Is Benton, Kentucky Good for Airbnb Investment?

To start an Airbnb in Benton, Kentucky, begin by researching local regulations through Marshall County and the City of Benton offices, as Kentucky generally allows short-term rentals but local municipalities may have specific zoning requirements or permit needs. Contact Benton City Hall at (270) 527-3128 to inquire about business licenses, occupancy permits, and any short-term rental ordinances that may require registration or safety inspections. Find a suitable property by searching real estate listings in residential areas near Kentucky Lake, as Benton's proximity to the lake makes it attractive to tourists, with average property prices ranging from $80,000-$200,000 depending on location and size. Obtain necessary permits including a business license from Marshall County Clerk's office, ensure the property meets Kentucky fire safety codes, and consider getting a sales tax permit from the Kentucky Department of Revenue since short-term rentals are subject to state transient room tax. Furnish the property with essential amenities including Wi-Fi, kitchen appliances, linens, and outdoor furniture if near the lake, budgeting approximately $5,000-$15,000 for initial furnishing. Create your listing on Airbnb, Vrbo, and Booking.com with professional photos highlighting lake access or proximity to Land Between the Lakes National Recreation Area, setting competitive rates around $75-$150 per night based on local market analysis. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating key exchanges or installing smart locks, and maintaining compliance with Kentucky's 6% transient room tax collection and remittance requirements while keeping detailed records for tax purposes.

To identify profitable short-term rental properties in Benton, Kentucky, focus on locations within 10-15 minutes of Kentucky Lake and Lake Barkley, as these water recreation areas drive significant tourism demand, particularly during spring through fall seasons. Target 3-4 bedroom properties with 2+ bathrooms, waterfront or water-view access, boat parking/docks, outdoor spaces like decks or fire pits, and modern amenities including WiFi, full kitchens, and laundry facilities, as families and fishing groups comprise the primary market segment. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against comparable properties, aiming for average daily rates of $150-250 depending on proximity to water and amenities, with occupancy rates typically ranging 60-75% during peak season (April-October) and 30-45% off-season. Research competition by analyzing existing STR listings within a 5-mile radius on Airbnb and VRBO, noting their pricing, amenities, and guest reviews to identify market gaps and positioning opportunities. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through Kentucky Regional MLS, while connecting with Benton-area real estate agents familiar with investment properties and consulting Marshall County tourism data to understand seasonal demand patterns and upcoming developments that could impact the rental market.

To obtain an Airbnb/STR permit in Benton, Kentucky, you must first contact the Benton City Clerk's office at City Hall located at 1306 Main Street to inquire about short-term rental regulations and obtain application forms, as Marshall County and Benton may have specific ordinances governing STRs. Required documents typically include a completed business license application, property deed or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental unit, contact information for a local property manager if you're not local, and proof of compliance with fire safety codes. You'll need to pay an estimated business license fee of $50-100 annually, plus potential zoning compliance fees of $25-75, and the application processing timeline is generally 2-4 weeks depending on inspection requirements. Benton-specific requirements likely include maintaining the property according to residential building codes, providing adequate parking for guests, ensuring proper waste disposal arrangements, displaying the permit number in rental listings, and potentially limiting the number of overnight guests based on bedroom count and septic system capacity, while also requiring annual renewal and possible periodic inspections by city officials.

Short-term rentals (STRs) in Benton, Kentucky are generally legal but operate under state regulations and local oversight. Kentucky does not have a statewide ban on STRs, and Benton, as a small city in Marshall County, has not implemented comprehensive restrictions prohibiting short-term rentals. However, operators must comply with state tax requirements including collecting and remitting transient room taxes, and properties must meet basic safety and zoning requirements. The city may require business licenses for STR operations and properties must comply with residential zoning ordinances, though enforcement varies. There have been no major recent legal changes specifically targeting STRs in Benton, but operators should verify current local ordinances with the city clerk as small municipalities sometimes update regulations without widespread notice. Properties in historic districts or areas with homeowners associations may face additional restrictions, and all STRs must comply with Kentucky's fire safety codes and building standards regardless of local regulations.

The best areas for Airbnb investment in Benton, Kentucky include the downtown historic district near the courthouse square, which attracts visitors interested in small-town charm and local events like the Tater Day Festival held annually since 1843, and properties near Kentucky Lake and Lake Barkley, particularly around the Benton Marina area, which draw fishing enthusiasts, boaters, and families seeking waterfront recreation year-round. The area near US Highway 62 and Highway 408 intersection offers good accessibility for business travelers visiting local manufacturing facilities like Kenlake Foods or government workers conducting business at the Marshall County courthouse. Properties within walking distance of Benton City Park and the Marshall County Community Center can capitalize on sports tournaments, family reunions, and community events, while homes near the historic Benton Train Depot area appeal to history buffs and those exploring the region's railroad heritage, with additional demand from visitors to nearby attractions like Kentucky Dam Village State Resort Park and Land Between the Lakes National Recreation Area.

