Learn Farsi: من در تهران هستم.

In this sentence, dar means "in" as a location. It is the most common preposition for showing where something is. You can use it just like the English "in" or "at" for cities (dar tehrân), countries, or enclosed places like a house or room.

Why is the verb hastam at the very end of the sentence instead of right after man (I)?

Farsi normally follows a Subject-Object-Verb word order. This means the main verb almost always goes at the very end of the sentence. So instead of the English order "I am in Tehran," the Farsi structure is literally "I in Tehran am."

Since hastam already means "I am", do I actually need to include man (I) at the beginning?

No, you don't have to! The -am ending on the verb hastam already makes it perfectly clear that "I" am the subject. In everyday Farsi, it is very common to drop the man and simply say dar tehrân hastam. Keeping man just adds a bit of emphasis.

I have heard native speakers say something shorter, like "tehrânam". Is this sentence considered formal?

Yes, this sentence is the full, grammatically complete way to say it, which is perfect for writing or clear speech. In casual spoken Farsi, people often skip the preposition dar entirely and attach a short version of the verb directly to the noun, saying tehrânam (I am [in] Tehran).