Is Cookeville, Tennessee Good for Airbnb Investment?

To start an Airbnb in Cookeville, Tennessee, begin by researching local regulations through the Cookeville Planning Department and Putnam County offices, as the city requires short term rental permits and compliance with zoning ordinances that typically restrict rentals to certain residential areas.

Launch checklist

• Obtain necessary permits including a business license from the City of Cookeville (approximately $50 to 100), a short term rental permit (estimated $200 to 300 annually), and ensure compliance with Tennessee state tax requirements including sales tax registration.
• Find a suitable property in permitted zones, focusing on areas near Tennessee Tech University or downtown Cookeville where demand is higher, with properties typically ranging from $150,000 to 400,000.
• Furnish the space with essential amenities including Wi Fi, linens, kitchen supplies, and safety equipment like smoke detectors and fire extinguishers as required by local fire codes.
• Create your listing on Airbnb and other platforms like VRBO, highlighting proximity to Tennessee Tech, Burgess Falls State Park, and Cookeville Regional Medical Center.
• For management, establish cleaning protocols between guests, implement keyless entry systems, maintain 24/7 guest communication, and consider hiring local cleaning services (typically $75 to 125 per turnover) and property management companies if needed.

To identify profitable short term rental properties in Cookeville, Tennessee, focus on locations within 10 to 15 minutes of Tennessee Tech University for consistent student and visitor demand, properties near Cummins Falls State Park and Burgess Falls for outdoor tourism appeal.

What to prioritize

• Target 3 to 4 bedroom properties with 2+ bathrooms, outdoor spaces like decks or fire pits, modern amenities including high speed internet.
• Analyze pricing using AirDNA and Mashvisor to track seasonal demand patterns, with peak rates during Tennessee Tech events, fall foliage season, and summer outdoor activities.
• Research competition by monitoring existing Airbnb and VRBO listings within a 5 mile radius, noting occupancy rates typically range 60 to 75% annually, and identify gaps in luxury or pet friendly accommodations.
• Utilize Cookeville specific resources including the Putnam County tourism board data, local real estate agents familiar with STR regulations, and the city's zoning requirements which generally allow STRs in residential areas with proper permits.

To obtain an Airbnb/STR permit in Cookeville, Tennessee, you must first contact the Cookeville Planning Department at City Hall located at 45 E Broad Street to determine if short term rentals are permitted in your specific zoning district, as the city requires compliance with local zoning ordinances.

Documents and approvals

• 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.
• You'll need to pay the business license fee of approximately $50 to 75 annually, plus any applicable zoning compliance fees of around $100 to 150.
• The property must pass a safety inspection conducted by the Cookeville Fire Department, which includes verification of smoke detectors, carbon monoxide detectors, fire extinguishers, and emergency exit plans, with inspection fees typically costing $75 to 100.
• Additionally, register with the Tennessee Department of Revenue for state sales tax collection and remittance, and obtain a Certificate of Compliance from Putnam County Health Department if offering more than basic accommodations.
• The entire process typically takes 4 to 6 weeks from initial application to final approval, provided all requirements are met and inspections pass on the first attempt.
• Cookeville also requires STR operators to maintain a guest registry, limit occupancy to no more than 2 persons per bedroom plus 2 additional guests, provide 24/7 contact information to neighbors, and ensure quiet hours between 10 PM and 7 AM are enforced.

Short term rentals (STRs) are legal in Cookeville, Tennessee, but operate under specific regulations established by the city.

Core operating requirements

• As of 2023, Cookeville requires STR operators to obtain a business license and comply with zoning restrictions that primarily limit short term rentals to commercial and mixed use districts, while generally prohibiting them in residential neighborhoods zoned R 1 and R 2.
• The city implemented these regulations around 2021 to 2022 following concerns about neighborhood character and housing availability.
• STR properties must meet safety requirements including smoke detectors, fire extinguishers, and emergency contact information, and operators are required to maintain liability insurance.
• The city also enforces occupancy limits based on property size and requires designated parking spaces.
• Recent changes have included stricter enforcement of noise ordinances and requirements for local contact persons available 24/7 to address any issues.
• Properties operating as STRs before the regulations were grandfathered in but must still comply with safety and operational requirements.

The most promising Airbnb investment areas in Cookeville, Tennessee include the Historic Downtown District, which attracts visitors to Tennessee Tech University events, local festivals, and business travelers to the regional medical center; the Burgess Falls State Park vicinity, particularly neighborhoods within 10 to 15 minutes of the park. These areas benefit from Cookeville's position as a regional hub, the consistent demand from Tennessee Tech University activities, medical tourism to the regional hospital, outdoor recreation at multiple state parks, and the city's location along major transportation routes connecting Nashville, Knoxville.

