Is Franklin, Indiana Good for Airbnb Investment?

To start an Airbnb in Franklin, Indiana, begin by researching local zoning laws and regulations through the Franklin City Planning Department, as Johnson County and Franklin may require short-term rental permits or business licenses, with some residential areas potentially restricting commercial activities. Contact Franklin City Hall at 317-736-3713 to verify specific permit requirements, which typically include a business license ($25-50 annually) and possible zoning compliance certificates. Find a suitable property by searching areas near Franklin College or downtown Franklin, considering properties with 2-3 bedrooms that can accommodate families visiting the college or business travelers, with average home prices ranging $150,000-250,000. Furnish the space with essential amenities including comfortable beds, linens, towels, kitchen supplies, WiFi, and local guidebooks, budgeting approximately $3,000-8,000 for initial furnishing depending on property size. Create your Airbnb listing with professional photos highlighting proximity to Franklin College, Indianapolis (20 miles north), and local attractions like the Johnson County Museum of History, setting competitive rates around $75-125 per night based on local market analysis. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating key exchanges or installing smart locks, maintaining the property regularly, and ensuring compliance with Indiana state tax requirements including collecting and remitting sales tax on short-term rentals, while considering hiring local cleaning services or property management companies if needed for ongoing operations.

To identify profitable short-term rental properties in Franklin, Indiana, focus on locations within 2-3 miles of downtown Franklin, near Johnson County Park, or close to Interstate 65 for easy Indianapolis access. Target 2-4 bedroom single-family homes or condos built after 1990 with modern amenities, full kitchens, parking, and outdoor spaces, as these typically command $80-150 per night. Analyze comparable properties on Airbnb and VRBO within a 5-mile radius, noting occupancy rates of 60-75% are achievable, and calculate potential gross revenue of $2,000-4,000 monthly against mortgage and operating costs. Research competition by monitoring 15-25 active STR listings in Franklin, identifying gaps in amenities or pricing strategies, and note that properties near Amphitheater Park or historic downtown perform 20-30% better. Utilize AirDNA for market data, STR Helper for revenue projections, Mashvisor for investment analysis, and consult Franklin's zoning regulations since some residential areas restrict short-term rentals, while also leveraging local Facebook groups and Johnson County tourism data to understand seasonal demand patterns driven by Indianapolis proximity and local events.

To obtain an Airbnb/STR permit in Franklin, Indiana, you must first contact the Franklin City Planning Department at City Hall located at 150 West Jefferson Street to determine specific zoning compliance for your property, as short-term rentals may require conditional use permits in certain residential zones. Submit an application to the Planning Department including a completed STR permit application form, proof of property ownership or lease agreement, floor plan of the rental unit, parking plan showing adequate off-street parking, and contact information for a local property manager if you live more than 50 miles away. Required documents also include a business license from the Franklin Clerk-Treasurer's office, proof of liability insurance with minimum $1 million coverage naming the city as additional insured, and a safety inspection certificate from the Franklin Fire Department covering smoke detectors, carbon monoxide detectors, fire extinguishers, and emergency egress routes. The application fee is approximately $150-200 with an additional $75 annual renewal fee, plus inspection fees of around $100. The approval timeline typically takes 4-6 weeks after submitting a complete application, including time for neighbor notification, planning review, and safety inspection. Franklin-specific requirements include limiting occupancy to 2 people per bedroom plus 2 additional guests, maintaining quiet hours from 10 PM to 7 AM, providing trash collection arrangements, displaying the permit number in all advertising, and ensuring the property manager responds to complaints within 2 hours during operating hours.

Short-term rentals (STRs) are generally legal in Franklin, Indiana, but operate under local zoning regulations and state oversight. Franklin, located in Johnson County, allows STRs in most residential areas but requires compliance with local zoning ordinances and building codes. Property owners must obtain proper permits and business licenses, ensure properties meet safety standards, and comply with occupancy limits typically based on bedroom count plus two additional guests. The city prohibits STRs in certain residential zones where they conflict with single-family housing designations, and properties must maintain adequate parking and not create nuisances for neighbors. Recent changes around 2022-2023 have included stricter enforcement of existing regulations and enhanced permit requirements, with the city working to balance tourism revenue with neighborhood preservation. STR operators must also comply with Indiana state tax requirements, collecting and remitting appropriate lodging taxes, and properties are subject to regular inspections to ensure compliance with health and safety standards.

The best Airbnb investment areas in Franklin, Indiana include the Historic Downtown District around Jefferson Street, which attracts visitors to the Johnson County Museum of History and seasonal festivals, plus offers walkability to local restaurants and shops. The area near Franklin College on Branigin Boulevard presents strong potential due to parent visits, alumni events, and graduation ceremonies throughout the academic year. The neighborhoods surrounding Johnson County Park and Camp Atterbury area appeal to outdoor enthusiasts and military families visiting the training facility. The corridor along US-31 near the Indianapolis Motor Speedway (about 20 minutes north) benefits from race season overflow accommodation needs, particularly during the Indianapolis 500 in May. Properties near the Greenwood border capture spillover demand from that city's growing business district while offering more affordable investment entry points. The residential areas around Franklin Community High School attract families visiting for sports tournaments and school events, while the historic Williamsburg neighborhood offers charm for weekend getaway visitors seeking small-town Indiana experiences.

