Is LaFollette, Tennessee Good for Airbnb Investment?

To start an Airbnb in LaFollette, Tennessee, begin by researching local regulations through Campbell County and the City of LaFollette, as Tennessee generally allows short-term rentals but local municipalities may have specific requirements including business licenses, occupancy permits, and zoning compliance. Contact LaFollette City Hall at (423) 562-2544 to obtain necessary permits, which typically include a business license ($25-50 annually) and potentially a short-term rental permit if required by local ordinance. Find a suitable property by searching areas near Cove Lake State Park or downtown LaFollette, considering properties with 2-3 bedrooms that can accommodate families visiting the lake or outdoor attractions, with average home prices ranging $80,000-150,000 as of 2023. Furnish the property with essential amenities including comfortable beds, full kitchen appliances, WiFi, cable TV, linens, towels, and outdoor furniture if applicable, budgeting approximately $8,000-15,000 for complete furnishing. List your property on Airbnb and VRBO platforms with professional photos highlighting lake proximity and outdoor activities, setting competitive rates around $75-125 per night based on local market analysis. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating key exchanges or installing smart locks, maintaining the property regularly, and ensuring compliance with Tennessee's 9.25% sales tax on short-term rentals plus any applicable local occupancy taxes that Campbell County may impose.

To identify profitable short-term rental properties in LaFollette, Tennessee, focus on locations within 1-2 miles of Norris Dam State Park and Cove Lake State Park, as these outdoor recreation areas drive consistent tourist traffic year-round. Target 2-4 bedroom cabins or lake houses with amenities like hot tubs, fire pits, boat docks, and scenic water or mountain views, as these features command premium rates of $150-300 per night in the LaFollette market. Analyze comparable properties on Airbnb and VRBO within a 10-mile radius, noting that successful STRs typically achieve 60-75% occupancy rates with average daily rates 20-30% higher than traditional long-term rental income. Research competition by monitoring listings near Norris Lake, Big South Fork, and Cove Creek, identifying gaps in amenities or underpriced properties that could be optimized. Utilize tools like AirDNA for market analytics, STR Helper for revenue projections, and local resources including the Campbell County Tourism Board for seasonal demand patterns, while connecting with LaFollette-area property managers and real estate agents who specialize in vacation rentals to identify off-market opportunities and understand local regulations that may affect STR operations.

To obtain an Airbnb/STR permit in LaFollette, Tennessee, you must first contact the LaFollette City Hall at 201 East Central Avenue or call (423) 562-2544 to inquire about their specific short-term rental ordinance requirements, as many small Tennessee municipalities have implemented regulations since 2019-2022. You'll typically need to submit a completed STR application form, provide proof of property ownership or lease agreement, submit a site plan or floor plan of the property, obtain liability insurance coverage (usually minimum $1 million), pass a safety inspection that includes smoke detectors and carbon monoxide detectors in all sleeping areas, and provide contact information for a local responsible party available 24/7. Required documents generally include a copy of your driver's license, property deed or lease, insurance certificate, emergency contact information, and parking plan showing adequate off-street parking spaces. The application fee typically ranges from $100-300 initially with annual renewal fees of $50-150, though LaFollette's specific fees should be confirmed with city staff. The approval timeline usually takes 30-60 days from submission of a complete application, including time for the required safety inspection by the city's building or fire department. LaFollette may also require compliance with noise ordinances, occupancy limits based on bedrooms and square footage, proper waste management arrangements, and posting of the permit number in all advertising, so contact the city directly to confirm current requirements as ordinances can change frequently.

Short-term rentals (STRs) are generally legal in LaFollette, Tennessee, as the city has not enacted specific prohibitions against vacation rentals, though operators must comply with standard business licensing requirements and Tennessee state regulations. LaFollette follows Campbell County's approach of allowing STRs while requiring basic business licenses and adherence to zoning ordinances, with most residential properties permitted to operate as short-term rentals provided they meet safety standards and tax obligations. The city requires STR operators to collect and remit local occupancy taxes, maintain proper insurance coverage, and ensure properties comply with fire safety codes and building standards. There are no specific prohibited areas within LaFollette city limits, though properties must conform to existing residential zoning requirements and homeowners association rules where applicable. Recent changes since 2020 have included increased enforcement of tax collection requirements and alignment with Tennessee's statewide STR registration system, but LaFollette has not implemented the restrictive measures seen in larger Tennessee cities like Nashville or Memphis, maintaining a relatively permissive stance toward vacation rental operations while ensuring basic regulatory compliance.

The best areas for Airbnb investment in LaFollette, Tennessee are the Norris Dam State Park vicinity, downtown LaFollette near Main Street, and properties along Norris Lake shoreline. The Norris Dam area attracts tourists year-round due to its proximity to outdoor recreation activities including fishing, boating, hiking, and the historic Norris Dam itself, which draws visitors interested in TVA history and engineering tours. Downtown LaFollette offers appeal for business travelers visiting local government offices, healthcare facilities, and regional businesses, while also serving tourists seeking authentic small-town Tennessee experiences and access to antique shops and local restaurants. Norris Lake waterfront properties command premium rates due to the lake's popularity for vacation rentals, particularly during summer months when families and groups seek lakeside accommodations for extended stays, fishing trips, and water sports activities. The area also benefits from its location between Knoxville and the Cumberland Gap region, making it attractive to travelers exploring multiple Tennessee and Kentucky attractions, with properties near Highway 25W offering convenient access for road trip tourists visiting Cumberland Falls, Big South Fork, and other regional destinations.

