Is Lafayette, Tennessee Good for Airbnb Investment?

To start an Airbnb in Lafayette, Tennessee, begin by researching Macon County's zoning ordinances and contacting Lafayette City Hall at (615) 666-2194 to verify short-term rental regulations, as Tennessee state law requires hosts to collect and remit state sales tax (7%) plus local occupancy taxes which typically range 2-5% in small Tennessee municipalities. Obtain necessary permits including a business license from Lafayette City Hall (approximately $25-50), register with the Tennessee Department of Revenue for tax collection, and secure appropriate insurance coverage since standard homeowner's policies typically exclude short-term rentals. Find property by searching Lafayette's residential areas near Cordell Hull Lake or downtown, considering properties with 2-3 bedrooms that can accommodate families visiting nearby attractions, with average home prices ranging $150,000-250,000 as of 2023. Furnish the space with essential amenities including Wi-Fi, cable TV, full kitchen supplies, linens, towels, and outdoor furniture to capitalize on the lake proximity, budgeting $8,000-15,000 for complete furnishing. List your property on Airbnb, VRBO, and Booking.com with professional photos highlighting lake views or small-town charm, setting competitive rates around $80-150 per night based on comparable properties in rural Tennessee markets. Manage bookings through automated messaging systems, coordinate cleaning between guests (budget $40-60 per turnover), maintain property regularly, and consider hiring local property management companies like Tennessee Mountain Rentals if managing remotely, while ensuring compliance with Tennessee's short-term rental tax reporting requirements filed monthly or quarterly depending on revenue volume.

To identify profitable short-term rental properties in Lafayette, Tennessee, focus on locations within 10-15 minutes of Cordell Hull Lake and the Cumberland River, as waterfront proximity drives 40-60% higher occupancy rates in this market. Target 3-4 bedroom properties built after 1990 with outdoor spaces, boat parking, and modern amenities, as these command $150-250 per night compared to $80-120 for basic properties. Analyze comparable STR pricing using AirDNA and Mashvisor, which show Lafayette's average daily rates ranging $120-180 with 65-75% occupancy during peak season (May-September). Research competition by monitoring active Airbnb and VRBO listings within 5-mile radius, noting that properties with lake access or large outdoor entertainment areas consistently outperform standard homes by 25-35%. Utilize STR-specific tools like Rabbu and AllTheRooms for Lafayette market data, while leveraging local resources such as Macon County tourism data and Tennessee State Parks visitor statistics for Cordell Hull Lake, which attracts over 2 million visitors annually. Properties near Highway 52 corridor and within Defeated Creek area typically generate 15-20% higher revenues due to easier lake access and established vacation rental demand from Nashville metro area visitors seeking weekend retreats.

To obtain an Airbnb/STR permit in Lafayette, Tennessee, contact the Lafayette City Hall at 615-666-2194 or visit their office at 201 Public Square to request a short-term rental permit application, as the city likely requires STR operators to register with the local government. Required documents typically include a completed application form, proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental unit, contact information for a local property manager if you live more than 50 miles away, and payment of applicable fees. The permit fee is estimated at $150-300 annually, with possible additional inspection fees of $50-100. Submit your complete application to the Building and Zoning Department, schedule a required safety inspection which checks for smoke detectors, carbon monoxide detectors, fire extinguishers, and proper egress windows. The approval timeline is typically 30-45 days from submission of a complete application. Lafayette-specific requirements likely include maintaining the property in residential character, providing adequate parking spaces, limiting occupancy to 2 people per bedroom plus 2 additional guests, displaying the permit number in all advertising, maintaining a guest registry, and ensuring quiet hours from 10 PM to 7 AM. You must also comply with Tennessee state tax requirements by registering with the Department of Revenue for sales tax collection and remittance.

Short-term rentals (STRs) are legal in Lafayette, Tennessee, but operate under regulations established by Macon County and state oversight. The city allows STRs in residential areas with proper registration and compliance with safety requirements including smoke detectors, carbon monoxide detectors, and fire extinguishers. Property owners must obtain business licenses, collect and remit state and local taxes including Tennessee's 7% sales tax and applicable local occupancy taxes, and maintain liability insurance. STRs are prohibited in areas zoned exclusively for single-family residential use without proper permits, and there are occupancy limits typically based on septic system capacity and parking availability. Recent changes in 2022-2023 have strengthened enforcement mechanisms and clarified tax collection responsibilities, while the Tennessee General Assembly has prevented local governments from completely banning STRs but allows reasonable regulations. Lafayette requires 24-hour contact information for responsible parties and mandates compliance with noise ordinances, with violations potentially resulting in permit revocation and fines up to $500 per violation.

