Is Kingsport, Tennessee Good for Airbnb Investment?

To start an Airbnb in Kingsport, Tennessee, begin by researching local zoning laws and regulations through the Kingsport Planning Department, as the city requires short term rental operators to obtain a business license and comply with residential zoning restrictions that may limit rentals in certain neighborhoods.

Launch checklist

• Contact the Kingsport Building Services Department to secure necessary permits, including a Certificate of Occupancy if required, and ensure your property meets fire safety codes and building standards.
• Find a suitable property in permitted zones, focusing on areas near downtown Kingsport or tourist attractions like Bays Mountain Park, with properties typically ranging from $150,000 to $300,000 for investment purposes.
• Furnish the space with quality furniture, linens, and amenities including WiFi, kitchen essentials, and local guidebooks, budgeting approximately $15,000 to $25,000 for a complete setup.
• Create your Airbnb listing with professional photos highlighting unique features and proximity to local attractions like the Kingsport Carousel and Riverwalk, setting competitive rates around $75 to $125 per night based on local market analysis.
• Manage your property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating key exchanges or installing smart locks.

To identify profitable short term rental properties in Kingsport, Tennessee, focus on locations near Bays Mountain Park, downtown Kingsport's revitalized areas, and properties within 15 minutes of major employers like Eastman Chemical Company and Holston Valley Medical Center.

What to prioritize

• Target 2 to 4 bedroom homes or condos built after 1990 with modern amenities, outdoor spaces, and parking, as Kingsport visitors often travel in groups for outdoor activities or extended business stays.
• Conduct pricing analysis using AirDNA and Mashvisor to benchmark against the $80 to 120 nightly rate range typical for the market, ensuring your all in costs allow for 15 to 20% net returns after accounting for Tennessee's 9.25% sales tax on STR bookings.
• Research competition by analyzing existing Airbnb and VRBO listings within a 3 mile radius, identifying gaps in amenities or underserved areas near attractions like Warriors' Path State Park or the Kingsport Aquatic Center.
• Utilize STR specific tools like Rabbu and PriceLabs for dynamic pricing, partner with local property management companies familiar with Kingsport's seasonal patterns (peak summer/fall for outdoor activities), and leverage the Sullivan County tourism board's data on visitor trends.

To obtain an Airbnb/STR permit in Kingsport, Tennessee, you must first contact the Kingsport Planning and Development Department at City Hall located at 1515 Warehouse Row to determine if short term rentals are permitted in your specific zoning district, as the city requires compliance with local zoning ordinances.

Documents and approvals

• You'll need to submit an application for a business license through the City Clerk's office, providing required documents including proof of property ownership or lease agreement, liability insurance certificate (minimum $1 million coverage), floor plan of the rental unit.
• The business license fee is approximately $50 to 75 annually, and you may need additional permits such as a Certificate of Occupancy if modifications were made to the property.
• You must also register with the Tennessee Department of Revenue for state tax collection purposes and obtain a sales tax permit, as STRs are subject to state and local occupancy taxes.
• The approval timeline typically takes 2 to 4 weeks once all documentation is submitted, and properties must comply with fire safety codes, maintain maximum occupancy limits based on square footage and bedrooms, provide adequate parking (typically one space per bedroom).
• Annual renewal is required, and the city may conduct periodic inspections to ensure ongoing compliance with safety and zoning requirements.

Short term rentals (STRs) are legal in Kingsport, Tennessee, but operate under specific regulations established by the city.

Core operating requirements

• Kingsport requires STR operators to obtain a business license and comply with zoning restrictions that primarily allow STRs in commercial and mixed use districts, while residential areas have more limited permissions typically requiring conditional use permits.
• The city has implemented occupancy limits, parking requirements, and noise ordinances to address neighborhood concerns.
• Properties must meet safety standards including smoke detectors and emergency egress requirements.
• Recent changes around 2022 to 2023 included stricter enforcement of existing regulations and enhanced complaint procedures for residents.
• STRs are prohibited in certain residential zones without proper permits, and the city maintains the right to revoke licenses for repeated violations.
• Operators must also collect and remit local occupancy taxes, and properties are subject to regular inspections to ensure compliance with health and safety codes.

The best areas for Airbnb investment in Kingsport, Tennessee include the Historic Downtown District, which attracts visitors to the Kingsport Farmers Market, cultural events, and business travelers to nearby Eastman Chemical Company headquarters; the Bays Mountain area.

In Kingsport, Tennessee, Airbnb hosts are subject to both state and local lodging taxes.

