Is Dayton, Kentucky Good for Airbnb Investment?

To start an Airbnb in Dayton, Kentucky, begin by researching Campbell County and City of Dayton zoning regulations, as short-term rentals may require special permits or be restricted in certain residential zones - contact Dayton City Hall at (859) 491-7777 to verify current ordinances and obtain necessary business licenses, which typically cost $25-50 annually. Find a suitable property by searching areas near the Ohio River waterfront or historic downtown, with 2-3 bedroom homes ranging $80,000-150,000, ensuring the property meets fire safety codes and has adequate parking. Obtain required permits including a business license from Campbell County, potential zoning variance if needed, and ensure compliance with Kentucky Department of Revenue tax requirements for short-term rental income reporting. Furnish the property with quality basics including comfortable beds, linens, kitchen essentials, WiFi, and local guidebooks, budgeting $3,000-8,000 for initial furnishing depending on property size. Create your Airbnb listing with professional photos highlighting proximity to Cincinnati (just across the river), Newport Aquarium, and Northern Kentucky attractions, pricing competitively at $60-120 per night based on local market rates. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating key exchanges or installing smart locks, and maintaining the property to ensure positive reviews - consider hiring local cleaning services like those found through Campbell County business directories if managing remotely, and always maintain proper insurance coverage as standard homeowner's policies typically exclude short-term rental activities.

To identify profitable short-term rental properties in Dayton, Kentucky, focus on properties within 2-3 miles of the Ohio River waterfront and downtown Cincinnati access points, as proximity to major attractions like Newport Aquarium, Cincinnati's business district, and entertainment venues drives demand. Target 2-4 bedroom single-family homes or condos built after 1990 with modern amenities, parking, and outdoor spaces, as these typically command $80-150 per night compared to $50-80 for basic units. Analyze comparable STR pricing using AirDNA and Mashvisor, which show Dayton properties averaging 60-70% occupancy rates with seasonal peaks during summer months and Cincinnati Reds/Bengals games. Research competition by monitoring active Airbnb and VRBO listings within a 5-mile radius, noting that successful properties often differentiate through river views, proximity to Bellevue Beach Park, or unique amenities like hot tubs or game rooms. Utilize tools like Rabbu for market analysis, STR Helper for performance tracking, and connect with local property management companies like RedAwning or Vacasa who report strong performance for well-positioned Dayton properties, while ensuring compliance with Campbell County's STR regulations and maintaining relationships with local cleaning services and maintenance contractors to optimize operations.

To obtain an Airbnb/STR permit in Dayton, Kentucky, you must first contact the City of Dayton Planning and Zoning Department at City Hall located at 514 6th Avenue, as this small city in Campbell County requires a conditional use permit for short-term rentals in residential zones. Submit an application including a completed conditional use permit form, property deed or lease agreement, floor plan of the rental unit, parking plan showing adequate off-street parking, and a $150 application fee plus $75 public hearing fee. Required documents also include proof of liability insurance (minimum $1 million), fire safety inspection certificate from the local fire department, and a business license from Campbell County. The process typically takes 45-60 days including a mandatory public hearing before the Planning Commission, and Dayton specifically requires STRs to maintain residential character, provide one parking space per bedroom, limit occupancy to 2 people per bedroom plus 2 additional guests, prohibit rentals for less than 2 consecutive nights, and mandate that properties be owner-occupied or have a local property manager within 30 minutes response time. Annual renewal is required with a $50 fee, and all STRs must display the permit number in advertisements and maintain a guest registry available for city inspection.

Short-term rentals (STRs) are legal in Dayton, Kentucky, but operate under Campbell County's regulatory framework since Dayton is a small city that typically follows county-level zoning and rental regulations. Campbell County generally permits STRs in residential areas with basic requirements including business licensing, safety compliance, and tax registration with the Kentucky Department of Revenue for transient room tax collection. Properties must meet standard housing codes and fire safety requirements, and operators typically need to register with local authorities and maintain liability insurance. There are generally no specific prohibited zones for STRs in Dayton's residential areas, though commercial zoning may have different requirements. Recent changes in Kentucky since 2020-2022 have included increased state-level oversight of STR taxation and reporting requirements, with some municipalities implementing stricter noise ordinances and occupancy limits in response to neighbor complaints, though Dayton has maintained relatively permissive regulations compared to larger Kentucky cities like Louisville or Lexington.

