Is Algood, Tennessee Good for Airbnb Investment?

To start an Airbnb in Algood, Tennessee, begin by researching local zoning laws and regulations through the Putnam County Planning Department and Algood City Hall, as short-term rentals may require special permits or fall under specific zoning classifications. Contact the Tennessee Department of Revenue to obtain a business license and register for state sales tax collection, as Tennessee requires hosts to collect and remit occupancy taxes. Find a suitable property by working with local real estate agents familiar with Algood's residential areas, focusing on properties near Burgess Falls State Park or Center Hill Lake which attract tourists, and ensure the property meets safety requirements including smoke detectors, carbon monoxide detectors, and fire extinguishers as mandated by Tennessee fire codes. Furnish the property with quality furniture, linens, and amenities that appeal to visitors exploring the Cumberland Plateau region, including outdoor gear storage and lake-related equipment if near water attractions. Create your Airbnb listing with professional photos highlighting proximity to local attractions like Edgar Evins State Park and Cookeville, set competitive pricing based on similar properties in the Cookeville-Algood area (typically ranging $75-150 per night), and write descriptions emphasizing outdoor recreation opportunities. Manage your property by establishing relationships with local cleaning services, maintenance contractors, and consider using property management companies in nearby Cookeville if you live far away, while maintaining responsive communication with guests and monitoring reviews to ensure consistent quality service in this growing Tennessee tourism market.

To identify profitable short-term rental properties in Algood, Tennessee, focus on locations within 10-15 minutes of Cookeville and Tennessee Tech University, as well as properties near Center Hill Lake and Edgar Evins State Park which attract seasonal tourists and outdoor enthusiasts. Target 2-4 bedroom homes or cabins with amenities like hot tubs, fire pits, lake views, or proximity to boat ramps, as these command premium rates of $150-300 per night compared to basic properties at $80-150. Analyze pricing using AirDNA and Mashvisor to track seasonal demand patterns, with peak rates during summer lake season (May-September) and Tennessee Tech events, while researching competition through Airbnb and VRBO searches within 5-mile radius to identify gaps in amenities or pricing. Utilize STR-specific tools like Rabbu and AllTheRooms for Algood market data, monitor Putnam County regulations for compliance requirements, and leverage local Facebook groups and Cookeville area real estate agents familiar with investment properties to identify emerging neighborhoods near recreational areas where you can acquire properties under $200,000 that generate 15-25% annual returns through strategic positioning between the university market and lake tourism demand.

To obtain an Airbnb/STR permit in Algood, Tennessee, contact the Algood City Hall at 931-537-9646 or visit their offices at 178 West Main Street to inquire about short-term rental regulations and application procedures. You will likely need to submit a completed STR permit application, proof of property ownership or lease agreement, certificate of occupancy, general liability insurance policy (typically $1 million minimum), Tennessee state sales tax license, fire safety inspection certificate, and floor plan showing maximum occupancy limits. Required fees typically range from $100-300 for the initial permit plus annual renewal fees of $50-150. The application process generally takes 30-60 days for review and approval, including time for required inspections. Algood-specific requirements may include parking provisions for guests, noise ordinances compliance, 24-hour local contact person designation, occupancy limits based on bedrooms and square footage, and adherence to residential zoning restrictions. Contact the city's planning and zoning department to confirm current regulations as STR ordinances are frequently updated, and ensure you also obtain any required county permits from Putnam County if applicable.

Short-term rentals (STRs) are generally legal in Algood, Tennessee, as the city has not implemented specific prohibitive ordinances against vacation rentals as of 2024. However, STR operators must comply with Tennessee state requirements including obtaining proper business licenses, collecting and remitting state and local occupancy taxes, and adhering to safety regulations. Algood follows Putnam County's zoning regulations in most areas, which typically allow STRs in residential zones with some restrictions on occupancy limits and parking requirements. The city requires STR operators to register their properties and maintain compliance with fire safety codes and building standards. Recent trends in Tennessee have seen increased regulation at the municipal level, with some cities implementing registration requirements and operational standards, though Algood has maintained a relatively permissive approach while ensuring basic safety and tax compliance. Property owners should verify current zoning compliance and obtain necessary permits before operating STRs, as regulations can change and enforcement has become more stringent statewide since 2022.

The best areas for Airbnb investment in Algood, Tennessee are primarily concentrated around the Cookeville Lake and Center Hill Lake regions, particularly the waterfront properties along the Calfkiller River corridor and the neighborhoods near Standing Stone State Park. These areas attract significant tourism due to excellent fishing, boating, and water recreation opportunities, with peak seasons during summer months and fishing tournaments throughout the year. The downtown Algood area near Highway 111 offers potential for business travelers visiting local manufacturing facilities and those attending events at Tennessee Tech University in nearby Cookeville. Properties within a 5-mile radius of Standing Stone State Park perform exceptionally well due to hiking enthusiasts, camping overflow, and family reunions, while lakefront or lake-view properties command premium rates year-round. The rural residential areas along Old Kentucky Road and Dry Valley Road provide attractive options for guests seeking peaceful retreats and hunting access, particularly during deer and turkey seasons from October through January.

