Is Hazel, Kentucky Good for Airbnb Investment?

To start an Airbnb in Hazel, Kentucky, begin by researching local regulations through Calloway County and the City of Hazel offices, as this small town near the Tennessee border may have specific zoning requirements for short-term rentals, though regulations are typically less restrictive than larger cities. Obtain necessary permits including a business license from Calloway County ($25-50 annually), ensure your property meets fire safety codes, and verify homeowner's insurance covers short-term rentals or purchase additional coverage through companies like Proper Insurance or CBIZ. Find a suitable property by focusing on homes near Kentucky Lake, Land Between the Lakes, or historic downtown areas that attract tourists visiting Murray State University (15 minutes away) or outdoor recreation areas, with average property prices ranging $80,000-150,000 for suitable homes. Furnish the space with essential amenities including quality bedding, kitchen supplies, WiFi, and local touches highlighting Kentucky's heritage, budgeting $5,000-15,000 for complete furnishing depending on property size. List your property on Airbnb with professional photos showcasing proximity to Kentucky Lake recreation, competitive pricing around $75-125 per night based on local market rates, and highlight unique features like lake access or historic charm. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating with local cleaning services in Murray or Hazel, and maintaining the property to meet guest expectations while building positive reviews to increase bookings in this rural tourism market.

To identify profitable short-term rental properties in Hazel, Kentucky, focus on properties within 2-3 miles of Kentucky Lake and Land Between the Lakes National Recreation Area, as these locations drive the majority of tourism demand in this small western Kentucky town. Target 2-4 bedroom homes or cabins with lake views, outdoor amenities like fire pits or hot tubs, and adequate parking for boats or trailers, as fishing and water recreation are primary draw factors. Pricing analysis should benchmark against similar properties in nearby Murray (15 miles) and Paris Landing, Tennessee, with seasonal rates ranging from $80-150 per night during peak summer and fall months, adjusting 20-30% lower during winter. Competition research reveals limited STR inventory in Hazel proper, creating opportunity, but monitor listings in the broader Calloway County area using AirDNA, Mashvisor, or STR analytics platforms to assess occupancy rates and revenue potential. Utilize local resources like the Murray-Calloway County Chamber of Commerce for tourism data, Kentucky Lake tourism websites for seasonal trends, and connect with local property management companies familiar with the lake rental market to understand operational requirements and guest expectations specific to this outdoor recreation-focused destination.

To obtain an Airbnb/STR permit in Hazel, Kentucky, you'll need to contact the Hazel City Hall at 405 3rd Street or call (270) 492-8872 to inquire about short-term rental regulations, as this small city may not have established formal STR permitting processes yet. If permits are required, you'll likely need to submit a business license application, provide proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental unit, and contact information for a local property manager if you're not residing locally. The application fee would typically range from $50-200 annually, with additional business license fees of approximately $25-100. You'll also need to register with the Kentucky Department of Revenue for state tax collection and remit local occupancy taxes to Calloway County. The approval timeline would likely be 2-4 weeks after submitting complete documentation. Since Hazel is a small municipality, you may also need to comply with Calloway County zoning requirements and ensure the property meets basic safety standards including smoke detectors, carbon monoxide detectors, and fire extinguishers. Contact the city clerk first to determine current requirements, as regulations for short-term rentals in smaller Kentucky cities are often still being developed or may fall under general business licensing procedures.

Short-term rentals (STRs) in Hazel, Kentucky are generally legal but subject to local regulations and zoning restrictions. As a small city in Calloway County near the Tennessee border, Hazel likely follows Kentucky state law which allows STRs but permits local municipalities to impose their own rules. The city may require business licenses, occupancy permits, and compliance with zoning ordinances that could restrict STRs in certain residential areas. Property owners typically must collect and remit state and local taxes, maintain safety standards, and may face limitations on the number of guests or parking requirements. Recent trends in Kentucky have seen increased regulation at the municipal level, with some cities implementing registration requirements and noise ordinances. Hazel's proximity to Kentucky Lake and tourism areas may influence more permissive policies, but property owners should verify current local ordinances with the city clerk's office as regulations can change and enforcement varies by neighborhood zoning classifications.

The best areas for Airbnb investment in Hazel, Kentucky are primarily concentrated around the downtown historic district near Main Street, which attracts visitors interested in small-town charm and antique shopping, and properties within a 2-3 mile radius of Kentucky Lake's eastern shores, capitalizing on the significant fishing, boating, and water recreation tourism that peaks from April through October. The area near the Tennessee state line (Hazel borders Tennessee) offers strategic positioning for guests visiting both states, particularly those attending events at nearby Murray State University (approximately 15 miles north) or exploring the Land Between the Lakes National Recreation Area. Properties along Highway 641 provide excellent accessibility for business travelers and tourists heading to Reelfoot Lake or other regional attractions, while homes near the Hazel Community Center and local parks appeal to family reunions and small group gatherings. The residential areas within walking distance of local restaurants and the few remaining historic buildings offer authentic rural Kentucky experiences that urban visitors seek, particularly during fall foliage season and local festivals.

