Is Middlesborough, Kentucky Good for Airbnb Investment?

To start an Airbnb in Middlesborough, Kentucky, begin by researching local zoning laws and regulations through the Middlesborough City Hall (606-248-3300) as the city may require business licenses or permits for short-term rentals, though Kentucky generally has fewer restrictions than larger cities. Contact Bell County's planning and zoning department to ensure your property is zoned for commercial or mixed-use activities, and check if homeowner association rules apply if relevant. Obtain necessary permits including a business license from the city clerk's office (typically $25-50 annually) and ensure you have proper insurance coverage that includes short-term rental protection. Find a suitable property by researching areas near Cumberland Gap National Historical Park, downtown Middlesborough, or properties with mountain views, as these attract tourists visiting the region's outdoor attractions. Purchase essential furnishings including quality mattresses, linens, towels, basic kitchen supplies, WiFi equipment, and safety items like smoke detectors and fire extinguishers, budgeting approximately $3,000-8,000 for a complete setup. Create your Airbnb listing with professional photos highlighting local attractions like the Cumberland Gap Tunnel and nearby hiking trails, set competitive pricing based on similar properties in southeastern Kentucky (typically $60-120 per night), and write descriptions emphasizing proximity to natural attractions and historical sites. Manage your property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating key exchanges or installing smart locks, maintaining the property regularly, and keeping detailed records for tax purposes since Kentucky requires sales tax collection on short-term rentals at 6% plus any local taxes.

To identify profitable short-term rental properties in Middlesborough, Kentucky, focus on locations near Cumberland Gap National Historical Park, downtown historic districts, and properties with mountain or valley views, as this area attracts tourists interested in outdoor recreation and Civil War history. Target 2-4 bedroom properties built after 1980 with modern amenities, full kitchens, outdoor spaces, and parking, while considering unique features like historic charm or scenic locations that command premium rates of $80-150 per night based on regional comparables. Analyze pricing using AirDNA and Mashvisor to benchmark against similar properties in nearby Corbin and Williamsburg, while researching competition through Airbnb, VRBO, and local tourism websites to identify gaps in amenities or property types. Utilize the Middlesborough Tourism Commission website, Bell County economic development resources, Kentucky tourism data, and tools like Rabbu or AllTheRooms for market analysis, while connecting with local real estate agents familiar with the tourism market and checking zoning regulations through the city planning office to ensure STR compliance.

To obtain an Airbnb/STR permit in Middlesborough, Kentucky, contact the Middlesborough City Hall at 2215 Cumberland Avenue or call (606) 248-3300 to begin the application process, as the city likely requires a business license and potentially a conditional use permit for short-term rentals. Required documents typically include a completed business license application, property deed or lease agreement, floor plan of the rental unit, proof of liability insurance (minimum $1 million coverage), fire safety inspection certificate, and zoning compliance verification. Application fees generally range from $50-150 for the business license plus approximately $200-400 for conditional use permits if required, with annual renewal fees of $25-75. The approval timeline typically takes 30-60 days from submission of complete application materials, including time for inspections and city council review if applicable. Middlesborough-specific requirements likely include compliance with local zoning ordinances (particularly in residential districts), adherence to occupancy limits based on property size, provision of adequate parking spaces for guests, maintenance of property appearance standards, and potential restrictions on the number of rental days per year or guest capacity limits, along with registration with the Kentucky Department of Revenue for state tax collection purposes.

Short-term rentals (STRs) in Middlesborough, Kentucky operate in a largely unregulated environment at the municipal level, as the city has not enacted specific ordinances governing platforms like Airbnb or VRBO as of 2024. Kentucky state law generally permits STRs unless local municipalities impose restrictions, and Middlesborough has not implemented comprehensive zoning restrictions or licensing requirements that would prohibit such rentals. Property owners can typically operate STRs in residential areas without specific permits, though they must comply with general property maintenance codes, fire safety regulations, and collect applicable state and local taxes including Kentucky's 6% sales tax and any local occupancy taxes. The city has not designated any specific prohibited areas for STRs, and there have been no recent significant legal changes targeting short-term rental operations. However, operators should ensure compliance with homeowners association rules if applicable, maintain proper insurance coverage, and be aware that the regulatory landscape could change as STR activity increases and the city may consider future ordinances to address noise, parking, or neighborhood character concerns similar to other Kentucky municipalities.

The best areas for Airbnb investment in Middlesborough, Kentucky include the downtown historic district near the courthouse square, which attracts visitors interested in the city's coal mining heritage and serves business travelers visiting local government offices and legal firms. The Cumberland Gap area on the outskirts of town is highly attractive due to its proximity to Cumberland Gap National Historical Park, drawing outdoor enthusiasts, hikers, and history buffs year-round. Properties near the Bell County Hospital and medical facilities capture medical tourism and visiting family members of patients. The residential areas along Highway 25E benefit from their accessibility and appeal to travelers passing through to Tennessee or visiting nearby Pineville. The neighborhoods around Southeast Kentucky Community and Technical College attract visiting families during graduation ceremonies and academic events. Areas near the industrial zones along the railroad tracks serve workers and contractors involved in coal, timber, and transportation industries who need temporary housing for extended projects.

