Is Midway, Kentucky Good for Airbnb Investment?

To start an Airbnb in Midway, Kentucky, begin by researching local zoning laws and regulations through the Woodford County Planning and Zoning office, as Midway typically falls under county jurisdiction for short-term rental regulations, though you should also check with Midway city officials since some municipalities have their own ordinances. Obtain necessary permits including a business license from Woodford County (approximately $25-50), register for Kentucky state tax collection, and ensure your property meets fire safety codes and building requirements. Find a suitable property by searching residential areas near downtown Midway or properties with historic charm, as the area attracts visitors interested in Kentucky's horse country and bourbon trail, with average property prices ranging $150,000-300,000 for suitable homes. Furnish the space with quality basics including comfortable beds, linens, towels, kitchen essentials, WiFi, and local touches like Kentucky bourbon or horse-themed decor, budgeting approximately $5,000-15,000 for initial furnishing. List your property on Airbnb and VRBO platforms with professional photos highlighting the Kentucky countryside setting, proximity to Keeneland Race Course (20 minutes), and bourbon distilleries, setting competitive rates around $80-150 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, collecting and remitting Kentucky's 6% sales tax plus any local occupancy taxes, and building relationships with local cleaning services and maintenance contractors to ensure smooth operations.

To identify profitable short-term rental properties in Midway, Kentucky, focus on locations within walking distance of the Kentucky Horse Park, Woodford Reserve Distillery, and historic downtown areas, as these attract tourists year-round. Target 2-4 bedroom properties built after 1990 with modern amenities, full kitchens, outdoor spaces, and parking, as guests prefer comfort during bourbon trail visits and horse-related events. Analyze pricing using AirDNA and Mashvisor to benchmark against comparable properties in Versailles and Lexington, aiming for properties under $300,000 that can command $150-250 per night during peak seasons (Kentucky Derby time, fall foliage, and summer horse events). Research competition by monitoring existing STRs within a 10-mile radius, noting their occupancy rates, pricing strategies, and guest reviews to identify market gaps. Utilize tools like Rabbu, STR Helper, and local MLS data while connecting with Midway-specific resources such as the Woodford County Tourism Commission, local real estate agents familiar with STR regulations, and Facebook groups for Kentucky STR investors to understand seasonal demand patterns, local events calendar, and zoning restrictions that could impact profitability.

To obtain an Airbnb/STR permit in Midway, Kentucky, you must first contact the Woodford County Planning and Zoning Department at 103 South Main Street, Versailles, KY 40383, as Midway falls under county jurisdiction for zoning matters. Submit a conditional use permit application along with a detailed site plan, proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, fire safety inspection certificate from the local fire department, and health department approval for septic/water systems. Required documents also include a parking plan showing adequate off-street parking, neighbor notification forms, and a $250 application fee plus $75 for public hearing costs. The process typically takes 45-60 days and includes a public hearing before the Board of Adjustments. Specific Midway requirements include maintaining the residential character of the neighborhood, providing one parking space per bedroom, ensuring compliance with the city's noise ordinance between 10 PM and 7 AM, and registering with the Kentucky Department of Revenue for transient room tax collection. You must also obtain a business license from Woodford County Clerk's office for approximately $25 annually and ensure the property meets all building codes and ADA accessibility requirements where applicable.

Short-term rentals (STRs) in Midway, Kentucky are generally legal but subject to local regulations and zoning restrictions. As a small city in Woodford County, Midway likely follows county-wide ordinances that may require STR operators to obtain business licenses and comply with safety standards, though specific municipal regulations may vary. The city, known for its historic charm and proximity to horse farms, has seen increased interest in vacation rentals, but operators typically must ensure properties meet residential zoning requirements and may face restrictions in certain historic districts. Kentucky state law generally allows STRs while permitting local governments to impose reasonable regulations, and Midway has not implemented outright bans, though operators should verify current zoning compliance and any recent ordinance changes with the city clerk's office. Recent trends in Kentucky have seen some municipalities tightening regulations around noise, parking, and occupancy limits, and Midway may have similar evolving standards to balance tourism benefits with neighborhood character preservation.

The best areas for Airbnb investment in Midway, Kentucky include the Historic Downtown District along Railroad Street and Main Street, which attracts tourists interested in the town's antebellum architecture, boutique shopping, and proximity to Woodford Reserve Distillery tours. The Weisenberger Mill area offers appeal due to its historic significance and scenic location along South Elkhorn Creek, drawing visitors interested in Kentucky's milling heritage and rural tourism. The residential neighborhoods near Midway University provide opportunities for parents visiting students, prospective families touring the campus, and business travelers attending university events or conferences. Areas close to the Bluegrass Scenic Railroad depot are particularly attractive as they capture tourists taking the scenic train rides between Midway and Versailles, especially during peak seasons like fall foliage tours. Properties within walking distance of the Kentucky Castle in nearby Versailles (about 10 minutes away) benefit from overflow guests seeking more affordable accommodations while still accessing this luxury venue for weddings and events, while the proximity to Keeneland Race Course in Lexington (20 minutes) makes Midway properties attractive during racing seasons in April and October when Lexington accommodations are at premium pricing.

