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 Hall (approximately $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 subletting. Furnish the space with comfortable, durable furniture focusing on 2-4 bedroom configurations since families visiting Mammoth Cave are common guests, 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 (typically 5-15 minutes), and include high-quality photos showcasing the space and local attractions. Manage the property by establishing cleaning protocols between guests ($30-50 per turnover), responding promptly to inquiries, providing local recommendations for cave tours and restaurants like Sahara Steakhouse, and maintaining consistent availability during peak seasons (March-October) when Mammoth Cave sees highest visitation, while ensuring compliance with Kentucky's 6% sales tax collection requirements for short-term rentals.

To identify profitable short-term rental properties in Cave City, Kentucky, focus on locations within 5-10 minutes of Mammoth Cave National Park, as this drives 90% of tourism traffic, with properties along Cave City Convention Boulevard and near Interstate 65 exits performing best. Target 2-4 bedroom homes or cabins with rustic charm, modern amenities like WiFi and full kitchens, outdoor spaces, and parking for multiple vehicles, as families and groups visiting the cave system typically stay 2-3 nights and value convenience. Pricing analysis should consider seasonal fluctuations with peak rates of $150-250/night during summer months (May-September) and lower winter rates of $80-120/night, while monitoring competitors like established cabin rentals near the park entrance and newer Airbnb properties in town. Competition research reveals approximately 50-75 active STR properties in the area as of 2023, with successful operators like local cabin rental companies and individual Airbnb hosts achieving 65-80% occupancy rates during peak season. Essential tools include AirDNA for market analysis showing Cave City's average daily rates and occupancy trends, Mashvisor for investment property analysis, STR Helper for revenue projections, and local resources like the Cave City Tourism Commission for visitor statistics and the Hart County Planning Commission for zoning regulations, while partnering with local property management companies familiar with the tourist corridor can provide valuable market insights.

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. Submit an application including property deed or lease agreement, floor plan showing maximum occupancy, proof of liability insurance (minimum $1 million), contact information for a local property manager if you're non-resident, parking plan, and waste management plan. Required documents also include a site plan, neighboring property owner notification forms, and payment of approximately $150-300 in application fees plus $75-150 annual business license fee. The process typically takes 30-45 days and requires a public hearing before the Planning Commission, where neighbors can voice concerns. Cave City specific requirements include maintaining maximum occupancy limits based on bedrooms and square footage, providing adequate off-street parking (typically 2 spaces minimum), ensuring compliance with fire safety codes, maintaining quiet hours from 10 PM to 7 AM, and having a local contact person available 24/7 for emergencies. Properties must also meet all building codes, have working smoke and carbon monoxide detectors, and maintain the property in accordance with residential neighborhood standards.

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 transient room tax collection. The city follows Kentucky state regulations which allow municipalities to regulate but not completely ban STRs, and Cave City's proximity to Mammoth Cave National Park makes it a popular destination for vacation rentals. Property owners should verify current zoning compliance for their specific location and obtain necessary business licenses, as enforcement has become more structured since 2022 when many Kentucky municipalities began implementing clearer STR frameworks. No recent major legal changes have specifically targeted Cave City's STR market, but operators should monitor local ordinances as tourism-dependent communities like Cave City continue to balance resident concerns with economic benefits from vacation rental properties.

The best areas for Airbnb investment in Cave City, Kentucky are primarily concentrated around the Mammoth Cave National Park vicinity, particularly properties within 1-2 miles of the park entrance along Mammoth Cave Parkway and Cave City's downtown core near the intersection of Happy Valley Road and Mammoth Cave Road. This area attracts approximately 500,000+ annual visitors to Mammoth Cave National Park, making it ideal for tourist accommodations year-round with peak seasons in spring through fall. The Historic Downtown Cave City district offers charm for visitors seeking authentic Kentucky experiences, while properties near Dinosaur World and Kentucky Action Park benefit from family tourism. Areas along I-65 corridor provide excellent access for business travelers and tourists heading to multiple regional attractions. The Green River region southeast of town appeals to outdoor enthusiasts interested in canoeing, fishing, and camping who prefer upgraded accommodations over traditional camping, while properties near Barren River Lake State Resort Park capture spillover tourism from that destination approximately 30 minutes away.