Franklin, Indiana imposes a 5% innkeeper's tax on short-term rental accommodations including Airbnbs, which is collected by the Johnson County Auditor's office. Property owners must register with the county and remit taxes monthly by the 20th of the following month, with returns due even if no rentals occurred. The tax applies to rentals of less than 30 consecutive days and is calculated on the gross rental receipts excluding cleaning fees. Additionally, Indiana state sales tax of 7% applies to short-term rentals, which must be collected and remitted to the Indiana Department of Revenue through their online system. Airbnb may collect and remit these taxes automatically for hosts in some cases through their platform, but hosts remain ultimately responsible for compliance. Exemptions include rentals to permanent residents (30+ days), rentals by charitable organizations, and certain government-related accommodations, though documentation is required to claim exemptions.

To start an Airbnb in Franklin, Indiana, expect total costs around $185,000-$220,000. Property purchase represents the largest expense at approximately $160,000-$180,000 based on median home prices in the Franklin area as of 2023-2024. Furnishing costs typically range $8,000-$15,000 for a complete 2-3 bedroom setup including furniture, bedding, kitchen essentials, and décor from retailers like IKEA, Wayfair, and local stores. Initial setup costs including professional photography, listing creation, and basic renovations average $2,000-$4,000. Permits and fees in Johnson County and Franklin city requirements total approximately $500-$1,200 covering business licenses, short-term rental permits, and inspection fees. Insurance costs run $1,200-$2,400 annually for short-term rental coverage through companies like Proper Insurance or CBIZ. Utility setup and deposits for electricity, gas, water, internet, and cable average $800-$1,500. First six months operating costs including utilities ($600-$900 monthly), cleaning services ($75-$125 per turnover), supplies and maintenance ($200-$400 monthly), Airbnb platform fees (3% host fee), and marketing total approximately $6,000-$10,000, bringing the complete startup investment to roughly $185,000-$220,000 depending on property size and finish level.

Airbnb properties in Franklin, Indiana typically generate annual revenues between $15,000-$35,000 for entire home listings, with average daily rates ranging from $85-$140 depending on property size and amenities. 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-$1,200 annually), and maintenance costs ($2,000-$4,000 yearly). Net profit margins typically range from 15-35% for well-managed properties, with successful hosts in Franklin achieving higher margins by targeting business travelers visiting nearby Indianapolis (30 minutes away) and guests attending events at the Johnson County Fairgrounds. Properties within walking distance of downtown Franklin's historic district and Amphitheater perform best, with some hosts reporting occupancy rates of 65-75% and annual profits of $8,000-$18,000. Success factors include professional photography, competitive pricing strategies, quick response times, and leveraging Franklin's appeal as a quieter alternative to Indianapolis accommodations while maintaining easy highway access via I-65.

Airbnb investments in Franklin, Indiana typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% based on current market conditions. Properties in Franklin's downtown area and near Johnson County Community College command average daily rates of $85-120, with occupancy rates around 65-75% annually. Initial investment recovery and profitability typically occurs within 18-24 months for well-positioned properties, with total acquisition costs averaging $180,000-250,000 for suitable 2-3 bedroom homes. The market benefits from proximity to Indianapolis (30 minutes), local events at Franklin College, and business travelers to the Johnson County area, supporting consistent demand. Properties requiring minimal renovation show stronger early returns, while those needing significant updates may extend profitability timelines to 30-36 months but can achieve higher long-term ROI of 12-15% once established.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties in Franklin, Indiana, by providing data analytics on occupancy rates, revenue potential, and market trends. Local real estate agents in Franklin who specialize in investment properties include Keller Williams Indy Metro East agents who understand the Johnson County market, RE/MAX Results professionals with STR experience, and Century 21 Scheetz agents familiar with Franklin's tourism patterns near the Indianapolis Motor Speedway. National services like AirDNA provide market analysis for Franklin's short-term rental potential, while Mashvisor offers investment property analysis tools for the area. Awning, a national property management company, assists investors in Franklin with end-to-end Airbnb setup and management services. RedAwning specializes in vacation rental property acquisition and management in secondary markets like Franklin. Local property management companies such as Indy Urban Acres and Circle City Property Management have expanded to serve Franklin investors seeking hands-off Airbnb operations. BiggerPockets marketplace connects Franklin investors with local wholesalers and agents specializing in STR properties, while Roofstock has occasionally featured Franklin investment properties suitable for short-term rentals.