a property manager, a marketing budget, and someone checking the calendar every day just to stay in the black.
A lot of owners are making the same call we did. They're taking the equity while it's still there and moving on before the numbers get worse.
Short-Term Rentals and What Neighborhoods Actually Need
There's another side to this that doesn't show up on a spreadsheet.
Short-term rentals bring rotating guests, not neighbors. Long-term residents mow their lawns, join the block parties, look out for each other's kids, and stick around long enough to care about the street they live on. A revolving door of weekend guests doesn't build that kind of community, no matter how nice the furniture is.
For us, the financial case and the community case pointed the same direction: it was time to sell.
What We're Doing With That Capital Instead
We're putting that money back into what we do best: buying homes, renovating them, and selling them to families who want to put down roots. Not another rental. A real home for a real family.
That's the whole business model at Spencer Buys Houses. We buy properties in Memphis and the surrounding area, fix them up, and get them into the hands of people who are ready to stay.
Thinking About Selling Your Short-Term Rental?
If you're sitting on a short-term rental that isn't performing the way it used to, you're not imagining it. The market has changed, and a lot of the owners who saw strong returns three or four years ago are seeing something very different today.
You don't have to wait for the numbers to get worse before you decide what to do next. We buy properties as-is, including furnished short-term rentals, and we can close on your timeline.
Call us at (901) 979-9848. We know exactly where you're at, because we were there too.
Frequently Asked Questions
Is the short-term rental market in Memphis actually declining?
Occupancy and nightly rates have softened in many mid-size markets, including Memphis, as more listings compete for a similar pool of travelers. Rising insurance and property tax costs have also cut into net returns for owners.
Should I sell my Airbnb or keep trying to make it work?
It depends on your numbers. If your carrying costs (insurance, taxes, management, maintenance) have grown faster than your booking revenue, it may be worth comparing what you'd net from selling versus what you're actually clearing each month after expenses.
Can I sell a furnished short-term rental as-is?
Yes. You don't need to strip the furniture or make repairs before selling. Cash buyers, including Spencer Buys Houses, typically purchase properties in their current condition, furniture and all.
How fast can I sell my short-term rental property?
Cash sales can often close in a matter of days to a few weeks, compared to months on the traditional market, since there's no financing contingency or buyer mortgage approval to wait on.
Does selling a short-term rental hurt the neighborhood less than keeping it as a rental?
Selling to a buyer who intends to live in the home, or to a company that renovates and resells to owner-occupants, generally supports more long-term residency in a neighborhood than continuing short-term rental use.