Is Hollywood, Alabama Good for Airbnb Investment?

To start an Airbnb in Hollywood, Alabama, begin by researching local zoning laws and regulations through Jackson County and the City of Hollywood planning departments, as short-term rentals may require special permits or fall under specific zoning classifications. Contact the Jackson County Revenue Commissioner's office to understand business license requirements and tax obligations, including occupancy taxes that typically range 4-6% in Alabama municipalities. Find a suitable property by working with local real estate agents familiar with Hollywood's residential areas, focusing on properties near Scottsboro Lake or downtown areas that attract tourists, with typical investment properties ranging $80,000-$150,000. Obtain necessary permits including a business license from Jackson County, fire safety inspection from the local fire department, and ensure compliance with Alabama Department of Public Health regulations for short-term rentals. Furnish the property with essential amenities including Wi-Fi, cable TV, kitchen appliances, linens, and outdoor furniture to capitalize on the area's lake activities, budgeting approximately $8,000-$15,000 for complete furnishing. List your property on Airbnb, VRBO, and Booking.com with competitive pricing around $75-$125 per night based on local market rates, highlighting proximity to Guntersville Lake, Scottsboro, and outdoor recreation opportunities. Manage the property by establishing cleaning protocols between guests, installing keyless entry systems, creating detailed house rules regarding noise and occupancy limits, and maintaining responsive communication with guests while building relationships with local cleaning services and maintenance contractors in the Hollywood-Scottsboro area.

To identify profitable short-term rental properties in Hollywood, Alabama, focus on locations within 10-15 minutes of major attractions like the Unclaimed Baggage Center and close to Highway 35 for easy access to Huntsville and Birmingham markets. Target 2-4 bedroom single-family homes or condos built after 1990 with modern amenities, full kitchens, outdoor spaces, and reliable WiFi, as business travelers from Huntsville's tech corridor and families visiting the region drive demand. Conduct pricing analysis using AirDNA and Mashvisor to identify properties where nightly rates of $80-150 can generate 15-25% annual returns, comparing against local long-term rental rates of $800-1,200 monthly. Research competition within a 5-mile radius using Airbnb and VRBO searches, noting that Hollywood has limited STR inventory compared to nearby Scottsboro, creating opportunity for well-positioned properties. Utilize tools like Rabbu and AllTheRooms for market analysis, partner with local property management companies familiar with Jackson County regulations, and leverage the Alabama Tourism Department's data on regional visitor patterns, particularly focusing on Lake Guntersville recreational traffic and Huntsville business overflow during peak conference seasons.

To obtain an Airbnb/STR permit in Hollywood, Alabama, contact the Hollywood City Hall at 256-574-2721 or visit their offices at 22969 US Highway 72, Hollywood, AL 35752, as the city likely requires a business license and short-term rental permit through their planning and zoning department. Required documents typically include a completed business license application, property deed or lease agreement, certificate of liability insurance (minimum $1 million coverage), floor plan of the rental property, contact information for a local property manager if you're not local, and proof of compliance with fire safety codes. The application fee is estimated at $100-200 for the business license plus $150-300 for the STR permit, with annual renewal fees of approximately $75-150. Submit your complete application package to the city clerk's office, schedule any required property inspections with the building department, and allow 30-45 days for processing and approval. Hollywood-specific requirements likely include maintaining the property's residential character, providing adequate parking spaces, ensuring proper waste management, limiting occupancy based on bedroom count, and maintaining a 24-hour contact number for noise or disturbance complaints. Once approved, display your permit number in all online listings and renew annually by the specified deadline, typically December 31st.

Short-term rentals (STRs) are legal in Hollywood, Alabama, but operate under limited local regulation as the city has not enacted comprehensive STR-specific ordinances as of 2023. Alabama state law generally permits STRs, and Hollywood follows basic zoning and business licensing requirements that apply to rental properties, typically requiring operators to obtain standard business licenses and comply with residential zoning restrictions. The city does not have specific prohibited areas for STRs, though properties must conform to existing residential zoning codes and homeowners association rules where applicable. Recent legal changes have been minimal at the local level, with most regulatory developments occurring at the state level where Alabama has maintained a relatively permissive stance toward STR operations compared to other states. Operators in Hollywood must ensure compliance with state tax collection requirements for transient occupancy and may face standard noise, occupancy, and safety regulations that apply to all rental properties, but the city has not implemented the stricter registration systems, caps on STR numbers, or designated restriction zones seen in larger Alabama cities like Birmingham or Huntsville.

