Is Evansville, Indiana Good for Airbnb Investment?

To start an Airbnb in Evansville, Indiana, begin by researching local zoning laws and regulations through the Evansville Planning Department, as the city requires short-term rental operators to obtain a business license and comply with residential zoning restrictions that may limit rentals in certain neighborhoods. Contact the Vanderburgh County Health Department to understand any health and safety requirements, and check with the Indiana Department of Revenue for state tax obligations including the 7% state sales tax on short-term rentals. Find a suitable property by analyzing Evansville's popular areas like the Historic District, Downtown, or near the University of Southern Indiana, ensuring the property allows short-term rentals per HOA or lease agreements. Apply for necessary permits including a City of Evansville business license (approximately $25-50 annually), register with the Indiana Department of Revenue for tax collection, and ensure compliance with fire safety codes which may require smoke detectors, carbon monoxide detectors, and fire extinguishers. Furnish the property with quality furniture, linens, kitchen essentials, and amenities that appeal to business travelers visiting Toyota, Berry Global, or Alcoa, as well as tourists exploring the Ohio River waterfront. Create compelling listings on Airbnb, VRBO, and Booking.com with professional photos highlighting Evansville's proximity to attractions like Mesker Park Zoo and the Ford Center, setting competitive rates based on local market analysis showing average nightly rates of $75-120. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating check-ins/check-outs, maintaining the property, and keeping detailed records for tax purposes while collecting and remitting the required local and state taxes quarterly.

To identify profitable short-term rental properties in Evansville, Indiana, focus on locations within 2-3 miles of the University of Evansville, downtown entertainment district near the Ford Center, and riverfront areas along the Ohio River, as these attract business travelers, university visitors, and tourists. Target 2-4 bedroom properties built after 1980 with modern amenities, parking, and outdoor spaces, particularly in neighborhoods like Newburgh, East Side, and areas near Mesker Park Zoo. Conduct pricing analysis using AirDNA and Mashvisor to identify properties where potential STR revenue (typically $80-150/night in Evansville) exceeds long-term rental income by 40-60%, while keeping acquisition costs under $150,000 for optimal ROI. Research competition on Airbnb and VRBO within a 3-mile radius, noting occupancy rates average 60-70% annually, with peak demand during university events, Thunderbolts hockey season, and summer river activities. Utilize local resources including the Evansville Convention & Visitors Bureau for event calendars, Vanderburgh County property records for ownership history, local real estate agents familiar with investment properties, and Facebook groups like "Evansville Real Estate Investors" for market insights, while ensuring compliance with city zoning regulations that currently allow STRs in most residential areas with proper registration.

To obtain an Airbnb/STR permit in Evansville, Indiana, you must first contact the Evansville Planning and Development Department at 1 NW Martin Luther King Jr Blvd to determine zoning compliance, as short-term rentals are typically restricted to certain residential zones with conditional use permits required in most areas. Submit an application to the Building Commissioner's Office including a completed short-term rental registration form, proof of property ownership or lease agreement, floor plan showing maximum occupancy, certificate of insurance with minimum $1 million liability coverage naming the City of Evansville as additional insured, fire safety inspection certificate from the Evansville Fire Department, and business license from the City Clerk's office. Required fees include approximately $150 for the business license, $200-400 for conditional use permit (if required), $100 for fire inspection, and $75 annual registration fee. The process typically takes 4-6 weeks including zoning review, fire inspection scheduling, and permit approval. Evansville requires STRs to maintain off-street parking for each rental unit, limit occupancy to 2 persons per bedroom plus 2 additional guests, display permit numbers in all advertisements, maintain 24/7 local contact information, and comply with noise ordinances with quiet hours from 10 PM to 7 AM, while properties in historic districts may face additional architectural review requirements.

Short-term rentals (STRs) are legal in Evansville, Indiana, but operate under specific regulations established by the city. As of 2023, Evansville 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 historic neighborhoods and areas zoned for single-family use only. Properties must meet safety requirements including smoke detectors, carbon monoxide detectors, and fire extinguishers, and operators must provide contact information to neighbors and the city for complaint purposes. The city implemented a registration system around 2022 that requires annual renewal and limits the number of guests based on property size and parking availability. Recent changes have included stricter enforcement of noise ordinances and parking requirements, with violations potentially resulting in license revocation. STRs are prohibited in areas within 300 feet of schools and in certain historic districts where the city has determined they would be incompatible with neighborhood character, and operators must collect and remit local occupancy taxes to the city.

The best Airbnb investment areas in Evansville, Indiana include the Historic Riverside District near downtown, which attracts business travelers visiting the Ford Center, Victory Theatre, and corporate headquarters like Berry Global and Old National Bank, plus tourists exploring the riverfront casino and entertainment venues. The Haynie's Corner Arts District offers strong potential due to its walkable entertainment scene, local breweries, restaurants, and proximity to the University of Evansville, drawing both leisure visitors and families visiting students. The West Side/Lincoln Avenue corridor is attractive for its historic charm and accessibility to major employers like Deaconess Health System and Toyota Motor Manufacturing Indiana (opened 2019), generating consistent business travel demand. The Newburgh area, technically outside Evansville but within the metro, provides upscale accommodations for visitors to Angel Mounds State Historic Site and families attending events at the nearby country clubs, while the East Side near the Lloyd Expressway offers convenient access for travelers visiting Mesker Park Zoo, sports tournaments at various facilities, and corporate visitors to companies like Accuride Corporation and Shoe Carnival headquarters.

