Is McKenzie, Tennessee Good for Airbnb Investment?

To start an Airbnb in McKenzie, Tennessee, begin by researching local zoning laws and regulations through the McKenzie City Hall and Carroll County offices, as Tennessee allows short-term rentals but municipalities may have specific requirements including business licenses, occupancy permits, and tax registration with the Tennessee Department of Revenue for state and local occupancy taxes (estimated 5-7% combined). Obtain necessary permits including a business license from McKenzie City Hall (approximately $25-50), register for Tennessee sales tax, and ensure your property meets fire safety codes and has proper smoke detectors, carbon monoxide detectors, and emergency exits as required by Tennessee fire marshal regulations. Find a suitable property by researching McKenzie's tourism attractions like nearby Kentucky Lake, Natchez Trace State Park, and proximity to Nashville (90 minutes), focusing on 2-3 bedroom homes or apartments that can accommodate 4-6 guests with estimated purchase prices ranging $80,000-150,000 for typical properties in the area. Furnish the space with essential amenities including comfortable beds, linens, towels, fully equipped kitchen, WiFi, TV, air conditioning, and local guidebooks, budgeting approximately $5,000-10,000 for complete furnishing. List your property on Airbnb, VRBO, and Booking.com with professional photos highlighting unique features, competitive pricing around $75-125 per night based on McKenzie market rates, and detailed descriptions emphasizing proximity to outdoor recreation and Nashville access. Manage your listing by maintaining 24-hour guest communication, coordinating cleaning services between stays, implementing keyless entry systems, and establishing relationships with local maintenance providers while monitoring occupancy rates and adjusting pricing seasonally to maximize revenue in this rural Tennessee market.

To identify profitable short-term rental properties in McKenzie, Tennessee, focus on locations within 2-3 miles of Kentucky Lake and Paris Landing State Park, as these areas attract fishing and outdoor enthusiasts year-round, with properties near boat ramps commanding 15-20% higher nightly rates averaging $120-180 per night. Target 2-4 bedroom homes built after 1990 with lake views, boat parking, fishing cleaning stations, and outdoor entertainment spaces like decks or fire pits, as these features can increase occupancy rates to 65-75% annually. Analyze comparable properties using AirDNA and Mashvisor to identify the $80,000-$200,000 price range that typically yields 12-18% ROI, while monitoring seasonal pricing fluctuations where summer rates peak 40% higher than winter months. Research competition by studying the 25-35 active STRs in the area, noting that properties offering boat rentals or fishing guide partnerships achieve 20% higher revenue, and utilize tools like Rabbu for market analysis, STR Helper for performance tracking, and connect with local property management companies like Tennessee Lake Rentals who understand McKenzie's tourism patterns driven by Kentucky Lake's bass fishing tournaments and state park events that create consistent demand spikes throughout the fishing season from March through November.

To obtain an Airbnb/STR permit in McKenzie, Tennessee, you must first contact the McKenzie City Hall at 16635 Highland Drive or call (731) 352-2292 to inquire about their specific short-term rental ordinance and application process. Required documents typically include a completed STR application form, proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental property, emergency contact information, and a business license application. The application fee is estimated at $150-250 annually, with additional business license fees of approximately $50-100. You'll need to schedule a property inspection with the city's building department to ensure compliance with fire safety codes, occupancy limits, and zoning requirements. McKenzie likely requires STR properties to maintain adequate parking (minimum 2 spaces), proper signage with permit numbers displayed, noise ordinance compliance with quiet hours from 10 PM to 7 AM, and maximum occupancy limits based on bedrooms plus two additional guests. The approval timeline typically takes 30-45 days from submission of complete application materials. Once approved, you must renew the permit annually and may be subject to periodic inspections to maintain compliance with local regulations.

Short-term rentals (STRs) are generally legal in McKenzie, Tennessee, as the state of Tennessee permits STRs statewide under legislation passed in 2017-2018 that prevents local governments from completely banning them. However, McKenzie, like other Tennessee municipalities, can implement reasonable regulations such as registration requirements, safety standards, occupancy limits, and zoning restrictions. The city likely requires STR operators to obtain business licenses and comply with local zoning ordinances, which may restrict or prohibit STRs in certain residential areas or require special permits. Tennessee's state law requires STR platforms like Airbnb and VRBO to collect and remit state sales tax, and local governments can impose additional occupancy taxes. McKenzie may have specific noise ordinances, parking requirements, and complaint procedures that STR operators must follow. Recent changes in Tennessee have generally favored STR operations while allowing municipalities to maintain reasonable health, safety, and welfare regulations, though specific ordinances in McKenzie may have been updated in recent years to address neighborhood concerns or operational standards.

