Is Cleveland, Tennessee Good for Airbnb Investment?

To start an Airbnb in Cleveland, Tennessee, begin by researching local zoning laws and regulations through the Cleveland Planning Department, as Bradley County and Cleveland may require business licenses and compliance with residential zoning restrictions that typically allow short-term rentals in most residential areas with proper registration. Obtain necessary permits including a business license from Cleveland City Hall (estimated $50-100 annually), ensure your property meets fire safety codes, and verify compliance with Tennessee state tax requirements for short-term rental income reporting. Find a suitable property by searching Cleveland's residential neighborhoods near attractions like the Ocoee River or downtown areas, considering properties with 2-3 bedrooms that can accommodate families visiting for outdoor activities, with average purchase prices ranging $150,000-250,000 as of recent years. Furnish the property with durable, comfortable furniture focusing on outdoor enthusiasts' needs, including quality bedding, full kitchen amenities, outdoor seating, and local guidebooks, budgeting approximately $8,000-15,000 for complete furnishing. List your property on Airbnb and VRBO platforms with professional photography highlighting Cleveland's proximity to whitewater rafting, hiking trails, and Chattanooga attractions, setting competitive rates around $80-150 per night based on local market analysis. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating key exchanges through lockboxes or smart locks, maintaining the property regularly, and building relationships with local cleaning services and maintenance contractors to ensure consistent guest satisfaction and positive reviews.

To identify profitable short-term rental properties in Cleveland, Tennessee, focus on locations within 2-3 miles of Ocoee River whitewater rafting areas, near Cherokee National Forest access points, and close to downtown Cleveland's business district around Keith Street. Target 2-4 bedroom properties with outdoor spaces, hot tubs, fire pits, and modern amenities that appeal to adventure tourists and business travelers, with purchase prices between $150,000-$300,000 offering strong cash-on-cash returns. Analyze comparable STR rates using AirDNA and Mashvisor, targeting properties that can command $100-200 per night during peak outdoor recreation seasons (April-October), while researching competition density through Airbnb and VRBO searches within 5-mile radius to ensure market isn't oversaturated. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through Cleveland Board of Realtors, while connecting with property managers like Vacasa or RedAwning who operate in the Tennessee market, and consider properties near Lee University for consistent demand from visiting families and university events throughout the year.

To obtain an Airbnb/STR permit in Cleveland, Tennessee, you must first contact the Cleveland Planning and Zoning Department at City Hall located at 190 Church Street NE to determine if short-term rentals are permitted in your specific zoning district, as the city requires compliance with local zoning ordinances. Submit an application for a business license through the City Clerk's office, providing required documents including proof of property ownership or lease agreement, liability insurance certificate (minimum $1 million coverage), floor plan of the rental unit, and completed application form with property owner contact information. Pay the applicable business license fee of approximately $50-100 annually, plus any zoning compliance fees around $25-75. The approval process typically takes 2-4 weeks depending on zoning review requirements and inspection scheduling. Cleveland requires STR operators to maintain current business licenses, display permit numbers in rental listings, comply with occupancy limits based on property size and parking availability, maintain guest registries, and ensure properties meet all building and fire safety codes. Additional requirements may include obtaining a state sales tax permit through the Tennessee Department of Revenue and registering with the Tennessee Department of Commerce for hotel/motel tax collection, with properties subject to periodic inspections to ensure ongoing compliance with city ordinances and safety standards.

Short-term rentals (STRs) are legal in Cleveland, Tennessee, but operate under specific municipal regulations that require property owners to obtain proper permits and business licenses from the city. The city allows STRs in most residential zones but prohibits them in certain historic districts and areas zoned exclusively for single-family residential use without special permits. Current restrictions include occupancy limits based on property size, parking requirements (typically one space per bedroom), noise ordinances with quiet hours from 10 PM to 7 AM, and mandatory registration with the city's planning department. Property owners must also comply with fire safety codes, maintain liability insurance, and collect applicable local taxes. Recent changes in 2022-2023 included stricter enforcement of existing regulations and increased permit fees, while the city has been considering additional restrictions on the total number of STR permits allowed in certain neighborhoods due to concerns about housing availability and neighborhood character, though no caps have been implemented as of 2024.

The best Airbnb investment areas in Cleveland, Tennessee include the downtown historic district near the Ocoee River, which attracts whitewater rafting enthusiasts and outdoor adventure tourists year-round, particularly during the spring and summer rafting seasons. The Red Clay State Historic Park area offers strong potential due to its proximity to the Cherokee heritage site and the annual Red Clay Festival, drawing history buffs and cultural tourists. Properties near Lee University benefit from consistent demand from visiting families, prospective students, and academic conference attendees throughout the academic year. The Craigmiles area and neighborhoods close to the Cleveland/Bradley County Airport capture business travelers and corporate visitors to local manufacturing facilities including Whirlpool and Hardwick Stove Company. Areas within walking distance of the Cleveland Greenway and near the planned downtown revitalization projects show promising appreciation potential, while properties close to the historic courthouse square benefit from weekend tourists exploring antique shops and local festivals like the annual Christmas parade and farmers markets.

