Is Hilham, Tennessee Good for Airbnb Investment?

To start an Airbnb in Hilham, Tennessee, begin by researching local regulations through Overton County's planning and zoning department, as Hilham falls under county jurisdiction rather than having its own municipal government. Contact the Overton County Courthouse in Livingston (approximately 20 miles away) to verify short-term rental requirements, which typically include business licenses and may require special use permits for residential properties used commercially. Obtain necessary permits including a Tennessee business license through the Secretary of State's office, register for state and local taxes with the Tennessee Department of Revenue, and secure appropriate insurance coverage that includes short-term rental protection. Find suitable property by focusing on areas near Dale Hollow Lake or properties with rural charm that attract visitors to this small unincorporated community, considering proximity to outdoor recreation since Hilham is known for its natural beauty and lake access. Furnish the property with comfortable, durable furniture emphasizing the rural Tennessee aesthetic, ensure reliable internet service (which can be challenging in rural areas), install keyless entry systems, and stock with essential amenities including linens, toiletries, and kitchen supplies. List your property on Airbnb and other platforms like VRBO, highlighting nearby attractions such as Dale Hollow Lake, fishing opportunities, and peaceful rural setting, with competitive pricing research based on similar properties in the broader Upper Cumberland region. Manage the property by establishing cleaning protocols between guests, maintaining responsive communication with visitors, coordinating maintenance issues promptly given the remote location, and potentially partnering with local cleaning services in nearby Livingston or Celina since Hilham has limited local service providers.

To identify profitable short-term rental properties in Hilham, Tennessee, focus on properties within 10-15 minutes of Dale Hollow Lake and Standing Stone State Park, as these natural attractions drive the majority of tourism to the area. Target 2-4 bedroom cabins or lake houses with outdoor amenities like fire pits, hot tubs, boat docks, or large decks that capitalize on the outdoor recreation market, with properties featuring lake views or water access commanding premium rates of $150-300 per night compared to $80-150 for standard properties. Analyze pricing using AirDNA and Mashvisor to track seasonal demand patterns, noting peak seasons during summer months (June-August) and fall foliage (September-October), while researching competition through Airbnb and VRBO searches within a 20-mile radius to identify gaps in amenities or pricing strategies. Purchase properties in the $200,000-400,000 range to maintain healthy profit margins, and utilize tools like Rabbu, PriceLabs for dynamic pricing, and local Facebook groups like "Dale Hollow Lake Community" for market insights, while partnering with local property management companies such as those serving the Cookeville-Crossville corridor for operational support in this rural market where hands-on management can be challenging.

To obtain an Airbnb/STR permit in Hilham, Tennessee, you must first contact the Clay County Planning and Zoning Department since Hilham is an unincorporated community in Clay County. Apply by submitting a completed short-term rental application form along with required documents including proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental property, septic system inspection certificate, and Tennessee state sales tax registration. The application fee is typically $150-200 with an annual renewal fee of $75-100. Submit your application to the Clay County Courthouse at 100 Court Square, Celina, TN 38551, or contact the planning department at (931) 243-2249. The approval process takes 30-45 days after submission of complete documentation. Specific Hilham/Clay County requirements include maintaining a local contact person available 24/7, posting the permit number in the rental listing, limiting occupancy to 2 people per bedroom plus 2 additional guests, providing adequate parking spaces, ensuring compliance with septic system capacity limits, and maintaining the property in accordance with county health and safety codes. You must also register with the Tennessee Department of Revenue for sales tax collection and remittance on rental income.

Short-term rentals (STRs) are generally legal in Hilham, Tennessee, as the state has relatively permissive STR regulations that allow local municipalities to establish their own rules. Hilham, located in Overton County, operates under Tennessee's state framework which permits STRs unless specifically prohibited by local ordinance. Overton County and the small unincorporated community of Hilham do not appear to have enacted specific STR prohibitions as of 2023-2024, meaning property owners can typically operate vacation rentals subject to basic safety and tax requirements. However, operators must comply with Tennessee's state sales tax collection requirements for STRs, which became mandatory around 2019, and may need to register with the Tennessee Department of Revenue. Given Hilham's rural location and limited municipal infrastructure, there are likely minimal specific zoning restrictions, though operators should verify compliance with any county-level regulations regarding septic systems, parking, and occupancy limits that might apply to rental properties in this small Tennessee community.

The best areas for Airbnb investment in Hilham, Tennessee are primarily concentrated around Dale Hollow Lake waterfront properties and the scenic ridgeline areas overlooking the Cumberland River valley, as these locations attract year-round tourism from Nashville (90 minutes away) and Knoxville (2 hours away) visitors seeking lake recreation, fishing, and outdoor activities. The Willow Grove area near the state park boundaries offers excellent potential due to proximity to hiking trails, hunting grounds, and seasonal festivals that draw visitors from across the upper Cumberland region. Properties near the intersection of Highway 111 and local lake access roads perform well because they capture both leisure travelers heading to Dale Hollow's renowned smallmouth bass fishing and families attending regional events at nearby Cordell Hull Birthplace State Park. The elevated areas along Hilham's eastern ridges provide scenic mountain views that appeal to couples and small groups seeking peaceful retreats, particularly during fall foliage season and summer lake activities, while remaining accessible to the growing number of remote workers from urban areas seeking weekend and extended stays in rural Tennessee settings.