Airbnb properties in Midway, Kentucky are subject to Kentucky's state transient room tax of 1% on gross rental receipts, which is collected by the host and remitted quarterly to the Kentucky Department of Revenue. Additionally, Woodford County imposes a local occupancy tax of approximately 3% on short-term rental accommodations, bringing the total tax burden to around 4% of gross rental income. These taxes are typically collected directly from guests at the time of booking through Airbnb's platform in many cases, though hosts remain ultimately responsible for ensuring proper remittance to state and local authorities by the 20th day following the end of each quarter for state taxes and monthly for county taxes. Exemptions generally apply to stays exceeding 30 consecutive days, which are considered long-term rentals rather than transient accommodations, and properties rented for fewer than 15 days per year may qualify for certain federal tax exemptions though state and local occupancy taxes would still apply.

To start an Airbnb in Midway, Kentucky, the total estimated costs would be approximately $185,000-$220,000. Property purchase represents the largest expense at $150,000-$180,000 based on median home prices in this small Kentucky city. Furnishing costs typically range $8,000-$12,000 for a complete 2-3 bedroom property including furniture, bedding, kitchenware, and décor 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 in Kentucky generally total $500-$800 covering business licenses and local registration requirements. Insurance costs run $1,200-$1,800 annually for short-term rental coverage through companies like Proper Insurance or CBIZ. Monthly utilities including electricity, water, internet, and cable average $200-$300, totaling $1,200-$1,800 for six months. First six months operating costs including cleaning services, supplies, maintenance, and platform fees typically range $3,000-$4,500. Marketing and initial guest amenities add another $500-$1,000 to launch costs.

Airbnb properties in Midway, Kentucky show moderate profitability potential with average nightly rates ranging from $75-120 for typical 2-3 bedroom homes, generating approximately $18,000-28,000 in annual gross revenue at 60-70% occupancy rates. Operating expenses typically consume 40-50% of gross revenue, including cleaning fees ($30-50 per turnover), property management (15-25%), utilities ($150-200 monthly), insurance ($800-1,200 annually), and maintenance costs averaging $2,000-3,500 yearly. Net profit margins generally fall between 25-35% for well-managed properties, with successful hosts like those operating renovated historic homes near Woodford Reserve Distillery achieving higher margins of 35-40% by capitalizing on bourbon tourism and Kentucky Derby visitors. Key success factors include proximity to Keeneland Race Course (15 minutes away), professional photography showcasing Kentucky's horse country aesthetic, competitive pricing during peak seasons (April-May, September-October), and maintaining 4.8+ star ratings through consistent cleanliness and local hospitality touches like bourbon welcome gifts. Properties within walking distance of Midway's antique shops and restaurants typically outperform rural locations by 15-20% in both occupancy and nightly rates, with break-even points occurring around 45-50 nights annually for most investors.

Based on Midway, Kentucky market conditions, Airbnb investments typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14% depending on property type and location within the area. Properties near Kentucky Horse Park and bourbon trail attractions tend to perform at the higher end of this range, with initial profitability expected within 18-24 months of operation. The market benefits from consistent tourism related to equestrian events, bourbon tourism, and proximity to Lexington, with average daily rates of $85-120 and occupancy rates of 65-75% annually. Investment properties in the $150,000-250,000 range with 2-3 bedrooms show the strongest performance metrics, particularly those within 15 minutes of major attractions, with some investors achieving break-even on initial capital within 6-8 years when factoring in appreciation and tax benefits alongside rental income.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties in Midway, Kentucky, offering market analysis and property recommendations. Local real estate agents specializing in investment properties include Bluegrass Sotheby's International Realty and Rector Hayden Realtors, both serving the Woodford County area with expertise in vacation rental investments. National services like AirDNA provide market data and analytics for Midway's short-term rental market, while Mashvisor offers investment property analysis tools covering Kentucky markets. Local property management companies such as Kentucky Lake Vacation Rentals and Bluegrass Property Management can assist with identifying and managing Airbnb investments in the area. Additional national platforms include BiggerPockets for networking with local investors, Roofstock for turnkey rental properties, and RedAwning for vacation rental market insights, all of which can help investors find profitable Airbnb opportunities in Midway's growing tourism market near Kentucky Horse Park and bourbon trail attractions.