Airbnb properties in Middlesborough, Kentucky are subject to Kentucky's state transient room tax of 1% on gross rental receipts, which applies to all short-term rental accommodations under 30 days. Bell County, where Middlesborough is located, imposes an additional local occupancy tax of 3% on transient accommodations, bringing the total occupancy tax rate to approximately 4%. These taxes are typically collected from guests at the time of booking through Airbnb's platform, which automatically calculates and remits the state portion directly to the Kentucky Department of Revenue as part of their voluntary collection agreement established in 2019. However, hosts may still be responsible for collecting and remitting the local Bell County portion directly to the county clerk's office on a monthly basis by the 20th of the following month, depending on local enforcement and collection agreements. Properties rented for 30 days or longer are generally exempt from these transient occupancy taxes, and some jurisdictions may provide exemptions for stays related to medical treatment or government business, though specific exemption details should be verified with local tax authorities as enforcement and collection procedures can vary at the county level.

To start an Airbnb in Middlesborough, Kentucky, expect total costs around $85,000-$95,000. Property purchase costs approximately $65,000 based on median home prices in this rural southeastern Kentucky market as of 2023-2024. Furnishing a 2-3 bedroom property runs $8,000-$12,000 including beds, linens, kitchen essentials, living room furniture, and basic appliances. Initial setup costs total $2,500-$3,500 covering professional photography, listing creation, welcome materials, cleaning supplies, and basic technology like smart locks and WiFi equipment. Permits and fees amount to $500-$800 including business license, short-term rental permit if required by Bell County, and tax registration. Insurance adds $1,200-$1,800 annually for short-term rental coverage beyond standard homeowner's insurance. Utilities average $200-$300 monthly totaling $1,200-$1,800 for six months covering electricity, water, internet, and basic cable. First six months operating costs including cleaning services, maintenance, marketing, platform fees, and miscellaneous expenses total approximately $3,000-$4,000. Property taxes and ongoing maintenance should also be factored at roughly $1,500-$2,000 for the initial six-month period.

Airbnb properties in Middlesborough, Kentucky typically generate modest returns due to the area's small population of approximately 10,000 and limited tourism infrastructure, with average nightly rates ranging from $45-75 compared to state averages of $85-120. Properties in this southeastern Kentucky town generally achieve 35-50% occupancy rates annually, generating gross revenues of $8,000-15,000 per year for typical 2-3 bedroom homes, while expenses including mortgage payments, utilities, cleaning, maintenance, and Airbnb fees typically consume 60-75% of gross revenue, leaving net profit margins of 25-40% or roughly $2,000-6,000 annually. Success factors include proximity to Cumberland Gap National Historical Park (30 minutes away), competitive pricing below $60/night, and targeting extended-stay guests or workers in the coal and healthcare industries, though the market remains challenging due to limited demand drivers and the area's economic transition away from coal mining, with most profitable properties being those purchased at low acquisition costs under $80,000 and operated by hands-on local owners who minimize management expenses.

Airbnb investments in Middlesborough, Kentucky typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, primarily driven by the area's proximity to Cumberland Gap National Historical Park and outdoor recreation activities that attract tourists year-round. Properties in downtown Middlesborough or near the national park entrance command higher nightly rates of $75-120, while renovation costs remain relatively low at $15,000-25,000 for a typical 2-3 bedroom property due to affordable local labor and materials. Most investors achieve profitability within 18-24 months, with seasonal peaks during spring and fall when hiking and camping activities drive occupancy rates to 65-75%, though winter months may see occupancy drop to 35-45%. The limited hotel inventory in Middlesborough creates opportunities for short-term rentals, with successful properties averaging $2,200-3,500 monthly gross revenue, and after accounting for expenses including cleaning, utilities, insurance, and platform fees, net monthly income typically ranges from $1,200-2,100 depending on property size and location.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties in Middlesborough, Kentucky, providing market analysis and investment insights. Local real estate agents like Coldwell Banker McMahan Co. and Re/Max Properties have experience with investment properties in the Bell County area, while Century 21 Cumberland Realty offers regional expertise in southeastern Kentucky markets. National services include Awning, which provides full-service Airbnb property management and acquisition assistance, and Mashvisor, offering rental property analytics and market data for the Middlesborough area. AirDNA provides short-term rental market intelligence and performance data, while BiggerPockets connects investors with local professionals and market insights. RedAwning specializes in vacation rental property management and can assist with property acquisition strategies. Local property management companies like Mountain Laurel Properties and Cumberland Gap Property Management offer insights into the rental market dynamics. Real estate investment firms such as Roofstock (national) and local investment groups through the Kentucky Real Estate Investors Association provide additional resources for finding profitable Airbnb opportunities in this Appalachian market, which benefits from proximity to Cumberland Gap National Historical Park and outdoor recreation tourism.