Is Horse Cave, Kentucky Good for Airbnb Investment?

To start an Airbnb in Horse Cave, Kentucky, begin by researching local regulations through the Horse Cave City Hall (270-786-2550) and Hart County Planning Commission, as Kentucky allows short-term rentals but municipalities may have specific requirements including business licenses, occupancy permits, and zoning compliance. Obtain necessary permits including a Kentucky business license through the Secretary of State's office, local business permit from Horse Cave City Hall (approximately $25-50 annually), and ensure your property meets fire safety codes and health department standards. Find a suitable property in Horse Cave's historic downtown area near Mammoth Cave National Park or residential neighborhoods, considering properties priced between $80,000-150,000 that can accommodate tourists visiting the nearby attractions. Furnish the space with comfortable, durable furniture from retailers like Ashley Furniture in Bowling Green or online sources, focusing on a rustic Kentucky theme with amenities like high-speed internet, cable TV, full kitchen, and local guidebooks highlighting Mammoth Cave, Kentucky Down Under Adventure Zoo, and local dining options. List your property on Airbnb with professional photos showcasing the space and proximity to Mammoth Cave (just 10 miles away), set competitive rates around $75-125 per night based on local market analysis, and create detailed descriptions emphasizing the small-town charm and cave country location. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating key exchanges through lockboxes or personal meetings, maintaining the property regularly, and building relationships with local cleaning services and maintenance contractors in the Horse Cave area while ensuring compliance with Kentucky's 6% sales tax on short-term rentals and any applicable local lodging taxes.

To identify profitable short-term rental properties in Horse Cave, Kentucky, focus on locations within 10-15 minutes of Mammoth Cave National Park, as this drives the majority of tourism to the area. Target properties with 2-4 bedrooms, outdoor spaces, and rustic or modern farmhouse aesthetics that appeal to families and groups visiting the cave system. Analyze pricing by researching comparable Airbnb listings in Cave City, Park City, and Bowling Green, with typical rates ranging $80-150 per night depending on size and amenities. Competition research should examine occupancy rates of existing STRs near the national park entrance and along I-65 corridor, noting that peak seasons are spring through fall with lower winter demand. Utilize AirDNA for market analysis, STR Helper for revenue projections, and monitor Mammoth Cave National Park visitor statistics through the National Park Service website to understand seasonal trends. Properties with unique features like hot tubs, fire pits, or cave-themed decor command premium rates, while proximity to local attractions like Kentucky Down Under Adventure Zoo and Diamond Caverns provides additional booking appeal beyond the primary Mammoth Cave draw.

To obtain an Airbnb/STR permit in Horse Cave, Kentucky, contact the Horse Cave City Hall at 107 Main Street or call (270) 786-2550 to begin the application process, as the city likely requires a business license and potentially a conditional use permit for short-term rentals. Required documents typically include a completed business license application, property deed 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. Application fees generally range from $50-150 for the business license plus potential zoning permit fees of $100-300, with annual renewal fees of approximately $25-75. The approval timeline is estimated at 2-4 weeks for standard applications, though conditional use permits may require planning commission review extending the process to 6-8 weeks. Horse Cave specific requirements likely include compliance with Kentucky fire safety codes, maximum occupancy limits based on square footage and bedrooms, adequate parking spaces (typically 1-2 per unit), proper waste management arrangements, and maintaining quiet hours typically from 10 PM to 7 AM, along with providing emergency contact information to neighbors and city officials.

Short-term rentals (STRs) are generally legal in Horse Cave, Kentucky, as the city does not appear to have specific municipal ordinances prohibiting them as of 2024. However, operators must comply with Kentucky state regulations and obtain proper business licenses from the city. Horse Cave, located in Hart County, follows typical small-town Kentucky approaches where STRs are permitted but may require basic business registration and compliance with zoning laws that distinguish between residential and commercial use. There are no known prohibited areas specifically for STRs within the city limits, though properties must meet standard safety and occupancy requirements. The city has not implemented recent major legal changes regarding STR regulations, unlike larger Kentucky cities such as Louisville or Lexington which have enacted more restrictive frameworks. Property owners should verify current zoning compliance and obtain necessary permits from Horse Cave's city clerk office, as rural Kentucky communities often handle STR oversight through existing business licensing rather than specialized vacation rental ordinances.

The best areas for Airbnb investment in Horse Cave, Kentucky center around the downtown historic district near Mammoth Cave National Park, which attracts over 2 million visitors annually seeking convenient lodging within 15 minutes of the park entrance. The Main Street corridor offers Victorian-era properties that appeal to tourists interested in the town's underground cave tours and historic charm, while properties near the Horse Cave Theatre draw visitors attending year-round performances and cultural events. The residential areas along KY-218 and around Hidden River Cave provide quieter settings for families visiting Mammoth Cave while offering easy access to Interstate 65, making them attractive to business travelers heading to Bowling Green or Nashville. Properties near the American Cave Museum and Kentucky Down Under Adventure Zoo capture tourism overflow, particularly during peak summer months and fall foliage season when Mammoth Cave accommodations fill up quickly, creating strong demand for alternative lodging options in this gateway community.