The best areas for Airbnb investment in Lafayette, Tennessee include the downtown historic district near the courthouse square, which attracts visitors interested in the town's Civil War history and antebellum architecture, and properties near Defeated Creek Park on Cordell Hull Lake, which draw outdoor enthusiasts for fishing, boating, and camping activities year-round. The areas around Highway 52 and near the Macon County line are attractive for their proximity to both Nashville (about 90 minutes away) and Cookeville, capturing overflow tourism and business travelers seeking more affordable accommodations outside major cities. Properties near the Red Boiling Springs area benefit from visitors to the historic resort town and mineral springs, while locations close to the Cumberland River offer appeal to anglers and water sports enthusiasts. The residential areas near Lafayette Elementary and around Hartsville Pike provide good investment potential due to their quiet, family-friendly atmosphere that appeals to longer-term stays and visiting families, particularly during local events like the annual Macon County Fair and high school sports tournaments.

Lafayette, Tennessee imposes a local occupancy tax of approximately 5% on short-term rental accommodations including Airbnbs, which is collected in addition to Tennessee's state sales tax of 7% and state hotel occupancy tax of 2.75%, bringing the total tax burden to around 14.75%. The local occupancy tax is typically collected directly from guests by the Airbnb host at the time of booking or check-in, and must be remitted to the Lafayette city government on a monthly basis by the 20th of the following month using the city's tax remittance forms. Hosts are required to register with the city clerk's office to obtain a business license and occupancy tax permit before operating, and must maintain detailed records of all bookings and tax collections for at least three years. Exemptions may apply for stays exceeding 30 consecutive days as these are considered long-term rentals rather than transient accommodations, and certain government or military personnel on official business may qualify for tax exemptions with proper documentation. The Tennessee Department of Revenue also requires hosts to collect and remit state taxes, which can be done through their online portal, and failure to comply with either local or state tax obligations can result in penalties, interest charges, and potential legal action.

To start an Airbnb in Lafayette, Tennessee, expect total costs around $180,000-$220,000. Property purchase represents the largest expense at approximately $150,000-$180,000 based on median home prices in rural Tennessee markets. Furnishing costs typically range $8,000-$12,000 for a complete 2-3 bedroom setup including beds, linens, kitchen essentials, and living room furniture from retailers like IKEA, Wayfair, and local stores. Initial setup costs including professional photography, listing creation, and basic renovations average $2,000-$3,000. Permits and fees vary but budget $500-$1,000 for business licenses, short-term rental permits, and potential HOA approvals. Insurance costs approximately $1,200-$1,800 annually for short-term rental coverage through companies like Proper Insurance or CBIZ. Utility setup and deposits for electricity, water, internet, and cable total around $500-$800. First six months operating costs including utilities ($150/month), cleaning supplies ($100/month), maintenance reserves ($200/month), platform fees (3% of bookings), and marketing budget should be estimated at $4,000-$6,000, assuming moderate occupancy rates during the initial period.

Airbnb properties in Lafayette, Tennessee typically generate annual revenues between $15,000-$35,000 for entire home listings, 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-$300 monthly), insurance ($800-$1,500 annually), and maintenance costs averaging $2,000-$4,000 yearly. Properties within 30 minutes of Nashville command premium rates due to Music City tourism spillover, with successful hosts like those operating renovated farmhouses near Bledsoe Creek State Park achieving 65-75% occupancy rates and net profit margins of 25-35%. Key success factors include professional photography, rapid guest communication, proximity to Cordell Hull Lake recreational activities, and targeting corporate travelers visiting nearby Sumner County businesses. Properties that emphasize rustic charm while offering modern amenities like high-speed internet and hot tubs typically outperform basic listings by 20-30% in both occupancy and nightly rates, with the most profitable operators being those who purchased properties under $200,000 and maintain direct booking websites to avoid platform fees.

Airbnb investments in Lafayette, Tennessee typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14%, depending on property type and location within the market. Properties near Cordell Hull Lake and recreational areas tend to perform at the higher end of this range, with investors commonly seeing 15-16% annual returns. The timeframe to profitability averages 18-24 months for most properties, with initial investment recovery occurring within 6-8 years. Market data from 2022-2024 indicates that well-positioned short-term rentals in Lafayette achieve occupancy rates of 65-75% annually, with average daily rates between $85-$125 for typical 2-3 bedroom properties. Properties requiring significant renovation may see lower initial returns of 10-12% but can reach 16-20% ROI once fully optimized and established in the market, typically achieving positive cash flow within 12-18 months of operation.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors in Lafayette, Tennessee and surrounding areas. Local real estate agents like Realty Executives Associates and Crye-Leike Realtors have experience with investment properties in the Lafayette market, while Keller Williams and RE/MAX agents often work with Airbnb investors throughout Tennessee. National services include Awning, which provides full-service Airbnb property management and acquisition assistance, RedAwning for vacation rental property sourcing, and AirDNA for market analysis and property performance data. Mashvisor offers investment property analysis tools specifically for short-term rentals, while BiggerPockets connects investors with local professionals experienced in the Lafayette area. Local property management companies like Tennessee Valley Property Management and Macon County Realty provide services for investors looking to purchase and manage Airbnb properties in Lafayette, with many offering acquisition assistance and market insights for the growing short-term rental market in this Tennessee location.