Is Collierville, Tennessee Good for Airbnb Investment?

To start an Airbnb in Collierville, Tennessee, begin by researching local zoning laws and regulations through the Town of Collierville Planning Department, as short-term rentals may require special permits or be restricted in certain residential zones. Contact the Collierville Building Department to obtain necessary permits, which typically include a business license ($50-100 annually) and potentially a short-term rental permit if required by municipal code. Find a suitable property by purchasing or leasing in areas zoned for commercial or mixed-use, or residential areas that allow short-term rentals, focusing on neighborhoods near attractions like the Historic Town Square or with easy access to Memphis (20 minutes away). Furnish the property with quality furniture, linens, kitchen essentials, and amenities like WiFi, smart TV, and local guidebooks, budgeting $10,000-25,000 for a complete setup depending on property size. Create your listing on Airbnb and other platforms like VRBO, including professional photos, detailed descriptions highlighting proximity to Memphis attractions, Shelby Farms Park, and local restaurants, with competitive pricing around $80-150 per night based on local market rates. Manage the property by establishing cleaning protocols between guests (budget $30-50 per turnover), installing keyless entry systems, responding promptly to guest inquiries, and ensuring compliance with Tennessee's 9.25% sales tax plus local occupancy taxes that may apply to short-term rentals in Shelby County.

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 while targeting quiet residential neighborhoods that appeal to families and business travelers seeking suburban tranquility. Prioritize 3-4 bedroom single-family homes built after 1990 with modern amenities, full kitchens, dedicated workspaces, outdoor spaces, and parking, as these command higher nightly rates of $120-180 compared to smaller units at $80-120. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against similar properties, aiming for 65-75% occupancy rates with gross yields of 8-12% annually. Research competition by analyzing existing STR listings within a 3-mile radius, identifying gaps in amenities or pricing, and monitoring seasonal demand patterns driven by Memphis tourism, FedEx corporate travel, and University of Memphis events. Utilize tools like Rabbu and AllTheRooms for market data, check Collierville's municipal regulations for STR compliance requirements, partner with local property management companies familiar with Tennessee STR laws, and leverage the town's reputation for excellent schools and low crime rates to attract family travelers willing to pay premium rates for safe, suburban accommodations near Memphis attractions.

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, liability insurance certificate (minimum $1 million coverage), and a signed affidavit acknowledging compliance with all safety codes. The application fee is estimated at $150-300 annually, with additional inspection fees of approximately $75-150. Submit your complete application to the Planning Department, schedule a required safety inspection with the Building Department covering smoke detectors, carbon monoxide detectors, fire extinguishers, and egress requirements, and await approval which typically takes 30-45 days. Collierville requires STRs to maintain a maximum occupancy of 2 people per bedroom plus 2 additional guests, provide adequate off-street parking (typically 1 space per bedroom), maintain quiet hours from 10 PM to 7 AM, display the permit number in all advertisements, and have a local contact person available 24/7 for emergencies. Once approved, you must renew annually and comply with all ongoing reporting requirements and inspections.

Short-term rentals (STRs) are legal in Collierville, Tennessee, but operate under specific regulations established by the city. As of 2023, Collierville requires STR operators to obtain a business license and comply with zoning restrictions that primarily limit short-term rentals to certain residential districts while prohibiting them in some neighborhoods to preserve residential character. The city has implemented occupancy limits, parking requirements, and noise ordinances that STR properties must follow, with violations subject to fines and potential license revocation. Properties must meet safety standards including smoke detectors and emergency egress requirements, and operators are required to provide local contact information for guests and neighbors. Recent changes in 2022-2023 have included stricter enforcement mechanisms and clearer definitions of what constitutes a short-term rental, with the city requiring annual license renewals and periodic inspections to ensure compliance with health and safety codes.

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 and Liberty Festival, making it ideal for leisure travelers seeking authentic small-town experiences. The areas near Shelby Farms Park (though technically in Memphis, many visitors stay in nearby Collierville) offer excellent potential due to the park's popularity for outdoor recreation, events, and its proximity to major Memphis attractions while providing a quieter suburban setting. Neighborhoods along Poplar Avenue and near the Wolf River corridor are attractive for business travelers working in Memphis who prefer staying in Collierville's safer, more upscale environment while maintaining easy highway access to downtown Memphis, FedEx headquarters, and Memphis International Airport. The residential areas near Collierville High School and the town center benefit from sports tourism, graduation events, and family visits, while properties close to the Historic Collierville Depot and antique district capitalize on heritage tourism and weekend getaways from Memphis and Nashville visitors seeking a peaceful retreat with small-town charm and easy access to outdoor activities.