In Evansville, Indiana, Airbnb hosts are subject to both state and local lodging taxes. The Indiana state innkeeper's tax is 7% on gross rental receipts for stays less than 30 days, which Airbnb typically collects and remits directly to the state on behalf of hosts. Additionally, Evansville imposes a local innkeeper's tax of 6% on short-term rental accommodations, bringing the total lodging tax to 13%. The local tax is collected by Airbnb through their automated tax collection system and remitted to Vanderburgh County monthly. Hosts must register with the Indiana Department of Revenue and obtain a registered retail merchant certificate if they plan to collect taxes independently. Properties rented for 30 days or longer are generally exempt from these lodging taxes, as are rentals to permanent residents. The city also requires short-term rental operators to obtain a business license and comply with zoning regulations, though this doesn't directly affect tax obligations. All taxes are calculated on the gross rental amount excluding cleaning fees and other separately stated charges, and hosts who don't use Airbnb's collection service must file monthly returns with both state and local tax authorities.

Starting an Airbnb in Evansville, Indiana requires approximately $180,000-220,000 in total initial investment. Property purchase costs average $140,000-160,000 based on median home prices in the area as of 2023-2024. Furnishing a 2-3 bedroom property typically runs $15,000-25,000 including furniture, appliances, linens, and décor to create an attractive rental space. Initial setup costs including professional photography, listing creation, and basic renovations total around $3,000-5,000. Permits and fees vary but expect $500-1,500 for business licenses, short-term rental permits, and city registration requirements. Insurance specifically for short-term rentals costs approximately $2,000-3,000 annually, significantly higher than standard homeowner's insurance. Utility setup and deposits for electricity, gas, water, internet, and cable run about $500-800 initially. First six months of operating costs including utilities ($300-500/month), cleaning services ($75-100 per turnover), maintenance reserves ($200-400/month), platform fees (3% of bookings), and property management if outsourced (20-30% of revenue) total approximately $8,000-15,000 depending on occupancy rates and seasonal demand in the Evansville market.

Airbnb properties in Evansville, Indiana typically generate annual revenues between $15,000-$35,000 for entire homes and $8,000-$18,000 for private rooms, with average daily rates ranging from $65-$120 depending on property type and location proximity to the University of Evansville and downtown area. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($25-$40 per turnover), utilities ($150-$250 monthly), property management (10-20% of revenue), insurance ($800-$1,500 annually), and maintenance costs ($2,000-$4,000 yearly). Properties near the Ford Center and downtown entertainment district achieve higher occupancy rates of 60-75% compared to suburban locations at 45-60%, with successful hosts reporting net profit margins of 15-25% after all expenses. Key success factors include professional photography, competitive pricing during University of Evansville events and Thunderbolts hockey games, maintaining 4.8+ star ratings through consistent cleanliness and communication, and offering amenities like high-speed internet and parking. Properties within 2 miles of downtown Evansville or the university campus typically outperform suburban listings by 20-30% in both occupancy and revenue, with some hosts reporting annual net profits of $8,000-$12,000 on well-managed properties after accounting for mortgage payments, taxes, and all operational expenses.

Airbnb investments in Evansville, Indiana typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% based on current market conditions. Properties near the University of Evansville and downtown entertainment district show stronger performance, with average daily rates of $85-120 and occupancy rates of 65-75% annually. Initial investment recovery and profitability generally occurs within 18-24 months, assuming a 20-25% down payment on properties valued between $80,000-150,000. The market benefits from steady demand from business travelers visiting Toyota, Alcoa, and other major employers, plus university visitors and tourists exploring the Ohio River region. Properties requiring minimal renovation in established neighborhoods like Haynie's Corner and Riverside typically achieve the higher end of ROI projections, while those needing significant updates may see returns closer to 6-8% in the first two years before reaching optimal performance.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors in Evansville, Indiana. Local real estate agents like those at F.C. Tucker Emge Realtors and Keller Williams Realty have experience with investment properties in the Evansville market. National services include Mashvisor, which provides Airbnb analytics and property recommendations, AirDNA for market data analysis, and Awning for turnkey Airbnb investment properties. Local property management companies such as Tri-State Property Management and River City Property Solutions can assist with ongoing operations. BiggerPockets marketplace connects investors with local professionals, while Roofstock and Arrived Homes offer online platforms for purchasing rental properties. Regional investment groups like Indiana Real Estate Investors Association provide networking and education opportunities. Local mortgage brokers specializing in investment properties include First Federal Savings Bank and German American Bank, both familiar with the Evansville market dynamics and short-term rental financing options.