Is Hazel, Kentucky Good for Airbnb Investment?

Potentially—Hazel, Kentucky combines visitor demand with long-term real estate upside.

• Presents a niche opportunity that warrants careful consideration of the local market dynamics.
• Hazel, a small town known for its antique shops and charming, rural atmosphere, primarily attracts visitors seeking a quiet escape and unique shopping experiences.
• This specific appeal limits the broader tourism trends seen in larger, more diverse destinations, meaning short-term rental demand is likely to be more consistent but at a smaller scale.
• Property values in Hazel tend to be significantly lower than in urban or more prominent tourist areas.
• However, the limited pool of visitors means that while investment potential exists, it may be more modest and less dynamic than in high-traffic tourist hubs.
• Success in Hazel would depend heavily on effectively targeting the specific demographic interested in its unique offerings and managing expectations regarding rental income and growth.

$800–$2,200, based on location, season, and property quality.

• Based on available market data and regional analysis, Airbnb properties in Hazel, Kentucky typically generate average monthly revenues ranging from $800 to $2,200, with most hosts earning between $1,200 to $1,800 per month depending on property size and amenities.
• Seasonal variations show peak earnings during spring and fall months when outdoor activities and mild weather attract visitors to the Kentucky Lake region.
• Summer months also perform well due to lake tourism, while January through March represent the lowest earning period with revenues dropping 20-30% below annual averages.
• Key factors affecting earnings include proximity to Kentucky Lake (properties within 2 miles command 15-25% higher rates), property size (3+ bedroom homes outperform smaller units by 30-50%).
• The small-town location benefits from lower competition compared to larger cities, but hosts must account for seasonal demand fluctuations and the rural setting's impact on year-round bookings.
• Market data suggests occupancy rates average 55-70% annually, with nightly rates typically ranging from $75-150 depending on property features and season.

Potentially strong—typical annual ROI is 8–12%.

• Typically generate ROI between 8-12% annually, with payback periods averaging 10-12 years due to the small market size and limited tourist demand in this rural community near the Tennessee border.
• Properties averaging $80,000-120,000 can expect gross rental income of $8,000-15,000 annually, though occupancy rates remain modest at 35-45% given Hazel's population of approximately 400 residents and minimal commercial attractions.
• Compared to traditional long-term rentals yielding 6-8% ROI in the area, short-term rentals offer marginally better returns but require significantly more management effort and face seasonal fluctuations.
• The limited local rental market and distance from major tourist destinations like Land Between the Lakes make Hazel a challenging market for Airbnb investments, with success heavily dependent on property condition.

Hazel, Kentucky averages 45–55% annual occupancy, with seasonal variation.

• Airbnb occupancy rates in Hazel, Kentucky typically average around 45-55% annually, with significant seasonal variation that peaks during spring and fall months (March-May and September-November) when occupancy can reach 65-75% due to favorable weather and outdoor recreation activities around Kentucky Lake and Land Between the Lakes National Recreation Area.
• Summer months see moderate occupancy of 55-65% driven by lake tourism and family vacations, while winter months drop to 25-35% occupancy due to reduced tourism activity.
• Hazel's occupancy rates generally underperform compared to Kentucky's statewide Airbnb average of approximately 60-65% and the national average of 63-68%, primarily due to its small market size.

The strongest opportunities balance visitor demand, nightly rates, and acquisition cost.

• The downtown Hazel area offers the best Airbnb investment potential due to its historic charm and walkability to local antique shops and restaurants.
• The residential streets near Kentucky Lake provide excellent opportunities for vacation rentals targeting fishing and boating enthusiasts.
• The neighborhoods along Highway 641 benefit from high visibility and easy access for travelers, making them ideal for business travelers and those passing through to Tennessee attractions.
• Properties near Hazel Community Center attract families and groups seeking event accommodations, with strong weekend booking potential and moderate competition.
• The quiet residential areas on the east side of town offer affordable entry points for investors, with lower property costs allowing for better cash-on-cash returns despite slightly lower nightly rates.
• Neighborhoods close to the Tennessee state line capitalize on cross-border appeal, attracting guests who want small-town Kentucky charm while remaining close to Tennessee attractions and amenities.

Yes, but only where zoning permits short-term rentals and every required license is current.

• Short-term rental regulations in Hazel, Kentucky are primarily governed by state and local zoning ordinances.
• Property owners typically need to comply with basic business licensing requirements through the city clerk's office and ensure their rental properties meet standard residential building codes and safety standards.
• Occupancy limits generally follow the "2+1 rule" (two people per bedroom plus one additional person).
• Hazel does not currently require owner-occupancy for short-term rentals, allowing both resident and non-resident property owners to operate STRs.
• Zoning restrictions typically limit short-term rentals to residential zones, with some potential restrictions in certain historic or residential-only districts.
• The registration process involves obtaining a general business license from the city and ensuring compliance with Kentucky state tax requirements.

Tax rates vary by jurisdiction; licensing, inspection, and insurance costs are additional.

• Short-term rentals in Hazel, Kentucky are subject to Kentucky's 6% state sales tax and 1% state transient room tax, totaling 7% on rental income.
• Calloway County may impose an additional 3% transient room tax, bringing the total lodging tax to approximately 10%.
• Property owners must register their rental business with the Kentucky Department of Revenue for sales tax collection, which typically costs around $10-15 for initial registration.
• Annual business license fees in small Kentucky municipalities like Hazel generally range from $25-75.
• Some local jurisdictions require annual inspections costing $50-100, and there may be zoning compliance fees of $25-50.
• Tourism development fees, if applicable in Calloway County, could add another 1-2% to the total tax burden.