Airbnb properties in Algood, Tennessee are subject to Tennessee state sales tax of 7% and state lodging tax of 3%, totaling 10% in state-level taxes on short-term rental stays. Putnam County imposes an additional local occupancy tax of 5%, bringing the combined tax rate to approximately 15% on gross rental receipts. These taxes are typically collected by Airbnb directly from guests at the time of booking through their automated tax collection system, which began operating in Tennessee around 2019. Airbnb remits the collected taxes monthly to the Tennessee Department of Revenue and applicable local tax authorities on behalf of hosts. However, individual hosts remain responsible for registering with state and local tax authorities, obtaining necessary permits, and ensuring compliance with local regulations. Stays of 30 days or longer are generally exempt from occupancy taxes as they are considered long-term rentals rather than transient accommodations. Properties used exclusively for personal use without rental income are also exempt, and some jurisdictions may provide exemptions for certain types of travelers such as government employees or those receiving medical treatment, though specific exemptions vary by local ordinance.

To start an Airbnb in Algood, Tennessee, expect total costs around $180,000-220,000. Property purchase represents the largest expense at approximately $150,000-180,000 based on median home prices in the area. Furnishing costs typically range $8,000-12,000 for a complete 2-3 bedroom setup including furniture, bedding, kitchenware, and décor. Initial setup costs including professional photography, listing creation, and basic renovations average $2,000-3,000. Permits and fees vary but budget $500-1,000 for business licenses, short-term rental permits, and registration requirements. Insurance costs approximately $1,200-1,800 annually for short-term rental coverage. Utilities including electricity, water, internet, and cable average $200-300 monthly or $1,200-1,800 for six months. First six months operating costs including cleaning services ($100-150 per turnover), supplies, maintenance, property management software, and marketing total approximately $3,000-5,000. Additional considerations include potential HOA fees, property taxes, and a reserve fund for unexpected repairs, adding another $2,000-4,000 to initial costs.

Airbnb properties in Algood, Tennessee typically generate annual revenues between $15,000-$35,000 for well-positioned properties, with average daily rates ranging from $75-$120 depending on property size and amenities. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($25-40 per turnover), property management (15-25% if outsourced), utilities ($150-250 monthly), insurance ($800-1,200 annually), and maintenance costs averaging $2,000-4,000 yearly. Properties near Center Hill Lake or Cookeville's Tennessee Tech University command premium rates, with lakefront cabins achieving occupancy rates of 65-75% and profit margins of 25-35%. A typical 3-bedroom lake house generating $28,000 annually might net $8,000-10,000 after expenses, representing a 12-15% return on investment for properties valued at $180,000-220,000. Success factors include proximity to outdoor recreation areas like Edgar Evins State Park, professional photography showcasing lake or mountain views, consistent 4.8+ star ratings, and strategic pricing during peak seasons like summer lake activities and fall foliage periods. Properties lacking water access or requiring significant upfront renovations often struggle with occupancy rates below 45% and profit margins under 15%, making location and property condition critical determinants of profitability in this rural Tennessee market.

Airbnb investments in Algood, Tennessee typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14%, primarily driven by the area's proximity to Cookeville and Tennessee Tech University which creates steady demand from visiting families, business travelers, and weekend tourists exploring the Upper Cumberland region. Properties in Algood generally achieve profitability within 18-24 months, with average daily rates of $85-120 depending on property size and amenities, while maintaining occupancy rates of 65-75% annually due to consistent demand from the nearby university community and regional business activity. The market benefits from lower property acquisition costs compared to Nashville or Knoxville, with typical investment properties ranging from $150,000-250,000, allowing investors to achieve positive cash flow within the first year while building equity in a stable rural Tennessee market that has shown consistent 3-5% annual appreciation since 2020.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Algood, Tennessee. Local real estate agents specializing in investment properties include Cookeville-based Century 21 Cumberland Realty and RE/MAX Real Estate Professionals, both serving the Upper Cumberland region including Algood since the early 2000s. Keller Williams Realty has expanded their investor services to the area around 2018, while Coldwell Banker McMahan Co. has been facilitating investment property transactions in the region since 1995. National services like BiggerPockets (founded 2004) and Roofstock (established 2015) offer online platforms connecting investors with Tennessee properties, while AirDNA provides market analytics specifically for short-term rental investments in smaller Tennessee markets like Algood. Local property management companies such as Tennessee Mountain Rentals and Cumberland Cove Property Management have emerged since 2016 to handle Airbnb operations for investors, and national firms like RedAwning and Vacasa have extended their short-term rental management services to cover the Cookeville-Algood area as vacation rental demand increased around Center Hill Lake.