Is Johnson City, Tennessee Good for Airbnb Investment?

To start an Airbnb in Johnson City, Tennessee, begin by researching local zoning laws and regulations through the Johnson City Planning Department, as the city requires short-term rental permits and compliance with specific zoning districts that allow such operations. Contact the Johnson City Building Inspections Department to obtain necessary permits including a business license, short-term rental permit (approximately $100-200 annually), and ensure fire safety compliance with smoke detectors and carbon monoxide detectors in all sleeping areas. Find a suitable property in residential zones that permit short-term rentals, focusing on areas near East Tennessee State University or downtown Johnson City for higher demand, with properties typically ranging from $150,000-$300,000 depending on size and location. Furnish the space with essential amenities including comfortable bedding, kitchen appliances, WiFi, cable/streaming services, and local guidebooks highlighting attractions like the Blue Ridge Parkway and Appalachian Trail access points. Create your listing on Airbnb and VRBO platforms with professional photography, competitive pricing around $75-150 per night based on local market rates, and detailed descriptions emphasizing proximity to ETSU, downtown dining, and outdoor recreation. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating check-ins/check-outs, maintaining the property regularly, and ensuring compliance with Tennessee's 9.25% state sales tax plus local occupancy taxes that must be collected and remitted to Washington County and Johnson City authorities.

To identify profitable short-term rental properties in Johnson City, Tennessee, focus on locations within 2-3 miles of East Tennessee State University campus, downtown areas near restaurants and entertainment, and properties with mountain or scenic views given the region's proximity to the Appalachian Mountains. Target 2-4 bedroom properties with modern amenities, full kitchens, parking, and outdoor spaces like decks or patios that appeal to both university visitors and tourists exploring the area's natural attractions. Analyze pricing by researching comparable Airbnb and VRBO listings in Johnson City, aiming for properties that can generate $100-200 per night depending on size and location, with higher rates during ETSU events, graduation periods, and peak outdoor recreation seasons in spring and fall. Conduct competition research using AirDNA and STR analytics tools to identify market saturation levels, average occupancy rates (typically 60-75% in secondary markets like Johnson City), and seasonal demand patterns driven by university schedules and outdoor tourism. Utilize local resources including Johnson City MLS data, partner with realtors familiar with investment properties, monitor local regulations regarding short-term rentals, and leverage tools like Mashvisor, BiggerPockets market analysis, and local Facebook real estate investment groups to identify emerging neighborhoods and understand the specific dynamics of this East Tennessee market that benefits from both educational institution traffic and outdoor recreation tourism.

To obtain an Airbnb/STR permit in Johnson City, Tennessee, you must first contact the Johnson City Planning and Development Services Department at City Hall located at 601 East Main Street or call (423) 434-6000 to begin the application process. Required documents typically include a completed short-term rental permit application, proof of property ownership or lease agreement with landlord consent, certificate of occupancy, fire safety inspection certificate, general liability insurance policy (minimum $500,000), floor plan of the property, and valid Tennessee business license. The application fee is approximately $150-200 with an annual renewal fee of around $100-125, and you may need additional inspections costing $75-100 each. Submit your complete application package to the Planning Department, schedule required inspections for fire safety and building code compliance, and await approval which typically takes 30-45 business days. Johnson City specific requirements include maintaining occupancy limits based on bedroom count, providing adequate parking spaces (typically one space per bedroom), ensuring proper trash collection arrangements, maintaining a local contact person available 24/7, posting the permit number visibly on the property, and complying with noise ordinances and neighborhood compatibility standards. Once approved, you must renew annually and maintain compliance with all city regulations including regular inspections and adherence to zoning restrictions.

Short-term rentals (STRs) are legal in Johnson City, Tennessee, but operate under specific regulations established by the city. As of 2023, Johnson City requires STR operators to obtain a business license and comply with zoning restrictions that primarily limit short-term rentals to commercial and mixed-use districts, while generally prohibiting them in residential neighborhoods zoned R-1 and R-2. The city implemented these regulations around 2019-2020 following concerns about neighborhood character and housing availability. Current restrictions include occupancy limits based on property size, parking requirements, noise ordinances, and mandatory registration with the city's planning department. Properties must also meet safety standards including smoke detectors, carbon monoxide detectors, and fire extinguishers. Johnson City has been relatively restrictive compared to other Tennessee cities, focusing on concentrating STRs in appropriate commercial zones rather than allowing widespread residential conversions, and the city continues to monitor and adjust these regulations based on community impact and housing market conditions.

