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 Tennessee state tax requirements including sales tax registration. Find a suitable property in permitted zones, focusing on areas near downtown Jackson or near Lane College, ensuring the property meets safety requirements including smoke detectors, carbon monoxide detectors, and proper egress windows. Furnish the space with essential amenities including quality bedding, kitchen supplies, WiFi, and local guidebooks, budgeting approximately $3,000-8,000 for initial furnishing depending on property size. Create your Airbnb listing with professional photos highlighting Jackson's proximity to Nashville (90 minutes) and Memphis (90 minutes), competitive pricing around $75-150 per night based on local market rates, and emphasize nearby attractions like the International Rock-A-Billy Hall of Fame. Manage the property by establishing cleaning protocols between guests, maintaining responsive communication, coordinating with local cleaning services (typically $40-80 per turnover), and staying compliant with Jackson's noise ordinances and parking requirements while collecting and remitting the required 9.75% Tennessee sales tax plus any applicable local occupancy taxes.

To identify profitable short-term rental properties in Jackson, Tennessee, focus on locations within 2-3 miles of downtown Jackson, near Union University campus, or close to Casey Jones Village and other tourist attractions, as these areas generate consistent demand from business travelers, university visitors, and tourists. Target 2-4 bedroom single-family homes or duplexes built after 1990 with modern amenities, full kitchens, dedicated parking, and outdoor spaces, as Jackson's market favors family-friendly accommodations over luxury units. Conduct pricing analysis using AirDNA and Mashvisor to identify properties where potential STR revenue exceeds traditional rental income by at least 30-40%, typically finding sweet spots in the $80,000-$150,000 purchase price range that can command $75-$125 nightly rates. Research competition by analyzing existing Airbnb and VRBO listings within a 3-mile radius, identifying gaps in amenities or underserved neighborhoods, while noting that Jackson's STR market is less saturated than Nashville, creating opportunities for well-positioned properties. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through West Tennessee real estate agents, while connecting with Jackson Chamber of Commerce for tourism data and monitoring seasonal demand patterns around university events, regional conferences at the Carl Perkins Civic Center, and summer tourism peaks to optimize investment timing and property selection.

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 $250 application fee. You'll also need to register with the Tennessee Department of Revenue for state sales tax collection and obtain a Jackson business license from the City Clerk's office for approximately $50. The Planning Commission will schedule a public hearing within 30-45 days of your complete application submission, and if approved, you must comply with Jackson's specific requirements including maximum occupancy limits based on bedrooms, adequate off-street parking (typically 2 spaces minimum), proper signage restrictions, noise ordinance compliance, and maintaining the property's residential character. The entire approval process typically takes 60-90 days from initial application to final permit issuance, and annual renewal is required with the business license department.

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 primarily allow short-term rentals in commercial and mixed-use districts, while residential areas may have limitations or require special permits. The city has implemented safety requirements including smoke detectors, carbon monoxide detectors, and fire extinguishers, along with occupancy limits based on property size. STR properties must maintain adequate parking and cannot exceed noise ordinances that could disturb neighboring residents. Jackson has also established registration requirements where operators must provide contact information and designate a local responsible party available 24/7 for any issues. Recent changes around 2022-2023 have strengthened enforcement mechanisms and clarified zoning compliance, with the city conducting periodic inspections to ensure adherence to health and safety standards. Violations can result in fines ranging from $50 to $500, and repeat offenders may face license revocation, making compliance essential for operators in Jackson's growing short-term rental market.

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 business travel to nearby corporate offices and government buildings. The Midtown/University area around Union University and Lane College offers strong rental demand from visiting families, prospective students, and academic conferences throughout the year. The North Jackson corridor along Highway 45 Bypass provides easy interstate access for business travelers visiting major employers like Procter & Gamble, Kellogg's, and regional medical facilities including West Tennessee Healthcare. The Bemis area offers affordable investment opportunities with proximity to Casey Jones Village, a popular tourist attraction, while the South Jackson neighborhoods near Jackson-Madison County General Hospital capture medical tourism and visiting healthcare professionals. These areas benefit from Jackson's position as a regional hub for agriculture, manufacturing, and healthcare, plus its location along Interstate 40 making it a convenient stopover for travelers between Nashville and Memphis.

