Is Jellico, Tennessee Good for Airbnb Investment?

To start an Airbnb in Jellico, Tennessee, begin by researching local regulations through the Jellico City Hall and Campbell County offices, as Tennessee generally allows short-term rentals but municipalities may have specific requirements including business licenses, occupancy permits, and zoning compliance. Contact the Jellico Building Department at (423) 784-3342 to obtain necessary permits such as a business license (approximately $25-50), rental permit if required, and ensure fire safety compliance. Find a suitable property by searching local real estate listings through agents familiar with Jellico's market, focusing on areas near Cove Lake State Park or historic downtown, with properties typically ranging from $80,000-150,000 for suitable homes. Furnish the property with essential amenities including quality bedding, kitchen supplies, WiFi, and local touches highlighting Jellico's railroad history and proximity to Cumberland Gap. Create your Airbnb listing with professional photos showcasing mountain views and outdoor activities, set competitive pricing around $75-125 per night based on local market research, and emphasize attractions like Cove Lake State Park and Cumberland Gap National Historical Park. Manage your property by establishing cleaning protocols between guests, maintaining responsive communication, coordinating with local cleaning services in the Jellico area, and ensuring compliance with Tennessee's 9.25% sales tax collection requirements for short-term rentals while monitoring occupancy rates and guest reviews to optimize your listing performance.

To identify profitable short-term rental properties in Jellico, Tennessee, focus on properties within 2-3 miles of Cove Lake State Park and near Highway 25W for easy access, as this small town of approximately 2,300 residents attracts visitors primarily for outdoor recreation and its proximity to the Kentucky border. Target 2-4 bedroom homes or cabins with outdoor amenities like fire pits, decks, or lake views, ensuring properties have reliable internet, updated kitchens, and parking for multiple vehicles since guests often travel in groups for fishing, hiking, and family gatherings. Analyze comparable properties within a 15-mile radius including nearby Caryville and LaFollette, with nightly rates typically ranging $80-150 depending on size and amenities, while calculating potential annual revenue of $15,000-35,000 against purchase prices averaging $80,000-180,000 for suitable properties. Research competition using AirDNA, Mashvisor, and direct searches on Airbnb and VRBO to identify the limited existing inventory of 10-20 active STRs in the immediate area, noting seasonal demand peaks during summer months and hunting season. Utilize tools like BiggerPockets for market analysis, contact local realtors familiar with Campbell County investment properties, verify zoning compliance with Jellico city officials since STR regulations may be minimal but evolving, and consider properties near Norris Dam State Park approximately 30 minutes away to capture overflow demand from that more established tourist destination.

To obtain an Airbnb/STR permit in Jellico, Tennessee, contact the Jellico City Hall at 145 Main Street or call (423) 784-3342 to inquire about short-term rental licensing requirements, as the city likely requires a business license and may have specific STR regulations. You'll typically need to submit a completed business license application, proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental property, and contact information for a local property manager if you're not residing locally. The application fee is estimated at $50-150 annually, with possible additional inspection fees of $75-100. Required documents should include a completed STR permit application, Tennessee sales tax permit, proof of compliance with fire safety codes, maximum occupancy plan, parking availability confirmation, and neighbor notification affidavit. The approval timeline typically takes 2-4 weeks after submitting complete documentation, though initial inspections may extend this period. Jellico likely requires compliance with residential zoning restrictions, minimum parking spaces (usually 1-2 per unit), 24-hour local contact availability, guest registration logs, and adherence to noise ordinances, with properties potentially limited to specific zoning districts and subject to annual renewal requirements.

Short-term rentals (STRs) are generally legal in Jellico, Tennessee, as the city has not enacted specific prohibitive ordinances against vacation rentals as of 2024. However, STR operators must comply with Tennessee state regulations including obtaining proper business licenses, collecting and remitting state and local taxes, and meeting safety requirements. Jellico follows Campbell County's broader regulatory framework, which typically requires STRs to register with the county, maintain liability insurance, and adhere to occupancy limits and noise ordinances. The city has not designated specific prohibited areas for STRs, though properties must comply with existing zoning regulations that may restrict commercial activities in certain residential zones. Recent changes at the state level in 2022-2023 have strengthened local governments' ability to regulate STRs while preventing outright bans, meaning Jellico could potentially implement more specific regulations in the future. Property owners should verify current licensing requirements with both the City of Jellico and Campbell County, as enforcement of tax collection and safety standards has increased statewide, and operators must ensure compliance with fire safety codes and maximum occupancy rules regardless of local ordinance specificity.