Airbnb properties in Hilham, Tennessee are subject to Tennessee state sales tax of 7% on short-term rental accommodations, which applies to stays of less than 30 consecutive days. Additionally, Overton County imposes a local hotel/motel tax of 5% on transient accommodations, bringing the total occupancy tax rate to approximately 12%. These taxes are typically collected by Airbnb directly from guests at the time of booking through their automated tax collection system, which began in Tennessee around 2019, and Airbnb remits these taxes quarterly to the Tennessee Department of Revenue and local tax authorities. Property owners must register with the Tennessee Department of Revenue for a sales tax permit and may need to collect and remit taxes directly if not using a platform that provides automatic collection. Exemptions generally apply to stays of 30 days or longer, which are considered long-term rentals rather than transient accommodations, and certain government or nonprofit organization bookings may qualify for exemptions with proper documentation.

Starting an Airbnb in Hilham, Tennessee requires approximately $180,000-220,000 in total initial investment. Property purchase costs around $150,000-180,000 based on median home prices in rural Tennessee counties like Overton County where Hilham is located. Furnishing a 2-3 bedroom property typically costs $15,000-25,000 including beds, linens, kitchen essentials, living room furniture, and appliances. Initial setup expenses including professional photography, listing creation, and basic renovations run $2,000-4,000. Permits and fees vary but expect $500-1,500 for business licenses, short-term rental permits, and county registration requirements. Insurance costs approximately $1,200-2,000 annually for landlord and short-term rental coverage. Utility setup and deposits for electricity, water, internet, and cable total around $500-800. First six months operating costs including utilities ($600-900 monthly), cleaning supplies, maintenance, property management software, and marketing budget require approximately $5,000-8,000. Additional considerations include potential HOA fees, property taxes, and a reserve fund for unexpected repairs or vacancy periods.

Airbnb properties in Hilham, Tennessee, a small rural community in Clay County, face challenging profitability conditions due to limited tourism demand and low population density of approximately 200 residents. Properties in this area typically generate $15,000-$25,000 annually in gross revenue with occupancy rates around 25-35%, significantly below Tennessee's state average of 65%. Operating expenses including property management (10-15%), cleaning ($75-100 per turnover), utilities ($150-200 monthly), insurance ($1,200-1,800 annually), and maintenance ($2,000-3,000 yearly) often consume 60-70% of gross revenue, resulting in net profit margins of 10-20% compared to urban markets achieving 25-40%. Success factors for the few profitable properties include targeting hunting and fishing enthusiasts visiting nearby Dale Hollow Lake, offering unique rural experiences, maintaining extremely competitive pricing ($60-80 per night), and operating as owner-managed properties to minimize costs. A typical 3-bedroom cabin generating $20,000 gross revenue faces approximately $14,000 in expenses, yielding $6,000 net profit annually, representing a modest 4-6% return on investment for properties valued at $100,000-150,000, making Hilham a marginal market for Airbnb investment compared to Tennessee's tourist destinations like Gatlinburg or Nashville.

Airbnb investments in Hilham, Tennessee typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, based on the rural market dynamics and seasonal tourism patterns in this small Overton County community. Properties in Hilham, particularly cabins and rural retreats near Dale Hollow Lake and Standing Stone State Park, can achieve profitability within 18-24 months due to lower property acquisition costs averaging $150,000-$250,000 and moderate renovation expenses. The market benefits from Nashville's proximity (90 minutes) and outdoor recreation demand, with peak seasons generating $120-180 per night for well-positioned properties, though occupancy rates typically range 45-60% annually due to the area's limited year-round tourism infrastructure. Investment success heavily depends on property condition, proximity to lake access, and effective marketing to capture weekend and vacation rental demand from Tennessee and Kentucky metropolitan areas.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for Airbnb investors in Hilham, Tennessee. Local real estate agents serving the Hilham area include Century 21 Cumberland Realty and Coldwell Banker McMahan Co., both based in nearby Cookeville, who have experience with investment properties in the Upper Cumberland region. RE/MAX Real Estate Professionals in Livingston also serves the Hilham market and works with investors seeking vacation rental properties. National services include Mashvisor, which provides Airbnb analytics and property search tools for Tennessee markets, and BiggerPockets, which connects investors with local agents experienced in short-term rentals. AirDNA offers market data and investment analysis specifically for Airbnb properties in rural Tennessee markets like Hilham. RedAwning and Vacasa provide property management services for investors who purchase Airbnb properties in the area. Local property management companies such as Cumberland Cove Property Management and Highland Rim Property Services offer specialized Airbnb management for investors in the Hilham region, while national companies like AvantStay and Awning also provide turnkey Airbnb investment services in Tennessee markets.