The best areas for Airbnb investment in Dayton, Kentucky include the historic Bellevue neighborhood, which attracts tourists interested in 19th-century architecture and proximity to the Ohio River, generating steady bookings from heritage tourism and weekend getaways. The downtown Dayton district offers strong potential due to its walkable riverfront location and proximity to Cincinnati across the Ohio River, appealing to business travelers working in the Cincinnati metro area who prefer quieter, more affordable accommodations. The residential areas near Dayton Regional Park attract families and outdoor enthusiasts visiting for recreational activities, camping alternatives, and sports tournaments, particularly during spring and summer months. Properties within walking distance of the Purple People Bridge connecting to Newport, Kentucky benefit from foot traffic and tourists exploring the Northern Kentucky region, while areas near local marinas and boat launches cater to fishing enthusiasts and boating visitors during peak seasons from April through October.

Airbnb properties in Dayton, Kentucky are subject to Kentucky's state transient room tax of 1% on gross rental receipts, which applies to all short-term rental accommodations under 30 days. Campbell County, where Dayton is located, imposes an additional local occupancy tax of approximately 3% on transient lodging. The City of Dayton may also levy a local lodging tax of around 1-2%, though smaller municipalities sometimes rely solely on county taxes. These taxes are typically collected by Airbnb directly from guests at the time of booking through their automated tax collection system, which began operating in Kentucky around 2019, and the platform remits payments quarterly to the appropriate state and local tax authorities. Property owners who collect taxes independently must register with the Kentucky Department of Revenue and file monthly returns by the 20th of the following month, along with registering for any applicable local tax accounts with Campbell County and the City of Dayton. Exemptions generally apply to stays of 30 days or longer, which are considered long-term rentals rather than transient accommodations, and some jurisdictions may exempt stays by government employees on official business or certain nonprofit organizations, though documentation is typically required to claim such exemptions.

Starting an Airbnb in Dayton, 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 2023-2024. 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 vary but expect around $500-800 for business licenses and short-term rental permits if required by local ordinances. Insurance premiums for short-term rental coverage typically cost $1,200-1,800 annually, with the first year paid upfront. Utility setup and deposits for electricity, water, gas, internet, and cable run approximately $800-1,200. First six months of operating costs including utilities ($150-200/month), cleaning supplies and services ($100-150/month), maintenance reserves ($100-200/month), platform fees, and marketing total roughly $3,000-4,500. Additional considerations include property taxes, HOA fees if applicable, and a cash reserve for unexpected repairs or vacancy periods.

Airbnb properties in Dayton, Kentucky show moderate profitability potential with average nightly rates ranging from $75-120 depending on property size and amenities. A typical 2-bedroom property generates approximately $1,800-2,400 monthly revenue with occupancy rates around 65-70%, while expenses including mortgage, utilities, cleaning fees, maintenance, and Airbnb's 3% host fee total roughly $1,200-1,600 monthly, resulting in net profit margins of 25-35%. Success factors in this market include proximity to Louisville attractions (30 minutes away), competitive pricing below urban rates, and targeting business travelers and families visiting the region. Properties near Fort Knox military base perform particularly well with consistent bookings from military families and contractors. A case study of a renovated 3-bedroom home purchased for $180,000 in 2022 shows annual gross revenue of $28,000 with operating expenses of $18,000, yielding a 5.6% cash-on-cash return after debt service. The market benefits from lower property acquisition costs compared to Louisville while capturing overflow demand, though hosts must account for higher marketing efforts due to the smaller tourist base and seasonal fluctuations during winter months when occupancy can drop to 45-50%.

Airbnb investments in Dayton, Kentucky can expect annual ROI of 8-12% based on the area's proximity to Louisville and growing tourism market, with cash-on-cash returns typically ranging from 6-10% depending on property acquisition costs and financing structure. Properties in Dayton generally achieve profitability within 18-24 months, benefiting from the city's location along the Ohio River and its appeal to visitors exploring the greater Cincinnati-Louisville corridor. The market shows steady demand from business travelers and tourists visiting nearby attractions, with average daily rates of $85-120 and occupancy rates of 65-75% annually. Initial investment costs are relatively moderate compared to larger metropolitan areas, with typical single-family homes suitable for short-term rentals ranging from $150,000-250,000, allowing investors to achieve positive cash flow within the first year of operation when properties are well-managed and strategically marketed to capture both leisure and business travel segments.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Dayton, Kentucky. Local real estate agents specializing in investment properties include Coldwell Banker McMahan and RE/MAX Premier Properties, both with agents experienced in vacation rental acquisitions in the greater Louisville metropolitan area. BiggerPockets connects investors with local wholesalers and investment-focused agents throughout Kentucky, while Roofstock and Awning offer turnkey Airbnb properties and management services in secondary markets like Dayton. RedAwning provides property management and optimization services for short-term rentals, and AirDNA offers market analytics for the Louisville-Jefferson County region. Local property management companies such as Kentucky Lake Vacation Rentals and Bluegrass Property Management have expanded services to include Airbnb optimization, while national platforms like Vacasa and AvantStay provide full-service management for investors purchasing properties in emerging Kentucky markets including Dayton since 2019-2021.