Airbnb properties in Jackson, Tennessee are subject to both state and local lodging taxes. The Tennessee state sales tax rate of 7% applies to short-term rental accommodations, along with the state hotel occupancy tax of 1.5%, for a combined state rate of 8.5%. Madison County, where Jackson is located, imposes an additional local hotel/motel tax of 5%, bringing the total occupancy tax rate to approximately 13.5%. The City of Jackson may impose an additional local occupancy tax of up to 5%, potentially making the total rate around 18.5%. These taxes are typically collected by Airbnb directly from guests at the time of booking and remitted to the appropriate tax authorities on behalf of hosts through Airbnb's automated tax collection system, which began around 2019-2020 for Tennessee. Hosts may still need to register with the Tennessee Department of Revenue and local tax authorities depending on their booking volume and local requirements. Properties rented for 30 days or longer are generally exempt from occupancy taxes, and some jurisdictions may have minimum stay or revenue thresholds before tax obligations apply.

Starting an Airbnb in Jackson, Tennessee requires approximately $180,000-220,000 in total initial investment. Property purchase costs around $150,000 based on the median home price in Jackson as of 2023. Furnishing a 2-3 bedroom property typically runs $15,000-25,000 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 ($200-500), and potential HOA approvals. Insurance for short-term rentals costs approximately $1,200-2,000 annually, with an upfront payment of $300-500. Utility deposits and connections (electricity, water, gas, internet, cable) total around $500-800. First six months of operating costs including utilities ($150/month), cleaning services ($75 per turnover), maintenance reserves ($200/month), property management software ($50/month), and marketing expenses add approximately $4,500-6,000 to the startup budget.

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% of revenue), utilities ($150-250 monthly), insurance ($800-1,200 annually), and maintenance costs averaging $2,000-4,000 yearly. Properties near downtown Jackson or the University of Memphis at Lambuth campus command premium rates, with successful hosts like those operating renovated historic homes reporting profit margins of 25-35% after all expenses. Key success factors include professional photography, consistent 4.8+ star ratings, strategic pricing during events at the Carl Perkins Civic Center, and targeting the growing medical tourism market from Jackson-Madison County General Hospital. Properties within 10 minutes of Interstate 40 perform particularly well due to traveler convenience, with some hosts reporting occupancy rates of 65-75% annually. The market benefits from Jackson's position as a regional hub and limited hotel inventory, though hosts must account for Tennessee's 9.25% sales tax on short-term rentals and potential HOA restrictions in newer subdivisions.

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 attractions like Casey Jones Village and the West Tennessee Farmers Market tend to perform at the higher end of this range, while suburban properties average closer to 10-12% annual returns. Most investors achieve profitability within 18-24 months, with initial investment recovery timeframes of 6-8 years being common in this market. The Jackson market benefits from steady tourism related to its railroad history and proximity to Nashville (90 minutes) and Memphis (80 minutes), supporting average daily rates of $85-120 and occupancy rates of 65-75% for well-managed properties. Cash-on-cash returns are enhanced by relatively affordable property acquisition costs averaging $80,000-150,000 for suitable investment properties, though investors should budget for 15-20% of gross rental income for maintenance, cleaning, and platform fees to achieve these projected returns.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Jackson, Tennessee. Local real estate agents who focus on Airbnb investment properties in the Jackson area include Crye-Leike Realtors, which has been serving West Tennessee since 1977, and Keller Williams Realty with agents experienced in investment properties since the early 2000s. RE/MAX Real Estate Partners also has agents specializing in rental property investments in Jackson. National services include Mashvisor, founded in 2014, which provides Airbnb analytics and property search tools, and AirDNA, established in 2015, offering market data and investment analysis for short-term rentals. BiggerPockets, launched in 2004, connects investors with local professionals and provides educational resources. Awning, started in 2017, offers end-to-end Airbnb investment services including property identification and management. Local property management companies that can assist with Airbnb operations include Jackson Property Management Group and West Tennessee Property Solutions, both established in the 2010s to serve the growing short-term rental market in the region.