Airbnb properties in Collierville, Tennessee are subject to multiple lodging taxes including Tennessee's state hotel occupancy tax of 7%, Shelby County's hotel/motel tax of 2.75%, and potentially a local Collierville occupancy tax estimated at 3-5%. The total combined rate typically ranges from 12.75% to 14.75% of gross rental receipts. Tennessee requires hosts with gross rental income exceeding $2,500 annually to register for a business tax license and collect these taxes from guests, remitting them monthly to the Tennessee Department of Revenue by the 20th of the following month using Form FAE 174. Shelby County taxes are collected separately and remitted to the Shelby County Trustee's office. Airbnb may collect and remit some of these taxes automatically through their platform for participating jurisdictions, but hosts remain ultimately responsible for compliance. Properties rented for 30 days or longer are typically exempt from occupancy taxes, and some jurisdictions may exempt rentals under certain dollar thresholds, though specific exemption amounts vary by locality and hosts should verify current requirements with local tax authorities.

The total cost to start an Airbnb in Collierville, Tennessee is approximately $385,000-$425,000. Property purchase costs around $350,000 based on the median home price in this Memphis suburb. Furnishing a 3-bedroom property requires $15,000-$20,000 for quality furniture, bedding, kitchenware, and decor from retailers like Wayfair, IKEA, and local furniture stores. Initial setup costs include $2,000-$3,000 for professional photography, listing creation, smart locks, and security systems. Permits and fees total $500-$1,000 including business license, short-term rental permit, and potential HOA approvals. Insurance runs $1,500-$2,500 annually for landlord and short-term rental coverage through companies like Proper Insurance or CBIZ. Utility setup and deposits cost $500-$800 for electricity, water, gas, internet, and cable. First six months operating costs include $3,600 for utilities, $1,200 for cleaning services, $600 for supplies and maintenance, $1,800 for Airbnb host fees (3% of estimated $30,000 revenue), and $1,500 for marketing and miscellaneous expenses, totaling approximately $8,700. Property taxes and ongoing maintenance should also be factored at roughly $3,500 and $2,000 respectively for the initial six-month period.

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 due to proximity to Memphis attractions while maintaining suburban appeal. Success factors include professional photography, consistent 4.8+ star ratings, strategic pricing during peak seasons (spring/fall), and targeting business travelers visiting FedEx headquarters or families attending events at nearby venues. Properties with unique features like pools, game rooms, or pet-friendly policies command premium rates, while those within 20 minutes of Memphis International Airport benefit from corporate traveler demand. The market has shown resilience since 2020, with occupancy rates of 60-75% for well-managed properties, though competition has increased as more hosts entered the market, making professional management and distinctive amenities crucial for maintaining profitability above the 20% margin threshold.

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 city. Properties near the historic town square and newer developments like Schilling Farms command premium nightly rates of $120-180, while standard residential properties average $80-120 per night with 65-75% occupancy rates throughout the year. Initial profitability usually occurs within 18-24 months for well-positioned properties, with break-even on cash investment typically achieved in 6-8 years. The Memphis metropolitan area's corporate travel demand, combined with Collierville's family-friendly attractions and proximity to FedEx headquarters, supports consistent booking rates, though investors should expect seasonal fluctuations with peak performance during spring and fall months when occupancy can reach 80-85%.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Collierville, Tennessee. Local real estate agents specializing in investment properties include Keller Williams Realty's investment division, Crye-Leike Realtors with their vacation rental specialists, and RE/MAX Elite's short-term rental team who have deep knowledge of Collierville's tourism patterns and zoning regulations. National services like Awning, RedAwning, and Vacasa offer end-to-end investment property acquisition and management services in the Memphis metropolitan area including Collierville. AirDNA and Mashvisor provide market analytics and property performance forecasting specifically for short-term rentals in Tennessee markets. Local property management companies such as Memphis Short Term Rentals and Mid-South Vacation Rentals offer acquisition consulting services, while national platforms like Roofstock and BiggerPockets connect investors with Airbnb-suitable properties and local market experts. Investment-focused real estate firms like Memphis Investment Properties and Tennessee Real Estate Investors Group maintain networks of agents experienced in identifying profitable short-term rental opportunities in Collierville's growing tourism market near Memphis attractions.