Cave City, Kentucky imposes a 3% transient room tax on short-term rental accommodations including Airbnbs, which applies to stays of 30 days or less. This local occupancy tax is collected by the host at the time of booking or check-in and must be remitted monthly to the Cave City Clerk's office by the 15th of the following month using Form TR-1. Additionally, Kentucky state sales tax of 6% applies to lodging accommodations, which Airbnb typically collects and remits directly to the Kentucky Department of Revenue on behalf of hosts through their automated tax collection system implemented in 2019. Barren County may also impose a 1% tourism tax on lodging, bringing the total tax burden to approximately 10% of the rental amount. Stays exceeding 30 consecutive days by the same guest are generally exempt from these transient occupancy taxes, and certain nonprofit or government-related stays may qualify for exemptions with proper documentation. Hosts must register with local authorities and maintain records of all bookings and tax collections for audit purposes.

Starting an Airbnb in Cave City, Kentucky requires approximately $180,000-220,000 in total initial investment. Property purchase costs around $150,000 based on median home prices in the area as of 2023. Furnishing a 2-3 bedroom property typically costs $15,000-25,000 including beds, linens, kitchen essentials, living room furniture, and décor to create an appealing guest experience. Initial setup expenses including professional photography, listing creation, welcome materials, and basic amenities total approximately $2,000-3,000. Permits and fees vary but expect $500-1,500 for business licenses, short-term rental permits, and any required inspections from Cave City and Hart County authorities. Insurance costs run $1,200-2,000 annually for short-term rental coverage beyond standard homeowner's insurance. Utility setup and deposits for electricity, water, internet, and cable typically cost $500-800 initially. First six months of operating costs including utilities ($200-300/month), cleaning supplies and services ($150-250/month), maintenance reserves ($100-200/month), platform fees to Airbnb and VRBO (3% of bookings), and marketing expenses total approximately $4,000-6,000, assuming moderate occupancy rates during the initial period.

Airbnb properties in Cave City, Kentucky show moderate profitability potential, primarily driven by tourism to nearby Mammoth Cave National Park. Properties typically generate $15,000-$35,000 annually in gross revenue, with 2-3 bedroom homes averaging $85-$120 per night and achieving 45-65% occupancy rates during peak tourist seasons (April-October). Operating expenses generally run 35-50% of gross revenue, including cleaning fees ($40-60 per turnover), property management (15-25%), utilities ($150-250 monthly), insurance ($1,200-2,000 annually), and maintenance costs. Net profit margins typically range from 15-35% for well-managed properties, with successful hosts reporting annual profits of $8,000-$18,000 on properties valued at $120,000-$200,000. Key success factors include proximity to Mammoth Cave (within 5 miles), professional photography, competitive pricing during cave tour seasons, and maintaining high cleanliness standards. Properties located on main tourist routes like KY-70 and those offering amenities like hot tubs or fire pits command premium rates, while hosts who actively manage their listings and respond quickly to inquiries achieve higher occupancy rates and better reviews, directly correlating with increased profitability in this tourism-dependent market.

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 well-positioned properties near the park entrance or downtown area, with initial investment costs averaging $80,000-$150,000 for suitable rental properties. Most investors achieve profitability within 18-24 months, benefiting from Cave City's seasonal tourism patterns with peak occupancy rates of 75-85% during summer months (May-September) and 45-60% during off-season periods. Properties within 2-3 miles of Mammoth Cave typically command nightly rates of $85-$140, while those offering unique amenities like hot tubs or game rooms can achieve premium rates of $120-$180 per night, resulting in gross annual revenues of $25,000-$45,000 for active hosts who maintain high guest satisfaction ratings and optimize their pricing strategies throughout the year.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Cave City, Kentucky. Local real estate agents like those at Coldwell Banker Legacy Group and RE/MAX Properties East in nearby Bowling Green serve the Cave City area and have experience with investment properties near Mammoth Cave National Park. Awning provides nationwide Airbnb property management and investment analysis services for Cave City investors. Mashvisor offers market analysis tools for short-term rental investments in Kentucky markets including Cave City. Local agents at Keller Williams and Century 21 in the greater south-central Kentucky region frequently work with investors seeking vacation rental properties. AirDNA provides market data and analytics for Cave City's short-term rental market performance. RedAwning offers property management services for Airbnb investments in Kentucky. Local property management companies like Mammoth Cave Properties and Cave Country Property Management specialize in vacation rental management in the Cave City area. BiggerPockets connects investors with local real estate professionals experienced in Kentucky Airbnb investments, while Roofstock and Arrived Homes occasionally feature Kentucky investment properties including those suitable for short-term rentals near tourist destinations like Cave City.