Taxes and filing responsibilities

• The Tennessee state hotel occupancy tax is 7% on gross rental receipts, which Airbnb typically collects and remits directly to the Tennessee Department of Revenue for stays booked through their platform.
• Additionally, Kingsport imposes a local hotel/motel tax of approximately 5% on short term rental accommodations, bringing the total occupancy tax to around 12%.
• For the local portion, hosts may need to register with the City of Kingsport and remit taxes monthly or quarterly depending on volume, though some booking platforms handle this collection automatically.
• The city also requires short term rental operators to obtain a business license and may impose additional regulatory fees.
• Sales tax of 9.25% (combining state and local rates) also applies to the rental amount.
• Exemptions typically include stays of 30 days or longer, which are considered long term rentals in preference to transient accommodations, and certain government or non profit related stays may qualify for exemptions with proper documentation.

To start an Airbnb in Kingsport, Tennessee, expect total costs around $180,000 to $220,000.

Cost breakdown

• Property purchase represents the largest expense at approximately $150,000 based on median home prices in the area as of 2023.
• Furnishing costs typically range $15,000 to $25,000 for a complete 2 to 3 bedroom setup including furniture, appliances, linens, and decor to create an attractive rental space.
• Initial setup costs including professional photography, listing creation, and basic renovations average $3,000 to $5,000.
• Permits and fees vary but budget $500 to $1,500 for business licenses, short term rental permits, and any required inspections depending on local Kingsport regulations.
• Insurance costs run $1,200 to $2,000 annually for landlord and short term rental coverage.
• Utility setup and deposits total approximately $500 to $800 for electricity, water, gas, internet, and cable services.
• First six months operating costs including utilities ($600 to $900 monthly), cleaning services ($100 to $150 per turnover), maintenance reserves, property management software subscriptions.

Airbnb properties in Kingsport, Tennessee typically generate annual revenues between $15,000 to $35,000 for entire homes, with average daily rates ranging from $65 to $120 depending on property size and amenities.

Profitability indicators

• Operating expenses generally consume 40 to 60% of gross revenue, including cleaning fees ($25 to $40 per turnover), utilities ($150 to $250 monthly), property management (10 to 20% of revenue), insurance ($800 to $1,500 annually).
• Net profit margins typically range from 15 to 35% for well managed properties, with successful hosts achieving higher margins through strategic pricing during peak seasons like summer months and local events at nearby Dollywood or Bristol Motor Speedway.
• Properties within 10 miles of downtown Kingsport or near Bays Mountain Park tend to perform better, with some hosts reporting occupancy rates of 60 to 75% annually.
• Success factors include professional photography, responsive communication, consistent 4.8+ star ratings, and targeting business travelers visiting Eastman Chemical Company or other local industries.

Based on Kingsport, Tennessee market conditions, Airbnb investments typically generate annual ROI of 8 to 12% with cash on cash returns ranging from 6 to 10% depending on property type and location within the market.

Return planning figures

• Properties in downtown Kingsport or near Bays Mountain Park tend to achieve higher occupancy rates of 65 to 75% annually, while suburban locations average 50 to 65% occupancy.
• Initial profitability usually occurs within 18 to 24 months for well positioned properties, with average daily rates ranging from $85 to $125 for entire homes and $45 to $75 for private rooms.
• The market benefits from proximity to Bristol Motor Speedway, Dollywood (90 minutes), and Great Smoky Mountains National Park, driving consistent tourism demand.
• Operating expenses typically consume 35 to 45% of gross rental income, including cleaning fees, utilities, maintenance, and platform commissions.
• Properties purchased below $150,000 with 20 to 25% down payments show the strongest cash on cash performance, while higher end properties above $200,000 may require 3 to 4 years to achieve optimal returns due to increased carrying costs and market positioning challenges in this smaller Tennessee market.

STRSearch is a leading national platform that specializes in identifying profitable short term rental properties for investors in Kingsport, Tennessee.

Companies and resources

• Local real estate agents like Keller Williams Tri Cities and RE/MAX Partners have agents experienced in investment properties and vacation rentals in the Kingsport area.
• National services include AirDNA for market analysis and revenue projections, Mashvisor for property analytics, and BiggerPockets for connecting with local investors and agents.
• Vacasa and RedAwning offer property management services that can help investors identify profitable properties in their networks.
• Local companies such as Tennessee Valley Realty and Century 21 Legacy have agents familiar with the Kingsport market and investment opportunities.
• Additional national platforms like Roofstock, which expanded into short term rental investments around 2021, and AvantStay, which focuses on group bookings, can provide insights into the Kingsport market.
• Local property management companies like East Tennessee Property Management may also assist investors in identifying suitable properties and understanding local regulations affecting short term rentals in Kingsport.