Is Jackson, Tennessee Good for Airbnb Investment?

To start an Airbnb in Jackson, Tennessee, begin by researching local zoning laws and regulations through the Jackson Planning Department, as the city requires short-term rental permits and compliance with residential zoning restrictions that typically limit rentals to no more than 30% of units in residential areas. Obtain necessary permits including a business license from Jackson City Hall (approximately $50-100), a short-term rental permit (estimated $200-300 annually), and ensure compliance with fire safety codes and occupancy limits set by the Jackson Fire Department. Find a suitable property in permitted zones, focusing on areas near downtown Jackson, Union University, or the West Tennessee Healthcare facilities, with properties typically ranging from $80,000-200,000 depending on size and location. Furnish the property with essential amenities including Wi-Fi, cable TV, kitchen appliances, linens, and safety equipment like smoke detectors and fire extinguishers as required by Tennessee state law. Create your listing on Airbnb and other platforms like VRBO, highlighting proximity to local attractions such as Casey Jones Village, Rusty's TV & Movie Car Museum, and the International Rock-A-Billy Hall of Fame, with competitive pricing around $75-150 per night based on local market rates. Manage your property by establishing cleaning protocols between guests, maintaining 24/7 communication availability, coordinating with local cleaning services (typically $40-80 per turnover), and ensuring compliance with Tennessee's 9.25% state sales tax plus Jackson's local occupancy tax requirements while maintaining detailed records for tax purposes.

To identify profitable short-term rental properties in Jackson, Tennessee, focus on locations within 2-3 miles of downtown Jackson, near the West Tennessee Healthcare system, or close to Union University and Lane College for consistent demand from medical professionals, visiting families, and university guests. Target 2-4 bedroom single-family homes or duplexes built after 1990 with modern amenities, full kitchens, dedicated parking, and outdoor spaces, as these perform well in secondary markets like Jackson. Conduct pricing analysis using AirDNA and Mashvisor to identify properties where potential STR revenue exceeds traditional rental income by 40-60%, typically finding sweet spots in the $80,000-$150,000 purchase range that can generate $75-$125 nightly rates. Research competition by analyzing existing Airbnb and VRBO listings within 5-mile radius, noting occupancy patterns, pricing strategies, and guest reviews to identify underserved niches or areas with limited quality options. Utilize tools like Rabbu, BiggerPockets market analysis, and local MLS data through West Tennessee real estate agents, while connecting with Jackson Chamber of Commerce for tourism trends and consulting Madison County planning department for zoning compliance, as Jackson's growing medical tourism and university visitor market creates opportunities for investors willing to provide quality accommodations in this emerging STR market.

To obtain an Airbnb/STR permit in Jackson, Tennessee, you must first contact the Jackson Planning Department at City Hall located at 314 East Main Street to determine zoning compliance, as short-term rentals are typically only permitted in certain residential zones with conditional use permits. Submit an application to the Planning Commission including a completed conditional use permit application, property deed, site plan showing parking and occupancy details, proof of property insurance, and a $150-200 application fee. Required documents also include a business license from the City Clerk's office ($50-75 annually), Tennessee state sales tax registration, proof of smoke and carbon monoxide detectors, fire extinguisher documentation, and neighbor notification letters within 300 feet of the property. The Planning Commission reviews applications monthly, with the entire process typically taking 60-90 days from submission to approval. Jackson requires STR properties to maintain minimum parking spaces (typically 2 per unit), limit occupancy to 2 people per bedroom plus 2 additional guests, display permit numbers in all advertising, maintain a local contact person available 24/7, and comply with noise ordinances with quiet hours from 10 PM to 7 AM. Annual renewals are required with updated documentation and fees, and properties must pass periodic safety inspections conducted by the Fire Marshal's office.

Short-term rentals (STRs) are legal in Jackson, Tennessee, but operate under specific regulations established by the city. Jackson requires STR operators to obtain a business license and comply with zoning restrictions that generally limit short-term rentals to commercial and mixed-use districts, while prohibiting them in most residential neighborhoods. Properties must meet safety requirements including smoke detectors, carbon monoxide detectors, and fire extinguishers, and operators must provide contact information for a responsible party available 24/7. The city implemented these regulations around 2019-2020 following concerns about neighborhood impacts and housing availability. Violations can result in fines and license revocation, and the city has been actively enforcing these rules. Jackson's approach reflects a balance between allowing the economic benefits of short-term rentals while protecting residential character, though some areas of the city remain completely off-limits to STR operations.