The best areas for Airbnb investment in Jellico, Tennessee include the historic downtown district near Main Street, which attracts visitors interested in the town's coal mining heritage and proximity to Cumberland Gap National Historical Park. The residential neighborhoods along Highway 25W offer convenient access for travelers heading to the Great Smoky Mountains and provide easy interstate connectivity for business travelers visiting regional industries. Areas near Cove Lake State Park, though technically across the border in nearby Caryville, draw outdoor enthusiasts year-round for fishing, hiking, and camping activities. The neighborhoods close to the Norfolk Southern Railway corridor can appeal to railroad enthusiasts and workers, while properties near the Tennessee-Kentucky border benefit from cross-state tourism and visitors to Cumberland Falls State Resort Park. These locations capitalize on Jellico's position as a gateway community between Tennessee and Kentucky, outdoor recreation tourism, regional business travel, and the area's historical significance in Appalachian culture and coal mining history.

Airbnb properties in Jellico, Tennessee are subject to Tennessee state sales tax of 7% and state lodging tax of 2.75%, totaling 9.75% in state taxes on short-term rental accommodations. Campbell County, where Jellico is located, imposes an additional local hotel/motel tax of 5%, bringing the total occupancy tax rate to approximately 14.75%. 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 2017-2018. Airbnb remits the collected taxes directly to the Tennessee Department of Revenue monthly, though individual hosts may still need to register with the state and county if they have additional tax obligations. The city of Jellico may have its own local occupancy tax ordinances that could add 1-3% to the total rate. Exemptions generally apply to stays exceeding 30 consecutive days, which are considered long-term rentals rather than short-term accommodations, and certain government or non-profit related stays may qualify for exemptions with proper documentation.

The total cost to start an Airbnb in Jellico, Tennessee is approximately $85,000-$105,000. Property purchase costs around $65,000-$80,000 based on median home prices in this rural Appalachian town. Furnishing a 2-3 bedroom property requires $8,000-$12,000 for beds, linens, kitchen essentials, living room furniture, and appliances. Initial setup including professional photography, listing creation, and basic renovations costs $2,000-$3,000. Permits and fees total $500-$800 covering business license, short-term rental permit, and tax registration with Campbell County. Insurance including liability and property coverage runs $1,200-$1,800 annually. Utility deposits and connections for electricity, water, internet, and cable cost $800-$1,200. First six months operating costs including utilities ($600/month), cleaning supplies ($100/month), maintenance reserves ($200/month), marketing ($150/month), and platform fees average $6,300 total, bringing the complete startup investment to approximately $84,800-$104,800 depending on property condition and furnishing choices.

Airbnb properties in Jellico, Tennessee typically generate modest returns with average daily rates ranging from $65-85 due to the town's small size and limited tourist infrastructure, though properties near Cove Lake State Park or positioned as gateway stops to Cumberland Gap National Historical Park can command higher rates of $90-120 during peak seasons. Revenue potential averages $15,000-25,000 annually for well-managed properties, while expenses including mortgage, utilities, cleaning, maintenance, and Airbnb fees typically consume 60-75% of gross revenue, leaving profit margins of 25-40% for debt-free properties. Success factors include proximity to outdoor recreation areas, competitive pricing against the limited hotel options in nearby Williamsburg or LaFollette, and targeting guests visiting the national park or traveling between Knoxville and Lexington. Properties that emphasize rustic charm, outdoor amenities, and easy interstate access via I-75 tend to achieve 65-75% occupancy rates, while those lacking these features struggle with 35-45% occupancy, making location and positioning critical for profitability in this small Appalachian market where tourism is primarily drive-through traffic rather than destination-based.

Based on Jellico, Tennessee market conditions, Airbnb investments typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14% depending on property type and location within the area. Properties near Cove Lake State Park and along Highway 25W corridor tend to perform at the higher end of this range due to tourist traffic and outdoor recreation demand. Initial profitability usually occurs within 8-14 months of operation, with break-even on total investment typically achieved in 6-8 years. Average daily rates in Jellico range from $75-120 for 2-3 bedroom properties, with occupancy rates averaging 45-65% annually, higher during summer months and hunting seasons. Properties requiring minimal renovation and positioned for outdoor enthusiasts visiting Daniel Boone National Forest and Cumberland Gap areas show the strongest performance metrics, with some investors reporting cash-on-cash returns exceeding 15% when leveraging 75-80% financing on well-located properties under $150,000.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties in Jellico, Tennessee, offering comprehensive market analysis and property recommendations. Local real estate agents serving the Jellico area include Coldwell Banker Wallace & Wallace Realtors, Century 21 Four Seasons Realty, and RE/MAX Real Estate Executives, with agents like those at Weichert Realtors specializing in investment properties. National services include Awning (formerly RedAwning) which provides full-service Airbnb property management and acquisition assistance, Mashvisor offering real estate analytics and investment property search tools, and AirDNA providing short-term rental market data and insights. Additional companies serving the East Tennessee region include Tennessee Mountain Realty, Realty Executives Associates, and local property management firms like East Tennessee Property Management that can assist with both acquisition and ongoing Airbnb operations in the Jellico market, which benefits from proximity to Cove Lake State Park and the Cumberland Gap area tourism corridor.