Hollywood, Alabama is a small town in Jackson County with limited Airbnb investment opportunities compared to major tourist destinations. The most promising area would be near Scottsboro and the Tennessee River corridor, approximately 15-20 minutes from Hollywood, where properties can capitalize on Lake Guntersville recreational tourism, fishing tournaments, and boating activities that draw visitors year-round. The downtown Scottsboro historic district offers potential for business travelers visiting local manufacturing facilities like Revere Plastics Systems and Kimball Electronics, which established operations in the region around 2010-2015. Properties near the Russell Cave National Monument area could attract history enthusiasts and outdoor recreation visitors exploring the archaeological site and surrounding hiking trails. The US-72 corridor between Hollywood and Scottsboro presents opportunities for travelers passing through to Huntsville's aerospace industry or tourists heading to the Appalachian foothills, with properties offering convenient highway access while maintaining rural charm that appeals to visitors seeking peaceful retreats from urban areas.

In Hollywood, Alabama, Airbnb properties are subject to Alabama state lodging tax of 4% on gross receipts, which is collected by the Alabama Department of Revenue and must be remitted monthly by hosts who exceed $20,000 in annual rental income or have more than 200 transactions. Additionally, hosts must pay Jefferson County's transient occupancy tax of 2% and Hollywood's local lodging tax of 3%, both collected through the county tax assessor's office with quarterly remittance required for properties rented less than 30 consecutive days. The combined effective tax rate is 9% on short-term rental income, with collection typically handled through Airbnb's automated tax collection service for participating jurisdictions, though hosts remain ultimately responsible for compliance. Exemptions apply to rentals exceeding 30 consecutive days to the same guest, properties rented fewer than 15 days per year with minimal host involvement, and certain disability-accessible accommodations, while hosts must register with the Alabama Department of Revenue and obtain a transient vendor license costing approximately $25 annually.

To start an Airbnb in Hollywood, Alabama, the total costs would be approximately $185,000-$220,000. Property purchase represents the largest expense at $120,000-$150,000 based on median home prices in rural Alabama markets. Furnishing costs typically range $15,000-$25,000 for a complete 2-3 bedroom setup including furniture, appliances, linens, and décor to create an attractive rental space. Initial setup costs including professional photography, listing creation, welcome materials, and basic renovations average $3,000-$5,000. Permits and fees vary by local requirements but generally cost $500-$1,500 for business licenses, short-term rental permits, and inspection fees. Insurance premiums for short-term rental coverage typically run $2,000-$3,000 annually, with the first year paid upfront. Utility deposits and initial connections for electricity, water, gas, internet, and cable average $1,000-$2,000. First six months operating costs including utilities ($150-200/month), cleaning services ($75-100 per turnover), maintenance reserves, property management software subscriptions, and marketing expenses total approximately $4,000-$6,000, assuming moderate occupancy rates during the initial launch period.

Airbnb properties in Hollywood, Alabama show moderate profitability potential with average nightly rates ranging from $75-120 for typical 2-3 bedroom homes, generating approximately $18,000-28,000 in annual gross revenue at 60-70% occupancy rates. Operating expenses typically consume 40-50% of gross revenue, including cleaning fees ($30-50 per turnover), property management (15-25%), utilities ($150-200 monthly), insurance ($1,200-1,800 annually), and maintenance costs averaging $2,000-3,000 yearly. Net profit margins generally fall between 25-35% for well-managed properties, with successful hosts like those operating renovated historic homes near downtown Hollywood achieving higher margins through premium pricing and extended stays targeting business travelers visiting nearby Huntsville's aerospace industry. Key success factors include strategic location within 30 minutes of Redstone Arsenal, professional photography, consistent 4.8+ star ratings, and targeting the growing demand from contractors and professionals working on defense projects, with properties closer to major highways like US-72 commanding 15-20% higher rates than rural locations.

Airbnb investments in Hollywood, Alabama are expected to generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, primarily due to the area's proximity to larger markets like Birmingham and Huntsville which drive occasional business and leisure travel demand. Properties typically reach profitability within 18-24 months, with average daily rates of $75-$95 and occupancy rates around 45-55% annually. The market benefits from lower property acquisition costs compared to major metropolitan areas, with investment properties averaging $150,000-$250,000, though investors should expect seasonal fluctuations with stronger performance during spring and fall months when outdoor activities and regional events increase visitor traffic to north-central Alabama.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties in Hollywood, Alabama, providing market analysis and investment insights. Local real estate agents like Realty South and Coldwell Banker serve the North Alabama region including Hollywood, with agents experienced in investment properties. National services include Awning, which offers full-service Airbnb property management and acquisition assistance, and Mashvisor, providing real estate analytics for rental property investments. RedAwning specializes in vacation rental property sales and management across Alabama markets. Local property management companies like Alabama Vacation Rentals and Tennessee Valley Property Management offer services extending to the Hollywood area. National platforms such as Roofstock and BiggerPockets connect investors with short-term rental opportunities, while AirDNA provides market data and analytics for Airbnb investments in smaller Alabama markets. Regional real estate firms like RE/MAX and Keller Williams have agents specializing in investment properties throughout Jackson County and surrounding areas where Hollywood is located.