In Hazel, Kentucky, Airbnb properties are subject to Kentucky's 6% state sales tax on transient accommodations, which applies to rentals of less than 30 consecutive days, and this tax is typically collected by Airbnb directly from guests and remitted to the Kentucky Department of Revenue on behalf of hosts through their automated tax collection system that began around 2019. Additionally, Calloway County may impose a local transient room tax of approximately 3%, though collection and remittance procedures for this county-level tax may require hosts to register directly with local authorities and file monthly or quarterly returns depending on revenue thresholds. The City of Hazel itself does not appear to have a separate municipal lodging tax as of recent years, but hosts should verify current local ordinances as small municipalities can implement such taxes. Properties rented for 30 days or longer are generally exempt from transient accommodation taxes, and some jurisdictions may provide exemptions for stays related to medical treatment or government business, though documentation requirements apply for claiming such exemptions.

To start an Airbnb in Hazel, Kentucky, the total estimated costs would be approximately $185,000-$220,000. Property purchase costs around $120,000-$150,000 based on median home prices in rural Kentucky markets near the Tennessee border. Furnishing a 2-3 bedroom property would cost $15,000-$25,000 including furniture, appliances, linens, and decor from retailers like IKEA, Wayfair, and local stores. Initial setup costs including professional photography, listing creation, and marketing materials would be $1,500-$3,000. Permits and fees including business license, short-term rental permits, and potential zoning approvals would cost $500-$1,500 depending on local Calloway County regulations. Insurance including landlord coverage and short-term rental protection would cost $2,000-$3,500 annually. Utility setup and deposits for electricity, water, internet, and cable would be $500-$1,000. First six months operating costs including utilities ($1,800), cleaning services ($2,400), maintenance ($1,500), property management software ($300), and marketing ($1,000) would total approximately $7,000. Additional considerations include potential HOA fees, property taxes, and emergency repair funds which could add another $5,000-$10,000 to initial costs.

Airbnb properties in Hazel, Kentucky, a small town near Kentucky Lake, typically generate modest returns with average daily rates ranging from $75-120 depending on proximity to the lake and property amenities. Properties within walking distance of Kentucky Lake or with lake views command premium rates of $100-150 per night, achieving 40-60% occupancy rates during peak season (May-September), generating annual revenues of $15,000-35,000. Operating expenses including cleaning fees ($40-60 per turnover), utilities ($150-250 monthly), property management (15-25% of revenue), insurance ($1,200-2,000 annually), and maintenance typically consume 50-65% of gross revenue. Successful properties like lakefront cabins owned by Kentucky Lake Vacation Rentals have achieved 18-25% net profit margins by focusing on fishing and boating amenities, while properties further from water attractions struggle with 35-45% occupancy rates and 8-15% margins. Key success factors include professional photography showcasing lake access, partnerships with local fishing guides, providing boat slips or lake equipment, and maintaining consistent 4.8+ star ratings through responsive communication and immaculate cleanliness standards that appeal to the area's primary demographic of fishing enthusiasts and lake recreation visitors.

Airbnb investments in Hazel, Kentucky typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, based on the area's proximity to Kentucky Lake recreational activities and moderate property acquisition costs averaging $80,000-$120,000 for suitable rental properties. Properties generally reach profitability within 18-24 months, with seasonal occupancy rates peaking at 65-75% during summer months when lake tourism drives demand, while off-season rates drop to 25-35% occupancy. The market benefits from limited local competition and strong demand from fishing enthusiasts and family vacationers, with average daily rates of $85-$125 depending on property size and lake proximity. Investment properties typically require initial renovations of $15,000-$25,000 to meet vacation rental standards, but the combination of affordable entry costs and steady tourism traffic from nearby Land Between the Lakes National Recreation Area supports consistent returns for investors willing to manage seasonal fluctuations in booking demand.

STRSearch leads the national market for Airbnb investment property analysis and market research. In Hazel, Kentucky, local real estate agents like those at Coldwell Banker Heritage Group and RE/MAX Realty Group have experience with short-term rental properties in the area. Realty of America and Crye-Leike Realty Services also serve the western Kentucky market including Hazel. National services include AirDNA for market analytics (founded 2015), Mashvisor for investment property analysis, and RedAwning for vacation rental market insights. Local property management companies like Vacasa and national firms such as AvantStay help investors manage their Airbnb properties once purchased. Real estate investment groups in nearby Murray and Paducah, including Kentucky Lake Properties and Lake Realty, often work with investors seeking vacation rental opportunities in the Kentucky Lake region where Hazel is located.