Is Cave City, Kentucky Good for Airbnb Investment?

To start an Airbnb in Cave City, Kentucky, begin by researching local regulations through the Cave City Planning and Zoning Commission and Barren County offices, as Kentucky generally allows short-term rentals but local municipalities may have specific requirements including business licenses, occupancy permits, and zoning compliance. Obtain necessary permits including a Kentucky business license ($15-50), local business permit from Cave City ($25-100), and ensure your property meets fire safety and building codes which may require inspections. Find a suitable property by targeting areas near Mammoth Cave National Park since Cave City's tourism is heavily driven by cave visitors, with average property prices ranging $80,000-150,000 for suitable homes, or consider renting a property with landlord permission for short-term rental use. Furnish the space with comfortable, durable furniture focusing on 2-4 bedroom configurations that accommodate families visiting the caves, budget $5,000-15,000 for complete furnishing including linens, kitchen essentials, and cave-themed decor to appeal to tourists. List your property on Airbnb, VRBO, and Booking.com with competitive pricing around $75-125 per night depending on size and amenities, emphasizing proximity to Mammoth Cave (Cave City is the primary gateway town), and include high-quality photos showcasing the space and local attractions. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating with local cleaning services ($30-50 per turnover), and maintaining relationships with Cave City tourism businesses for guest recommendations while ensuring compliance with Kentucky's 6% sales tax and any local lodging taxes that may apply.

For identifying profitable STR properties in Cave City, Kentucky, focus on locations within 5-10 miles of Mammoth Cave National Park, the primary tourism driver, with properties offering easy highway access via I-65 and proximity to local attractions like Kentucky Down Under Adventure Zoo and Dinosaur World. Target 2-4 bedroom properties with unique features like log cabins, farmhouses, or modern amenities including hot tubs, fire pits, and spacious outdoor areas that appeal to families and groups visiting the cave systems. Pricing analysis should benchmark against similar properties in the $80-150 nightly range, considering seasonal fluctuations with peak demand during spring through fall months when cave tours are most popular. Competition research reveals a moderate STR market with opportunities for differentiation through themed accommodations or enhanced outdoor experiences, as most existing properties are basic vacation rentals. Utilize AirDNA and Mashvisor for market data specific to Barren County, monitor STR performance on Airbnb and VRBO platforms, leverage the Cave City Tourism Commission resources for visitor statistics, and analyze RevPAR data from nearby hotels like Hampton Inn and Holiday Inn Express to understand market pricing dynamics and occupancy patterns throughout the year.

To obtain an Airbnb/STR permit in Cave City, Kentucky, contact the Cave City Planning and Zoning Department at City Hall located at 502 Mammoth Cave Street, as Cave City requires short-term rental operators to obtain a conditional use permit and business license. Required documents typically include a completed application form, property deed or lease agreement, site plan showing parking and access, proof of liability insurance (minimum $1 million), contact information for a local property manager if you're non-resident, and floor plans indicating maximum occupancy. The application fee is approximately $150-250 for the conditional use permit plus $50-75 for the business license, with additional inspection fees of around $100. The timeline involves submitting your application, scheduling a property inspection within 2-3 weeks, attending a Planning Commission meeting (held monthly), and receiving approval within 30-45 days if all requirements are met. Cave City specific requirements include maintaining adequate off-street parking (minimum 2 spaces), ensuring the property meets fire safety codes, limiting occupancy to 2 people per bedroom plus 2 additional guests, providing 24/7 contact information to neighbors, and renewing permits annually. Properties must also comply with Kentucky state tax requirements and register with the Department of Revenue for transient room tax collection.

Short-term rentals (STRs) are generally legal in Cave City, Kentucky, as the city has not enacted specific prohibitive ordinances against vacation rentals as of 2024. However, STR operators must comply with standard business licensing requirements, zoning regulations that may restrict commercial activities in certain residential areas, and state tax obligations including Kentucky's transient room tax. The city follows Kentucky state regulations which allow municipalities to regulate STRs through zoning and licensing rather than outright bans. Property owners should verify compliance with local zoning ordinances, particularly in residential districts where commercial activities may be limited, and ensure proper business registration with the city clerk's office. Recent trends in Kentucky show increasing local regulation of STRs, with some municipalities implementing registration requirements and occupancy limits, though Cave City has maintained a relatively permissive approach while requiring basic compliance with existing business and zoning laws.

The best areas for Airbnb investment in Cave City, Kentucky are primarily concentrated around the Mammoth Cave National Park vicinity, particularly properties within 2-3 miles of the park entrance along Cave City Road and Mammoth Cave Parkway. This area attracts over 500,000 annual visitors to Mammoth Cave, the world's longest known cave system, making it ideal for tourist rentals year-round. The downtown Cave City area near Interstate 65 (Exit 53) offers excellent potential due to its convenience for travelers and proximity to local attractions like Dinosaur World and Kentucky Action Park, which draw families during peak summer months. Properties near the Green River and along KY-70 are attractive for outdoor enthusiasts interested in fishing, canoeing, and hiking activities. The area around Cave City Convention Center and near chain hotels on Doyle Avenue presents opportunities for business travelers and overflow accommodation during peak tourist seasons, particularly Memorial Day through Labor Day when occupancy rates can reach 80-90% and daily rates range from $100-200, compared to off-season rates of $60-120.

