Is Knoxville, Tennessee Good for Airbnb Investment?

Potentially—Knoxville, Tennessee combines visitor demand with long-term real estate upside.

• Presents a promising opportunity given its growing tourism and relatively affordable property values.
• Current market conditions show a consistent increase in visitor numbers due to the city's appeal as a gateway to the Great Smoky Mountains, a vibrant downtown.
• These tourism trends contribute to a steady demand for short-term rentals.
• Property values in Knoxville remain more accessible compared to larger metropolitan areas, allowing for a lower barrier to entry for investors.
• The combination of sustained tourism growth, favorable property acquisition costs, and a strong rental market creates a solid investment potential for Airbnb operators seeking attractive returns.

$1,200–$3,500 per month based on location, season, and property quality.

• Based on available market data, Airbnb hosts in Knoxville, Tennessee typically earn between $1,200 to $3,500 per month.
• Seasonal variations show peak earnings during fall months when University of Tennessee football season and autumn tourism drive occupancy rates up by approximately 25-30%.
• Properties located within 3 miles of downtown or the university campus command premium rates of $85-150 per night compared to suburban locations averaging $60-95 per night.
• Key factors affecting earnings include proximity to major attractions like the Old City and Market Square, property size and amenities, with entire homes outperforming private rooms by roughly 40%.
• Annual occupancy rates in the market typically range from 60-75% for well-managed properties, with successful hosts maintaining consistent bookings through competitive pricing, professional photography.

Potentially strong—typical annual ROI is 8–15%.

• Typically generate ROI between 8-15% annually, with downtown and University of Tennessee area properties achieving the higher end due to consistent demand from students, football fans.
• The average payback period ranges from 7-12 years depending on property location and initial investment.
• Knoxville's Airbnb market benefits from year-round demand with peak seasons during UT football games and summer tourism.
• Short-term rentals in Knoxville outperform traditional rentals by approximately 2-6 percentage points in ROI, though they require more active management and face seasonal fluctuations.

Knoxville, Tennessee averages 65–70% annual occupancy, with seasonal variation.

• Airbnb occupancy rates in Knoxville, Tennessee average approximately 65-70% annually, with significant seasonal variations that peak during fall football season (September-November) at 80-85% due to University of Tennessee Volunteers games, and summer months (June-August) reaching 75-80% occupancy driven by tourism and outdoor activities in the nearby Great Smoky Mountains.
• Winter months typically see the lowest occupancy at 45-55%, while spring maintains moderate levels around 60-65%.
• Knoxville's annual average occupancy rate of 67% slightly exceeds Tennessee's statewide average of 63% and performs comparably to the national Airbnb average of 68%.

The strongest opportunities balance visitor demand, nightly rates, and acquisition cost.

• The best Airbnb investment neighborhoods in Knoxville include Downtown/Market Square, which offers prime proximity to the University of Tennessee, nightlife.
• The Old City provides excellent walkability to breweries, restaurants, and entertainment venues while maintaining lower property acquisition costs than downtown core areas.
• Sequoyah Hills attracts higher-end guests seeking upscale accommodations near the Tennessee River with beautiful historic homes that command premium nightly rates.
• Fourth and Gill appeals to visitors wanting a trendy, walkable neighborhood experience close to downtown with Victorian-era charm and proximity to local coffee shops and boutiques.
• Bearden offers family-friendly appeal with easy access to outdoor activities, shopping, and restaurants while providing more affordable entry points for investors.
• South Knoxville, particularly areas near the Urban Wilderness, capitalizes on the growing outdoor recreation tourism market with mountain biking, hiking.
• Fort Sanders, adjacent to the UT campus, provides consistent demand from visiting families, prospective students, and football game attendees.

Yes, but only where zoning permits short-term rentals and every required license is current.

• Knoxville, Tennessee requires short-term rental operators to obtain a business license and register their properties with the city.
• The city limits occupancy to two guests per bedroom plus two additional guests, with a maximum of 10 people total per property, and requires adequate parking spaces for guests.
• Owner-occupancy is not mandated for short-term rentals, allowing both hosted and non-hosted properties to operate legally.
• Zoning restrictions permit short-term rentals in most residential areas, though some historic districts and specific neighborhoods may have additional limitations or require special approval through the planning commission.
• The registration process involves submitting an application with property details, proof of insurance, emergency contact information, and passing health and safety inspections that cover smoke detectors.
• Recent changes implemented around 2020-2022 have strengthened enforcement mechanisms, increased penalties for non-compliance to $500-1000 per violation.

Tax rates vary by jurisdiction; licensing, inspection, and insurance costs are additional.

• Short-term rentals in Knoxville, Tennessee are subject to several fees and taxes including a state sales tax of 7%, Knox County local sales tax of 2.25%, and a state lodging tax of 3%.
• The City of Knoxville requires short-term rental operators to obtain a business license costing around $15-50 annually and register their property with an estimated registration fee of $100-200.
• Properties must also comply with fire safety inspections which typically cost $75-150 per inspection.
• Additionally, there may be a tourism development tax of 1-2% collected by Knox County, and operators are responsible for remitting all applicable taxes quarterly to the Tennessee Department of Revenue.