The best Airbnb investment areas in Jackson, Tennessee include Downtown Jackson near the historic courthouse square and West Tennessee Farmers Market, which attracts visitors for events, dining, and shopping while serving business travelers visiting the numerous corporate offices and medical facilities. The Midtown/University area near Union University and Lane College provides steady demand from visiting families, prospective students, and academic events throughout the year. The North Jackson corridor along Highway 45 Bypass offers excellent accessibility to major employers like Procter & Gamble, Kellogg's, and the regional medical center, making it ideal for extended-stay business travelers and medical tourists. The Casey Jones Village area capitalizes on tourism related to the famous railroad engineer's legacy and attracts families visiting the themed attractions, while properties near the West Tennessee Agricultural Museum and Cypress Grove Nature Park appeal to outdoor enthusiasts and educational tourists. The areas surrounding Jackson-Madison County General Hospital and other medical facilities in the medical district provide consistent demand from patients' families and medical professionals, particularly given Jackson's role as a regional healthcare hub serving rural West Tennessee communities.

Jackson, Tennessee imposes a hotel/motel tax of 5% on short-term rental accommodations including Airbnbs, which is collected in addition to the state sales tax of 7% and local sales tax of 2.25%, bringing the total tax burden to approximately 14.25%. The hotel/motel tax is administered by the Jackson Tourism Development Authority and applies to rentals of less than 30 consecutive days. Airbnb typically collects and remits the hotel/motel tax directly to the city on behalf of hosts through their automated tax collection system, while hosts remain responsible for registering with the Tennessee Department of Revenue for sales tax collection and remittance. Property owners must obtain a business license from the City of Jackson and register for a sales tax permit, with sales taxes due monthly if collections exceed $100 per month. There are generally no exemptions for the hotel/motel tax on short-term rentals, though stays exceeding 30 days would be exempt from the transient occupancy tax but may still be subject to sales tax depending on the arrangement.

To start an Airbnb in Jackson, Tennessee, expect total costs around $180,000-$220,000. Property purchase represents the largest expense at approximately $150,000 based on Jackson's median home price as of 2023. 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, and basic renovations average $3,000-$5,000. Permits and fees in Jackson include business license ($50-$100), short-term rental permit if required ($200-$500), and potential HOA approval costs totaling around $500-$1,000. Insurance for short-term rentals runs $1,200-$2,000 annually, with six months costing $600-$1,000. Utility setup and deposits for electricity, water, gas, internet, and cable average $500-$800 initially, with six months of ongoing utilities costing approximately $1,800-$2,400. First six months operating costs including cleaning supplies, maintenance, marketing, platform fees, and miscellaneous expenses add another $2,000-$3,000. Additional considerations include potential property management software subscriptions and emergency repair funds, bringing the comprehensive startup investment to the upper end of the estimated range.

Airbnb properties in Jackson, Tennessee typically generate annual revenues between $15,000-$35,000 for entire homes, with average daily rates ranging from $75-$120 depending on property size and amenities. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($25-40 per turnover), property management (10-20%), utilities ($150-250/month), insurance ($1,200-2,000 annually), and maintenance costs averaging $2,000-4,000 yearly. Profit margins for well-managed properties typically range from 15-25% after all expenses, with successful operators like those managing properties near downtown Jackson or Casey Jones Village achieving higher margins through strategic pricing and guest experience optimization. Key success factors include proximity to attractions like the Casey Jones Home & Railroad Museum, maintaining 4.5+ star ratings, professional photography, and competitive pricing during peak periods such as summer months and local events. Properties within 10 miles of downtown Jackson or near major highways like I-40 tend to outperform rural locations, with occupancy rates averaging 55-70% for top-performing listings compared to 30-45% for less optimized properties.

Airbnb investments in Jackson, Tennessee typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-15% depending on property type and location within the market. Properties near downtown Jackson or close to Union University tend to perform better, with investors seeing profitability within 18-24 months of initial investment. The market benefits from consistent demand from university visitors, medical tourism related to Jackson-Madison County General Hospital, and travelers exploring the Casey Jones Home & Railroad Museum area. Average daily rates range from $85-$120 with occupancy rates of 65-75% annually, while initial investment costs for suitable properties typically range from $80,000-$150,000. Investors focusing on 2-3 bedroom homes or small multi-family properties within 10 minutes of major attractions or the university campus generally achieve the higher end of these ROI ranges, with some exceptional properties reaching 20-22% annual returns in their second and third years of operation.

STRSearch is a national platform that helps investors identify profitable short-term rental properties in Jackson, Tennessee by providing market data and investment analysis. Local real estate agents specializing in Airbnb investments in Jackson include Realty Executives Associates, Crye-Leike Realtors, and Century 21 Platinum Partners, with agents like those at Jackson Area Association of Realtors who understand the local vacation rental market. National services include Mashvisor (founded 2014), which offers Airbnb analytics and property search tools, AirDNA (established 2015) for market data and revenue projections, Awning (launched 2020) providing end-to-end Airbnb investment services, and Roofstock (founded 2015) which occasionally features short-term rental properties. Additional local services include property management companies like RedAwning and local investment groups such as West Tennessee Real Estate Investors Association, while national platforms like BiggerPockets connect investors with local professionals who specialize in vacation rental properties in the Jackson market.