Cave City, Kentucky imposes a 3% transient room tax on all short-term rental accommodations including Airbnb properties, which applies to stays of less than 30 consecutive days. This tax is collected by the host at the time of booking or check-in and must be remitted to the Cave City Clerk's office on a monthly basis by the 15th of the following month using Form TR-1. Additionally, hosts must collect Kentucky's 6% state sales tax on lodging, which is remitted through the Kentucky Department of Revenue's online portal quarterly. Barren County also levies a 1% occupancy tax that applies to all transient accommodations within the county, bringing the total tax burden to approximately 10% for guests. Properties rented for 30 days or longer are exempt from these transient occupancy taxes, and certain nonprofit organizations may qualify for exemptions with proper documentation. Hosts must register with both the city and state tax authorities before beginning operations and maintain detailed records of all bookings and tax collections for audit purposes.

The total cost to start an Airbnb in Cave City, Kentucky is approximately $185,000-$220,000. Property purchase costs around $120,000-$150,000 based on median home prices in rural Kentucky markets. Furnishing a 2-3 bedroom property requires $15,000-$25,000 for beds, linens, furniture, appliances, and decor to create an attractive rental space. Initial setup costs including professional photography, listing creation, and basic renovations total $3,000-$5,000. Permits and fees vary but expect $500-$1,500 for business licenses, occupancy permits, and local registration requirements. Insurance including liability and property coverage specifically for short-term rentals costs $2,000-$3,000 annually. Utility deposits and connections for electricity, water, internet, and cable run $500-$1,000. First six months operating costs including utilities ($600/month), cleaning supplies and services ($300/month), maintenance reserves ($200/month), platform fees to Airbnb ($400/month based on $2,000 monthly revenue), and marketing total approximately $9,000. Property taxes and ongoing insurance add another $3,000-$4,000 for the initial six-month period, bringing the comprehensive startup investment to the $185,000-$220,000 range depending on property condition and furnishing quality chosen.

Airbnb properties in Cave City, Kentucky, typically generate annual revenues between $15,000-$35,000 for well-positioned properties near Mammoth Cave National Park, with average daily rates ranging from $75-$150 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% of revenue), utilities ($150-300 monthly), insurance ($800-1,500 annually), and maintenance costs averaging $2,000-4,000 yearly. Properties within 5 miles of Mammoth Cave National Park achieve occupancy rates of 60-75% during peak season (April-October) and 25-40% in winter months, resulting in net profit margins of 25-45% for successful operators. Success factors include proximity to the national park, unique property features like caves or historic elements, professional photography, responsive guest communication, and strategic pricing that capitalizes on peak tourist seasons. A typical 3-bedroom cabin near the park generating $28,000 annually might incur $16,000 in expenses, yielding a $12,000 net profit representing a 43% margin, though properties farther from attractions or poorly managed often struggle to achieve 20% occupancy rates and may operate at losses.

Airbnb investments in Cave City, Kentucky, typically generate annual ROI of 12-18% due to the city's proximity to Mammoth Cave National Park, which attracts approximately 500,000 visitors annually. Cash-on-cash returns generally range from 8-14% for properties purchased with 20-25% down payments, with average nightly rates of $80-120 for 2-3 bedroom properties during peak tourist seasons from April through October. Properties in Cave City usually achieve profitability within 18-24 months, benefiting from consistent demand from park visitors, with occupancy rates averaging 65-75% annually. The market has shown steady growth since 2019, with companies like Vacasa and RedAwning managing numerous properties in the area, and investors typically see break-even points around month 20-26 depending on initial investment and property management efficiency.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for Airbnb investors in Cave City, Kentucky. Local real estate agents serving the Cave City area include Coldwell Banker Legacy Group, RE/MAX Real Estate Professionals, and Century 21 Advantage Realty who have experience with investment properties near Mammoth Cave National Park. National services like Awning, RedAwning, and AirDNA provide market analysis and property management specifically for short-term rentals in tourist destinations like Cave City. Local property management companies such as Kentucky Lake Vacation Rentals and Mammoth Cave Area Property Management offer specialized Airbnb management services. Investment-focused platforms like Roofstock, BiggerPockets, and Mashvisor help investors analyze Cave City's rental market potential, while companies like Vacasa and AvantStay provide full-service Airbnb management for investors purchasing properties in the area. Local mortgage brokers and lenders familiar with investment properties in Barren County include Independence Bank and South Central Bank, and specialized short-term rental insurance providers like Proper Insurance and CBIZ offer coverage tailored to Airbnb properties in Kentucky's tourism markets.