Airbnb properties in Horse Cave, Kentucky are subject to Kentucky's 6% state sales tax on transient accommodations, which applies to stays 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, Hart County imposes a 3% local transient room tax on short-term rental accommodations, bringing the total occupancy tax rate to approximately 9% for most Airbnb stays in Horse Cave. Hosts must register with Hart County to collect and remit the local tax quarterly, typically due by the 20th of the month following each quarter, and payments are made to the Hart County Clerk's office. Properties rented for 30 days or longer are generally exempt from these transient accommodation taxes, and some jurisdictions may provide exemptions for stays by government employees on official business or certain charitable organizations, though specific documentation is required to qualify for such exemptions.

The total cost to start an Airbnb in Horse Cave, Kentucky would be approximately $185,000-$220,000. Property purchase costs around $120,000-$140,000 based on median home prices in rural Kentucky markets. Furnishing a 2-3 bedroom property requires $15,000-$25,000 for beds, linens, furniture, appliances, and decor to meet guest expectations. Initial setup costs including professional photography, listing creation, welcome materials, and basic renovations total $3,000-$5,000. Permits and fees vary but expect $500-$1,500 for business licenses, short-term rental permits, and potential HOA approvals. Insurance including landlord and short-term rental coverage costs $2,000-$3,000 annually. Utility setup and deposits for electricity, water, internet, cable, and trash service require $1,000-$2,000. First six months operating costs including utilities ($600/month), cleaning services ($100 per turnover), maintenance, supplies, platform fees (3% of bookings), and marketing total approximately $8,000-$12,000 assuming 50-60% occupancy rates typical for rural Kentucky markets.

Airbnb properties in Horse Cave, Kentucky typically generate modest returns with average nightly rates ranging from $75-120 for standard 2-3 bedroom homes, translating to annual gross revenues of $15,000-25,000 for properties with 40-60% occupancy rates. Operating expenses including cleaning fees ($40-60 per turnover), utilities ($150-200 monthly), property management (15-25% of revenue), insurance ($1,200-1,800 annually), and maintenance ($2,000-3,500 yearly) typically consume 45-65% of gross revenue, resulting in net profit margins of 15-35%. Success factors in this rural Kentucky market include proximity to Mammoth Cave National Park (20 minutes away), competitive pricing below Louisville and Nashville markets, strong property presentation with local charm, and targeting outdoor enthusiasts and cave tourists. Properties within 5 miles of Interstate 65 perform better due to accessibility, while those offering unique features like hot tubs, fire pits, or rustic cabin aesthetics can command premium rates of $130-180 nightly. A typical 3-bedroom home purchased for $120,000-180,000 can achieve 8-15% annual returns on investment, with properties closer to Mammoth Cave or featuring distinctive amenities reaching the higher end of this range, though seasonal fluctuations significantly impact performance with peak months (May-October) generating 70% of annual revenue.

Based on Horse Cave, Kentucky market conditions, Airbnb investments typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% depending on property acquisition costs and renovation investments. Properties in Horse Cave, located near Mammoth Cave National Park, benefit from consistent tourist traffic generating average daily rates of $75-120 during peak seasons (spring through fall) and $50-80 in winter months. Initial profitability usually occurs within 12-18 months after launch, assuming 60-70% average occupancy rates throughout the year. Total investment recovery, including down payment and renovation costs, typically takes 7-10 years for most properties in the $80,000-150,000 purchase price range common in Horse Cave. Properties closer to Mammoth Cave attractions or featuring unique amenities can achieve the higher end of these ROI ranges, while standard residential conversions tend toward the lower estimates.

STRSearch leads the national market for Airbnb investment property analysis and market research. In Horse Cave, Kentucky, local real estate agents like Century 21 Advantage Realty and Coldwell Banker Legacy Group have experience with short-term rental properties in the region. RE/MAX Real Estate Professionals and Keller Williams Realty serve the broader south-central Kentucky area including Cave City and Horse Cave. National services include Awning for property management and investment guidance, RedAwning for vacation rental market analysis, and AirDNA for short-term rental data analytics. Mashvisor provides investment property analysis tools specifically for Airbnb properties, while BiggerPockets connects investors with local professionals. Local property management companies like Kentucky Lake Vacation Rentals and Cave Country Cabins offer insights into the Mammoth Cave tourism market. Additional national platforms include Roofstock for turnkey rental properties, Arrived Homes for fractional real estate investing, and HostGPO for bulk purchasing and property setup services targeting the Cave Country tourism corridor.