In LaFollette, Tennessee, Airbnb hosts are subject to Tennessee state sales tax of 7% and Campbell County local sales tax of 2.25%, totaling 9.25% on short-term rental accommodations. Additionally, there is a Tennessee state occupancy tax of 3% that applies to lodging stays under 30 days. Campbell County may impose an additional local occupancy tax of up to 5%, though the exact rate varies by municipality within the county. These taxes are typically collected by Airbnb directly from guests at the time of booking for participating hosts, with Airbnb remitting payments quarterly to the Tennessee Department of Revenue and applicable local tax authorities. Hosts not enrolled in Airbnb's tax collection service must register with the Tennessee Department of Revenue, collect taxes from guests, and file monthly returns by the 20th of the following month. Exemptions generally apply to stays of 30 days or longer, which are considered long-term rentals rather than short-term accommodations, and certain government or nonprofit organization bookings may qualify for exemptions with proper documentation.

The total cost to start an Airbnb in LaFollette, Tennessee is approximately $185,000-$220,000. Property purchase costs around $150,000 based on the median home price in the area as of 2023. Furnishing a 2-3 bedroom property requires $8,000-$12,000 for essential furniture, appliances, linens, and decor to create an attractive rental space. Initial setup costs including professional photography, listing creation, and basic renovations total $2,000-$4,000. Permits and fees in Campbell County include business license ($50-$100), short-term rental permit ($200-$500), and potential zoning compliance costs ($300-$800). Insurance for short-term rentals runs $1,200-$2,000 annually, with the first year paid upfront. Utility deposits and connections for electricity, water, internet, and cable cost approximately $500-$800. First six months of operating costs including utilities ($150/month), cleaning supplies ($100/month), maintenance reserves ($200/month), property management software ($50/month), and marketing ($100/month) total around $3,600. Additional working capital of $2,000-$3,000 should be reserved for unexpected repairs, guest amenities, and initial vacancy periods while building reviews and bookings.

Airbnb properties in LaFollette, Tennessee, typically generate annual revenues between $15,000-$35,000 for whole-home listings, with average daily rates ranging from $75-$120 depending on property size and amenities, particularly those near Norris Dam State Park and Cove Lake State Park which command premium pricing during peak summer and fall seasons. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($40-60 per turnover), property management (15-25% if outsourced), utilities ($150-250 monthly), insurance ($800-1,200 annually), and maintenance costs averaging $2,000-4,000 yearly. Successful properties in the area achieve profit margins of 25-40%, with lakefront cabins and properties offering outdoor amenities like fire pits, hot tubs, and boat access performing significantly better than standard residential listings. Key success factors include strategic pricing during peak periods (Memorial Day through October), professional photography showcasing natural surroundings, and targeting fishing enthusiasts and outdoor recreation visitors who frequent the Big South Fork National River area. Properties within 10 miles of Norris Dam typically maintain 60-75% occupancy rates, while those marketed specifically to corporate travelers working at nearby industrial facilities in Jacksboro achieve more consistent year-round bookings, though seasonal vacation rentals generally produce higher overall returns despite lower occupancy during winter months.

Based on LaFollette, Tennessee market conditions, Airbnb investments typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-15% depending on property type and location within the area. Properties near Norris Dam State Park and Cove Lake State Park command premium rates of $85-120 per night during peak seasons, while standard residential properties average $65-85 nightly. Initial investment recovery generally occurs within 6-8 years, with monthly gross revenues of $1,200-2,200 for well-positioned 2-3 bedroom properties. The market benefits from consistent tourism to nearby attractions including Big South Fork National River, with occupancy rates averaging 65-75% annually. Properties requiring minimal renovation typically reach profitability within 18-24 months, while extensive rehabs may require 30-36 months to achieve positive cash flow after accounting for acquisition costs, improvements, and operational expenses in this rural Tennessee market.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in LaFollette, Tennessee. Local real estate agents specializing in investment properties include Realty Executives Associates and Century 21 Legacy, both established in the East Tennessee market since the early 2000s. Awning offers nationwide Airbnb property management and investment consulting services, while Mashvisor provides property analysis tools specifically for short-term rental investments in smaller Tennessee markets like LaFollette. RedAwning specializes in vacation rental property acquisitions and has been active in Tennessee lake markets since 2015. Local services include Tennessee Mountain Realty, which has focused on Campbell County investment properties since 2010, and Norris Lake Properties, specializing in waterfront and vacation rental investments near Norris Dam State Park. AirDNA provides market data and analytics for the LaFollette area, while Vacasa offers property management services for investors purchasing Airbnb properties in the region. BiggerPockets connects investors with local real estate professionals familiar with Tennessee's short-term rental regulations, and Roofstock has expanded into the Tennessee market for turnkey rental property investments since 2018.