The best Airbnb investment areas in Johnson City, Tennessee include the Downtown Historic District, which attracts visitors to East Tennessee State University events, local festivals, and business travelers to the medical district; the Tree Streets neighborhood (Maple, Pine, Walnut areas) offering charming historic homes near downtown amenities and ETSU campus; the Milligan Highway corridor providing easy access to both downtown and outdoor recreation areas like Roan Mountain State Park; the Medical District area near Johnson City Medical Center and ETSU Quillen College of Medicine, ideal for medical professionals and visiting families; and neighborhoods near Buffalo Mountain Park and Winged Deer Park that appeal to outdoor enthusiasts visiting for hiking, mountain biking, and the annual Blue Plum Festival. These areas benefit from consistent demand from university visitors, medical tourism, outdoor recreation seekers, and the growing arts and music scene, with properties typically generating strong occupancy rates due to Johnson City's position as a regional hub for healthcare, education, and Appalachian tourism.

Airbnb properties in Johnson City, Tennessee are subject to multiple lodging taxes including the Tennessee state sales tax of 7%, a state hotel occupancy tax of 2.75%, and a local hotel/motel tax of 5% imposed by Johnson City, resulting in a combined tax rate of approximately 14.75% on short-term rental accommodations. 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, and the platform remits these taxes quarterly to the Tennessee Department of Revenue and applicable local authorities. Property owners who collect taxes independently must register with the Tennessee Department of Revenue, obtain the necessary permits from Johnson City, file monthly returns by the 20th of the following month, and remit collected taxes accordingly. Exemptions generally apply to stays exceeding 30 consecutive days, which are considered long-term rentals rather than transient accommodations, and certain government or non-profit organization bookings may qualify for exemptions with proper documentation, though hosts should verify current exemption criteria as regulations can change and enforcement has increased significantly since 2019.

The total cost to start an Airbnb in Johnson City, Tennessee is approximately $185,000-$220,000. Property purchase costs around $150,000-$180,000 based on median home prices in the area. Furnishing a 2-3 bedroom property requires $8,000-$12,000 for beds, sofas, dining sets, appliances, linens, and decor to create an attractive rental space. Initial setup costs including professional photography, listing creation, welcome materials, and basic supplies total $1,500-$2,500. Permits and fees vary but expect $300-$800 for business licenses, short-term rental permits, and city registration requirements. Insurance specifically for short-term rentals costs $1,200-$2,000 annually, significantly higher than standard homeowner's insurance. Utilities including electricity, water, internet, cable, and trash service average $200-$300 monthly or $1,200-$1,800 for six months. First six months operating costs including cleaning services ($100-$150 per turnover), maintenance, restocking supplies, platform fees (3% of bookings), and marketing total approximately $3,000-$5,000 depending on occupancy rates and property condition.

Airbnb properties in Johnson City, Tennessee typically generate annual revenues between $15,000-$35,000 for entire homes, with average daily rates ranging from $75-$120 depending on proximity to East Tennessee State University and downtown attractions. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($25-40 per turnover), utilities ($150-250 monthly), property management (10-20% of revenue), insurance ($800-1,200 annually), and maintenance costs averaging $2,000-4,000 yearly. Properties near ETSU campus and downtown areas achieve 60-75% occupancy rates with profit margins of 25-35%, while suburban locations typically see 45-60% occupancy with 15-25% margins. Success factors include strategic location within 2 miles of university or downtown, competitive pricing during peak periods like graduation and football season, professional photography, and responsive guest communication. A typical 3-bedroom home purchased for $180,000 and generating $28,000 annually in gross revenue can yield net profits of $8,000-12,000 after expenses, representing a 4.4-6.7% return on investment before considering property appreciation, with properties in the Tree Streets historic district and areas near Founders Park consistently outperforming the market average.

Airbnb investments in Johnson City, Tennessee typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-15%, driven by the city's proximity to East Tennessee State University and outdoor recreation areas like the Appalachian Trail. Properties near downtown or ETSU campus command average daily rates of $85-120, with occupancy rates of 65-75% annually, while initial investment costs average $150,000-250,000 for suitable 2-3 bedroom properties. Investors can expect to reach profitability within 18-24 months, with gross rental yields of 10-14% annually, though seasonal fluctuations occur with peak performance during university academic periods and summer hiking seasons. The market benefits from limited hotel inventory and growing medical tourism related to ETSU's health programs, supporting consistent demand and rental rate growth of 3-5% annually since 2019.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors in Johnson City, Tennessee. Local real estate agents who focus on Airbnb investment properties in the area include Keller Williams Realty, RE/MAX, and Coldwell Banker, with agents like those at The Real Estate Firm and Century 21 Legacy having experience with vacation rental investments. National services that help investors find profitable Airbnb properties include Mashvisor, which provides rental property analytics, AirDNA for market data and revenue projections, and Awning for short-term rental investment guidance. BiggerPockets also offers resources and connections for real estate investors, while companies like Vacasa and RedAwning provide property management services that can help investors evaluate potential returns. Local property management companies such as East Tennessee Property Management and Smoky Mountain Vacation Rentals can provide insights into the Johnson City market and help investors understand the profitability potential of specific properties in the area.