In Cookeville, Tennessee, Airbnb properties are subject to both state and local lodging taxes.

Taxes and filing responsibilities

• The Tennessee state sales tax rate of 7% applies to short term rental accommodations, along with a state hotel occupancy tax of 3%, bringing the total state obligation to 10%.
• Cookeville imposes an additional local hotel/motel tax of 5%, making the combined tax rate approximately 15% on gross rental receipts.
• These taxes are collected from guests at the time of booking through Airbnb's automatic tax collection system for most jurisdictions.
• Remittance is typically required monthly or quarterly depending on volume, with returns due by the 20th of the following month.
• The state requires registration through the TNTAP system, while local registration may be required through Cookeville's business license department.
• Exemptions generally apply to stays exceeding 30 consecutive days, which are considered long term rentals in preference to transient accommodations, and certain government or charitable organization bookings may qualify for exemptions with proper documentation.

The total cost to start an Airbnb in Cookeville, Tennessee is approximately $185,000 to $220,000.

Cost breakdown

• Property purchase costs around $150,000 to $180,000 based on median home prices in the area as of 2023 to 2024.
• Furnishing a 2 to 3 bedroom property requires $8,000 to $12,000 for furniture, appliances, linens, and decor to create an attractive rental space.
• Initial setup costs including professional photography, listing creation, and basic renovations total $2,000 to $4,000.
• Permits and fees including business license, short term rental permit, and tax registration cost approximately $500 to $800.
• Insurance for short term rentals runs $1,200 to $2,000 annually, with the first year paid upfront.
• Utility deposits and setup fees for electricity, water, gas, internet, and cable total $800 to $1,200.
• First six months of operating costs including utilities ($600/month), cleaning supplies ($100/month), maintenance reserves ($200/month), property management software ($50/month), and marketing ($100/month) amount to approximately $6,300.
• Additional working capital of $3,000 to $5,000 should be reserved for unexpected repairs, guest refunds, and initial vacancy periods while building reviews and bookings.

Airbnb properties in Cookeville, Tennessee typically generate annual revenues between $15,000 to $35,000 for well positioned properties, with average daily rates ranging from $75 to $120 depending on property size and amenities.

Profitability indicators

• Operating expenses generally consume 40 to 60% of gross revenue, including cleaning fees ($25 to $40 per turnover), property management (10 to 20% of revenue), utilities ($150 to $300 monthly), insurance ($800 to $1,500 annually).
• Properties near Tennessee Tech University and downtown areas achieve higher occupancy rates of 60 to 75% annually, while those targeting outdoor enthusiasts visiting nearby Burgess Falls State Park or Cummins Falls typically see 45 to 65% occupancy.
• Successful operators like those managing properties on East Spring Street report net profit margins of 15 to 25% after all expenses, with properties featuring hot tubs, fire pits, or proximity to campus commanding premium rates.
• The market benefits from Cookeville's position as a regional hub and growing tourism to the Upper Cumberland region, though competition has increased significantly since 2020 with over 150 active listings in the area.
• Properties purchased specifically for Airbnb investment typically achieve 8 to 12% annual returns on investment, while owner occupied properties converting spare rooms see higher profit margins due to shared utility and maintenance costs.

Based on Cookeville, Tennessee market conditions, Airbnb investments typically generate annual ROI of 12 to 18% with cash on cash returns ranging from 8 to 15% depending on property type and location within the city. Properties near Tennessee Tech University and downtown areas command higher nightly rates of $80 to 120, while suburban properties average $60 to 90 per night with occupancy rates of 65 to 75% annually.

Return planning figures

• Initial investment recovery and profitability generally occurs within 18 to 24 months for well positioned properties, with total acquisition costs averaging $150,000 to 250,000 for suitable investment properties.
• The market benefits from consistent demand from university visitors, business travelers to local companies like ATC Automation and Averitt Express, and tourists accessing nearby Burgess Falls State Park.

STRSearch is a leading national platform that specializes in identifying profitable short term rental properties for Airbnb investors in Cookeville, Tennessee, offering comprehensive market analysis and property recommendations.

Companies and resources

• Local real estate agents in the Cookeville area who focus on investment properties include Coldwell Banker McMahan Co., RE/MAX Real Estate Professionals, and Crye Leike Realtors.
• National services that can assist Cookeville investors include Mashvisor for property analytics, AirDNA for market data and revenue projections, and Awning for full service Airbnb property management and acquisition assistance.
• BiggerPockets marketplace connects investors with local wholesalers and agents familiar with the Cookeville market, while companies like RedAwning and Vacasa provide property management services that can help evaluate potential acquisitions.
• Local property management companies such as Cookeville Property Management and Highland Rim Property Services offer insights into the rental market and may assist with identifying investment opportunities.