Is Collierville, Tennessee Good for Airbnb Investment?

To start an Airbnb in Collierville, Tennessee, begin by researching local regulations through the Collierville Planning Department and Town Hall, as the city requires short-term rental permits and compliance with zoning ordinances that typically restrict rentals to certain residential areas with potential occupancy limits of 2-4 guests per bedroom. Obtain necessary permits including a business license from Collierville ($50-100 annually), short-term rental permit ($200-400), and ensure compliance with Tennessee state tax requirements including 9.75% sales tax registration. Find a suitable property in approved zones, focusing on single-family homes or condos in neighborhoods like Schilling Farms or historic downtown areas, with properties typically ranging $200,000-500,000. Furnish the space with quality furniture, linens, kitchen essentials, and safety equipment including smoke detectors, carbon monoxide detectors, and fire extinguishers as required by Tennessee fire codes. Create your Airbnb listing with professional photos, competitive pricing ($80-200/night based on local market), and detailed descriptions highlighting proximity to Memphis (20 minutes) and local attractions. Manage the property by establishing cleaning protocols between guests, responding to inquiries within an hour, coordinating check-ins/check-outs, maintaining the property regularly, and ensuring compliance with ongoing permit renewals and tax obligations to both Tennessee Department of Revenue and Shelby County tax assessor.

To identify profitable short-term rental properties in Collierville, Tennessee, focus on locations within 15-20 minutes of Memphis attractions like Graceland and Beale Street, near Shelby Farms Park, or close to the historic town square and local amenities. Target 3-4 bedroom single-family homes built after 1990 with modern amenities, pools, large yards, and parking for multiple vehicles, as these appeal to families visiting the area. Analyze pricing using AirDNA and Mashvisor to benchmark against comparable properties, aiming for average daily rates of $120-180 depending on size and amenities, with occupancy rates above 65% being profitable in this market. Research competition by studying existing Airbnb and VRBO listings within a 3-mile radius, noting their pricing, amenities, and guest reviews to identify gaps in the market. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through agents familiar with Collierville's $200,000-400,000 residential market, while monitoring seasonal demand patterns driven by Memphis tourism, corporate travel to nearby FedEx facilities, and family visits to the highly-rated Collierville school district.

To obtain an Airbnb/STR permit in Collierville, Tennessee, you must first contact the Collierville Planning Department at Town Hall located at 500 Poplar View Parkway to determine current zoning compliance and obtain a business license application. Required documents typically include a completed business license application, property deed or lease agreement, floor plan of the rental unit, parking plan showing adequate spaces, contact information for a local property manager if you're non-resident, certificate of insurance, and Tennessee sales tax registration. The business license fee is approximately $50-100 annually, with potential additional zoning compliance fees of $100-200. You'll need to schedule an inspection with the Building Department to ensure the property meets safety codes including smoke detectors, carbon monoxide detectors, and proper egress windows. The timeline is generally 2-4 weeks from application submission to approval, assuming no zoning issues arise. Collierville specifically requires STRs to be owner-occupied or have a designated local contact person available 24/7, maintain adequate off-street parking (typically 2 spaces minimum), comply with noise ordinances, and limit occupancy based on bedroom count plus two additional guests. Properties in certain residential zones may face additional restrictions or require conditional use permits, so verify zoning compatibility before proceeding with your application.

Short-term rentals (STRs) are legal in Collierville, Tennessee, but operate under specific regulations established by the city. Collierville requires STR operators to obtain a business license and comply with zoning restrictions that generally limit short-term rentals to certain residential districts while prohibiting them in some neighborhoods to preserve residential character. The city typically requires properties to meet safety standards, maintain adequate parking, and follow occupancy limits, with operators often needing to provide contact information for a local responsible party available 24/7 for any issues. Recent years have seen Collierville, like many Tennessee municipalities, refining their STR ordinances to balance tourism revenue with neighborhood concerns, including implementing registration requirements and establishing complaint procedures. The city generally allows STRs in single-family homes and some multi-family properties, but specific areas may have additional restrictions, and operators must comply with state tax requirements including collecting and remitting appropriate lodging taxes.

The most promising Airbnb investment areas in Collierville, Tennessee include the Historic Town Square district, which attracts visitors for its charming antique shops, restaurants, and annual events like the Sunset on the Square concert series, making it ideal for leisure travelers seeking authentic small-town experiences. The areas near Shelby Farms Park, particularly neighborhoods along Poplar Avenue and near the greenway systems, offer excellent potential due to proximity to outdoor recreation activities and the park's growing popularity for events and festivals. Properties near the W.C. Johnson Park and surrounding residential areas appeal to families visiting for youth sports tournaments and local events. The neighborhoods around Collierville High School and the town's business district along Poplar Avenue cater well to business travelers and visitors attending corporate events or meetings at local businesses. Additionally, areas near the historic Collierville Depot and within walking distance of the town center provide strong rental potential due to their proximity to restaurants, shopping, and cultural attractions, while offering easy access to Memphis (about 30 minutes away) for guests who want a quieter suburban base while visiting the larger metropolitan area.