Cleveland, Tennessee imposes a hotel/motel tax of 5% on short-term rental accommodations including Airbnbs, which is collected by the city and applies to stays of less than 30 consecutive days. The tax is typically collected directly from guests at the time of booking through Airbnb's automatic tax collection system, which remits payments quarterly to the city on behalf of hosts, though individual hosts may need to register with the Cleveland Finance Department if they collect taxes manually. Additionally, Tennessee state sales tax of 7% applies to short-term rentals, and Bradley County may impose an additional occupancy tax of approximately 2.75%, bringing the total tax burden to around 14.75% for guests. Hosts must obtain a business license from Cleveland and may need to register for a sales tax permit with the Tennessee Department of Revenue if not using Airbnb's collection service. Exemptions typically include stays of 30 days or longer, which are considered long-term rentals rather than transient accommodations, and certain government or non-profit organization bookings may qualify for exemptions with proper documentation.

Starting an Airbnb in Cleveland, Tennessee requires approximately $180,000-220,000 in total initial investment. Property purchase costs around $150,000 based on median home prices in the Cleveland area as of 2023. Furnishing a 2-3 bedroom property typically runs $8,000-12,000 including beds, linens, kitchen essentials, living room furniture, and basic appliances. Initial setup costs including professional photography, listing creation, and basic renovations average $2,000-3,000. Permits and fees in Bradley County include business license ($50), short-term rental permit ($200), and potential HOA approval fees totaling approximately $500-800. Insurance for short-term rentals costs roughly $1,200-1,800 annually, with the first year paid upfront. Utility deposits and connections for electricity, water, gas, internet, and cable run about $800-1,200. First six months of operating costs including utilities ($150/month), cleaning supplies ($100/month), maintenance reserves ($200/month), platform fees (3% of bookings estimated at $300/month), and marketing budget ($100/month) total approximately $4,500-5,100.

Airbnb properties in Cleveland, Tennessee show moderate profitability potential with average daily rates ranging from $75-120 depending on property type and location proximity to Ocoee River recreational activities. A typical 3-bedroom home generates approximately $2,800-4,200 monthly revenue during peak seasons (May-September) when whitewater rafting and outdoor tourism drive demand, while off-season months average $1,500-2,500. Operating expenses typically include 25-30% for cleaning and maintenance, 3% Airbnb service fees, 8-12% property management if outsourced, plus utilities averaging $200-300 monthly, resulting in net profit margins of 35-45% for well-managed properties. Success factors include proximity to Ocoee River (properties within 5 miles command 20-30% premium rates), professional photography, consistent 4.8+ star ratings, and amenities like hot tubs or fire pits that appeal to adventure tourists. Properties near downtown Cleveland or with lake access perform better than rural locations, with some hosts reporting annual profits of $15,000-25,000 on properties purchased for $150,000-200,000. The market benefits from Tennessee's favorable short-term rental regulations and growing outdoor recreation tourism, though competition has increased since 2021 as more investors entered the market following the pandemic-driven travel trend shifts.

Airbnb investments in Cleveland, Tennessee typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-15% depending on property type and location within the market. Properties near Ocoee River and outdoor recreation areas command higher nightly rates of $80-150, while standard residential properties average $60-100 per night with 65-75% occupancy rates throughout the year. Initial investment recovery and profitability generally occurs within 18-24 months for well-positioned properties, with vacation rental management companies like Vacasa and RedAwning reporting strong performance in the Cleveland market due to proximity to Chattanooga (30 miles) and outdoor tourism attractions. Properties purchased in the $150,000-250,000 range with 20-25% down payments typically achieve positive cash flow within 6-12 months, while luxury cabins and lakefront properties in the $300,000+ range may see ROI of 15-22% annually but require 24-36 months to reach full profitability due to higher initial capital requirements and seasonal demand fluctuations.

STRSearch is a national platform that helps investors identify profitable short-term rental properties in Cleveland, Tennessee, along with local real estate agents like Keller Williams Cleveland and RE/MAX Real Estate Partners who have experience with investment properties in the area. National services include Mashvisor, AirDNA, and Rabbu which provide market analysis and property recommendations for Airbnb investments. Local Cleveland-based agents such as those at Century 21 Legacy and Coldwell Banker Kinard Realty often work with investors seeking vacation rental properties near Ocoee River and Cherokee National Forest attractions. Additional national platforms like BiggerPockets, Roofstock, and HomeUnion offer investment property search tools and market data for the Cleveland market. Local property management companies such as Tennessee Mountain Rentals and Ocoee River Properties can assist with both acquisition and ongoing management of short-term rental investments in the area, while national services like RedAwning and Vacasa provide comprehensive investment and management solutions for Cleveland's growing vacation rental market driven by outdoor recreation tourism.