Airbnb properties in Benton, Kentucky are subject to Kentucky's 6% state sales tax on transient accommodations, which applies to rentals of less than 30 consecutive days, and this tax is typically collected by Airbnb directly from guests and remitted to the Kentucky Department of Revenue on behalf of hosts through their automated tax collection system that began around 2019. Marshall County, where Benton is located, imposes an additional 3% transient room tax on short-term rental accommodations, bringing the total occupancy tax rate to approximately 9%, and this county tax may need to be collected and remitted separately by hosts to the Marshall County Clerk's office on a monthly basis depending on local collection agreements. The city of Benton may also impose its own local occupancy tax of 1-2%, though smaller municipalities sometimes rely on county collection, and hosts should verify current local requirements with Benton city officials. Exemptions typically include rentals to permanent residents (30+ days), certain government employees on official business, and some nonprofit organization stays, while collection procedures require hosts to register with applicable tax authorities, maintain detailed records of bookings and tax collected, and file returns monthly or quarterly depending on volume, with penalties applying for late remittance.

To start an Airbnb in Benton, Kentucky, the total estimated costs would be approximately $185,000-$220,000. Property purchase costs around $150,000-$180,000 based on median home prices in Marshall County. Furnishing a 2-3 bedroom property would cost $8,000-$12,000 including furniture, appliances, linens, and décor from retailers like IKEA, Wayfair, and local stores. Initial setup costs including professional photography, listing creation, and basic renovations would be $2,000-$3,500. Permits and fees including business license, short-term rental permit, and tax registration would total $300-$800 depending on local regulations. Insurance including landlord and short-term rental coverage would cost $1,200-$2,000 annually. Utility deposits and setup fees for electricity, water, internet, and cable would be $500-$800. First six months operating costs including utilities ($600/month), cleaning supplies ($100/month), maintenance reserves ($200/month), property management software like Airbnb Plus or VRBO ($50/month), and marketing would total approximately $5,700. Additional considerations include potential HOA fees, property taxes, and emergency repair funds which could add $3,000-$5,000 to initial costs.

Airbnb properties in Benton, Kentucky, a small city near Kentucky Lake, typically generate modest returns with average daily rates ranging from $75-120 depending on proximity to the lake and property amenities. Properties within walking distance of Kentucky Lake or with lake views command premium rates of $100-150 per night, achieving 40-60% occupancy rates during peak summer months (May-September) and 20-30% during off-season. Annual gross revenues for well-positioned 2-3 bedroom properties average $15,000-25,000, while expenses including cleaning fees ($40-60 per turnover), utilities ($150-200 monthly), property management (20-25% of revenue), insurance ($1,200-1,800 annually), and maintenance typically consume 60-70% of gross income, resulting in net profit margins of 15-25%. Success factors include lake proximity, fishing amenities, boat parking, and targeting the Land Between the Lakes tourism market, with properties near Kentucky Dam Village State Resort Park performing particularly well. The seasonal nature of tourism creates cash flow challenges during winter months, but properties that cater to fishing enthusiasts and hunters can maintain year-round bookings, with some hosts reporting annual net profits of $8,000-12,000 on properties purchased for $80,000-120,000, yielding returns of 7-12% before considering property appreciation.

Airbnb investments in Benton, Kentucky typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, primarily driven by the area's proximity to Kentucky Lake and Land Between the Lakes recreational areas which attract seasonal tourists and fishing enthusiasts. Properties near the waterfront or with lake access can achieve higher returns of 12-15% annually, while standard residential properties converted to short-term rentals average 8-10% ROI. The timeframe to profitability is generally 18-24 months for most properties, with initial investment recovery occurring faster during peak summer and fall seasons when occupancy rates reach 65-75%. Cash-on-cash returns are typically strongest for properties purchased under $150,000 that can command $80-120 nightly rates, with annual gross revenues of $15,000-25,000 per property after accounting for seasonal fluctuations and the rural market's lower year-round demand compared to major metropolitan areas.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Benton, Kentucky. Local real estate agents like those at Crye-Leike Realty and Century 21 Service Realty have experience with investment properties in the Kentucky Lake area around Benton. Mashvisor and AirDNA provide market analysis tools specifically for Airbnb investors to evaluate properties in smaller markets like Benton. RedAwning and Vacasa offer property management services for short-term rentals in Kentucky, while AvantStay focuses on group rental properties that could work well near Kentucky Lake. Local agents at RE/MAX Real Estate Executives and Keller Williams have knowledge of the Benton market's seasonal rental potential. BiggerPockets connects investors with local experts familiar with Kentucky's short-term rental regulations, and Awning provides end-to-end Airbnb investment services including property identification in secondary markets like Benton. Roofstock and Arrived Homes occasionally feature short-term rental investment opportunities in Kentucky markets, while local property management companies like Kentucky Lake Vacation Rentals understand the specific dynamics of the Benton tourism market near Kentucky Dam.