Airbnb properties in Collierville, Tennessee are subject to multiple lodging taxes including Tennessee's state sales tax of 7%, state hotel occupancy tax of 1.5%, and Shelby County's hotel/motel tax of 6%. The City of Collierville imposes an additional local hotel/motel occupancy tax of 5%, bringing the total lodging tax rate to approximately 19.5%. These taxes are typically collected by Airbnb directly from guests at the time of booking and remitted to the appropriate tax authorities on behalf of hosts through Airbnb's automated tax collection service, which began around 2018 for Tennessee. Hosts who collect taxes independently must register with the Tennessee Department of Revenue and remit state taxes monthly if collections exceed $100, while local taxes are remitted to Shelby County and Collierville respectively. Exemptions may apply for stays exceeding 30 consecutive days, which are generally considered long-term rentals rather than transient accommodations, and for certain government or non-profit travelers with proper documentation, though specific exemption criteria vary by jurisdiction.

The total cost to start an Airbnb in Collierville, Tennessee is approximately $385,000-$425,000. Property purchase costs around $350,000 based on median home prices in this Memphis suburb as of 2023-2024. Furnishing a 3-bedroom property requires $15,000-$20,000 for quality furniture, bedding, kitchen essentials, and decor from retailers like IKEA, Wayfair, and local furniture stores. Initial setup costs including professional photography, listing creation, smart locks, and welcome amenities total $2,000-$3,000. Permits and fees in Shelby County include short-term rental permits ($200-$500), business license ($50-$100), and potential HOA approval fees. Insurance coverage through companies like Proper Insurance or CBIZ adds $1,500-$2,500 annually for short-term rental specific policies. Utility setup and deposits for electricity (MLGW), internet, cable, and water total $500-$800. First six months operating costs including utilities ($200/month), cleaning services ($75 per turnover), maintenance reserves ($300/month), platform fees to Airbnb and Vrbo (3% of bookings), and marketing expenses total approximately $4,000-$6,000, assuming 60-70% occupancy rates typical for the Collierville market.

Airbnb properties in Collierville, Tennessee typically generate annual revenues between $18,000-$35,000 for well-positioned homes, with average daily rates ranging from $85-$150 depending on property size and amenities. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($40-80 per turnover), property management (15-25% of revenue), utilities ($150-300 monthly), insurance ($1,200-2,400 annually), and maintenance costs averaging $2,000-4,000 yearly. Net profit margins typically range from 15-35% for successful properties, with higher-end homes near Shelby Farms or historic downtown achieving better performance. Success factors include proximity to Memphis attractions (20-minute drive), competitive pricing against hotel alternatives, professional photography, consistent 4.8+ star ratings, and targeting business travelers and families visiting the greater Memphis area. Properties with unique features like pools, large yards, or historic charm command premium rates, while basic 3-bedroom homes in standard subdivisions face more competition and lower margins around 10-20%. The market benefits from Memphis International Airport proximity and corporate demand from FedEx headquarters, though seasonal fluctuations occur with lower winter occupancy rates of 45-60% compared to peak summer months reaching 70-85% occupancy.

Based on Collierville, Tennessee market conditions, Airbnb investments typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14% depending on property type and location within the suburb. Properties near the historic town square and those offering 3-4 bedrooms tend to perform at the higher end of this range, with average daily rates of $120-180 and occupancy rates of 65-75% annually. Initial profitability usually occurs within 18-24 months after accounting for startup costs, furnishing, and marketing expenses, while full ROI realization typically takes 3-4 years. The Memphis metropolitan area's growing tourism sector and Collierville's appeal as a family-friendly destination with proximity to attractions like Graceland contribute to consistent booking demand, though seasonal variations show stronger performance during spring and fall months with summer peaks during family vacation periods.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for investors in Collierville, Tennessee. Local real estate agents like Crye-Leike Realtors and Keller Williams Realty have agents experienced in investment properties who understand the Collierville market dynamics since 2018. National services include Mashvisor, which provides Airbnb analytics and property recommendations, and BiggerPockets, which connects investors with local professionals in the Memphis metropolitan area. AirDNA offers market data and revenue projections specifically for Collierville's short-term rental market, while Awning provides full-service Airbnb property management for investors. Local companies like Memphis Investment Properties and Tennessee Real Estate Investors Group have been helping clients identify profitable vacation rental opportunities in Collierville since around 2019. RedAwning and Vacasa also provide market analysis and property management services for investors looking to enter the Collierville Airbnb market, with many of these services expanding their Tennessee operations between 2020-2022 to capitalize on the growing short-term rental demand in suburban Memphis areas.