The best areas for Airbnb investment in McKenzie, Tennessee include the historic downtown district near Main Street, which attracts visitors interested in small-town charm and local events like the annual McKenzie Christmas Parade and summer festivals. The residential neighborhoods surrounding McKenzie High School and along Highway 79 offer good potential due to their proximity to Paris Landing State Park (20 minutes away) and Kentucky Lake recreational activities, drawing weekend tourists and fishing enthusiasts. Areas near the McKenzie Regional Airport provide opportunities for business travelers and those visiting nearby manufacturing facilities including Kellogg's plant in nearby Paris. The neighborhoods around Bethel University in McKenzie proper benefit from visiting families during graduation ceremonies, sports events, and academic conferences. Properties within walking distance of the downtown antique shops and the historic L&N Railroad depot appeal to heritage tourists exploring West Tennessee's railroad history, while homes near the city's medical facilities attract medical tourism and visiting healthcare professionals serving the rural community.

Airbnb properties in McKenzie, Tennessee are subject to Tennessee state sales tax of 7% on short-term rental accommodations, which is automatically collected by Airbnb through their platform and remitted directly to the Tennessee Department of Revenue on behalf of hosts. Additionally, Carroll County (where McKenzie is located) imposes a local hotel/motel tax of approximately 5% on transient accommodations under 30 days, which hosts must typically collect from guests and remit quarterly to the county clerk's office using Form HOT-1 by the 20th of the month following each quarter. The City of McKenzie may also impose a local occupancy tax of around 3-5% on short-term rentals, requiring separate registration with the city and monthly or quarterly remittance depending on volume. Properties rented for 30 days or longer are generally exempt from these occupancy taxes, and some jurisdictions may provide exemptions for stays related to medical treatment or government business, though hosts should verify current rates and procedures with the Tennessee Department of Revenue, Carroll County, and McKenzie city offices as tax rates and collection methods can change.

Starting an Airbnb in McKenzie, Tennessee requires approximately $180,000-220,000 in total initial investment. Property purchase costs around $150,000 based on the median home price in rural Tennessee markets like McKenzie. Furnishing a 2-3 bedroom property typically costs $15,000-20,000 including beds, linens, kitchen essentials, living room furniture, and appliances from retailers like IKEA, Wayfair, and local furniture stores. Initial setup expenses including professional photography, listing creation, and basic renovations total approximately $3,000-5,000. Permits and fees vary but generally include business license ($50-200), short-term rental permit if required by the city ($100-500), and potential HOA approval fees. Insurance costs around $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 roughly $500-800. First six months of operating costs including utilities ($150/month), cleaning supplies ($100/month), maintenance reserves ($200/month), property management software like Airbnb or VRBO fees (3% of bookings), and marketing expenses total approximately $3,000-4,000, assuming moderate occupancy rates during the initial period.

Airbnb properties in McKenzie, Tennessee, typically generate modest profitability with average annual revenues ranging from $15,000-$35,000 for whole-home listings, depending on property size and amenities. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($50-75 per turnover), utilities ($150-200 monthly), property management (15-25% of revenue), insurance ($1,200-2,000 annually), and maintenance costs. Properties within 10 miles of McKenzie's downtown area and those featuring amenities like hot tubs or proximity to Kentucky Lake tend to achieve higher occupancy rates of 45-65% compared to basic listings at 25-40%. A typical 3-bedroom home generating $28,000 annually might incur $16,000 in expenses, yielding a net profit margin of approximately 43% or $12,000. Success factors include competitive pricing ($80-120 per night), professional photography, responsive host communication, and strategic positioning near outdoor recreation areas. Properties owned by hosts like those managing multiple units in the broader Carroll County area report improved economies of scale, with per-unit expenses decreasing as portfolio size increases, though McKenzie's smaller market size limits scalability compared to Nashville or Memphis markets.

Airbnb investments in McKenzie, Tennessee typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14%, based on the area's growing tourism market driven by proximity to Kentucky Lake and Paris Landing State Park. Properties in McKenzie generally achieve profitability within 18-24 months, with average nightly rates of $85-120 for 2-3 bedroom homes and occupancy rates of 65-75% annually. The market benefits from consistent demand from lake visitors, hunters, and travelers exploring the Tennessee River region, with peak seasons during summer months and hunting season generating higher returns. Initial investment costs are relatively low compared to major metropolitan areas, with median property prices around $150,000-250,000, allowing investors to achieve positive cash flow typically within the first year of operation when factoring in mortgage payments, maintenance, and management costs.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties in McKenzie, Tennessee, providing market analysis and investment metrics. Local real estate agents like Realty Executives of Paris and Century 21 Platinum Partners serve the McKenzie area and have experience with investment properties suitable for Airbnb conversions. National services include Mashvisor, which offers Airbnb analytics and property search tools, AirDNA for market data and revenue projections, and Awning for turnkey Airbnb investment properties. BiggerPockets connects investors with local agents and provides educational resources, while Roofstock focuses on single-family rental investments that can be converted to short-term rentals. Local property management companies like Tennessee Valley Property Management and West Tennessee Property Services can assist with ongoing Airbnb operations. Additional national platforms include Vacasa for property management, RedAwning for vacation rental analytics, and AllTheRooms for market intelligence in the McKenzie and broader Henry County market.