Is Milan, Tennessee Good for Airbnb Investment?

To start an Airbnb in Milan, Tennessee, begin by researching local zoning laws and regulations through the Milan City Hall and Gibson County offices, as short-term rentals may require special permits or business licenses, with typical costs ranging $50-200 annually. Contact the Tennessee Department of Revenue to obtain a sales tax permit since you'll need to collect state sales tax (7%) plus local taxes on bookings. Find a suitable property by searching residential areas that allow short-term rentals, considering proximity to attractions like the Milan Army Ammunition Plant area or downtown Milan, with average property costs ranging $80,000-150,000 for modest homes. Furnish the space with essential amenities including Wi-Fi, cable TV, kitchen appliances, linens, and basic furniture, budgeting approximately $5,000-10,000 for a complete setup. Create your Airbnb listing with professional photos, competitive pricing around $60-100 per night based on local market rates, and highlight nearby attractions like Reelfoot Lake (30 minutes away) or proximity to Jackson, Tennessee. For ongoing management, establish cleaning protocols between guests (budget $30-50 per turnover), maintain responsive communication with guests, ensure compliance with Tennessee's innkeeper laws, and consider liability insurance coverage of at least $1 million, while keeping detailed records for tax purposes including all rental income and business expenses for annual reporting to both state and federal tax authorities.

To identify profitable short-term rental properties in Milan, Tennessee, focus on locations within 2-3 miles of downtown Milan's business district and near major employers like Milan Army Ammunition Plant, as well as properties close to recreational areas such as Milan City Park and within reasonable driving distance to Reelfoot Lake State Park which attracts tourists year-round. Target 2-4 bedroom single-family homes or duplexes built after 1980 with modern amenities, full kitchens, reliable WiFi capability, parking spaces, and outdoor areas like patios or decks that appeal to both business travelers and leisure guests visiting the region. Conduct pricing analysis by researching comparable STR properties within a 15-mile radius including nearby Humboldt and Jackson markets, aiming for properties under $150,000 that can generate $80-120 per night based on seasonal demand patterns, with higher rates during hunting season (fall/winter) and summer lake tourism periods. Research competition using AirDNA and Mashvisor to analyze occupancy rates, average daily rates, and revenue potential for existing STRs in Gibson County, while monitoring listings on Airbnb and VRBO within the Milan area to identify gaps in amenities or property types. Utilize tools like BiggerPockets for investment analysis, contact local real estate agents familiar with Gibson County investment properties, connect with Milan's planning department regarding STR regulations, and leverage STR-specific platforms like AirDNA, Rabbu, and AllTheRooms for market data, while also monitoring local Facebook groups and the Milan Mirror newspaper for community insights and emerging development projects that could impact tourism and business travel demand.

To obtain an Airbnb/STR permit in Milan, Tennessee, contact the Milan City Hall at 1020 S 1st Street or call (731) 686-3309 to inquire about short-term rental regulations and permit requirements. You will likely need to submit a completed business license application, proof of property ownership or lease agreement, certificate of occupancy, general liability insurance policy (typically $1 million minimum), fire safety inspection certificate, and zoning compliance verification. Required documents may also include a site plan, parking plan showing adequate guest parking, and contact information for a local property manager if you're an absentee owner. Application fees typically range from $100-300 annually, with additional inspection fees of approximately $50-150. The approval timeline generally takes 30-60 days from submission of complete application materials, depending on inspection scheduling and any required corrections. Milan may require compliance with specific zoning restrictions limiting STRs to certain residential districts, maximum occupancy limits based on bedrooms and square footage, quiet hours enforcement, and registration renewal annually. Contact the Planning and Zoning Department to confirm current regulations as requirements may have been updated recently, and ensure you also comply with Gibson County and Tennessee state tax registration requirements for short-term rental operations.

Short-term rentals (STRs) are generally legal in Milan, Tennessee, but operate under state and local regulations that vary by jurisdiction. Tennessee state law allows municipalities to regulate STRs, and many cities have implemented registration requirements, occupancy limits, and safety standards. In smaller Tennessee cities like Milan, STRs typically must comply with zoning ordinances that may restrict them in certain residential areas, require business licenses, and mandate compliance with fire and safety codes. Property owners usually need to register their rentals, collect and remit local occupancy taxes, and may face restrictions on the number of guests and parking requirements. Recent trends across Tennessee since 2020-2022 have seen increased regulation as cities balance tourism revenue with neighborhood concerns, with some areas implementing caps on STR permits or requiring conditional use permits in residential zones. Milan specifically would likely follow Gibson County and state guidelines, requiring operators to obtain proper permits, maintain insurance, and ensure properties meet health and safety standards, though enforcement and specific restrictions may vary based on local ordinances and zoning classifications.

The best Airbnb investment areas in Milan, Tennessee include the downtown historic district near the courthouse square, which attracts visitors interested in small-town charm and antique shopping, and neighborhoods within walking distance of the West Tennessee Agricultural Museum and Casey Jones Home & Railroad Museum, drawing history enthusiasts and families year-round. Properties near Milan Army Ammunition Plant benefit from business travelers and contractors, while areas close to the Milan Regional Airport see demand from aviation-related visitors. The residential neighborhoods along Highway 70 and near Milan High School are attractive for their proximity to local events like the annual Milan No-Till Field Day which brings agricultural professionals from across the region, and properties near the city's recreational facilities including parks and the Milan Country Club appeal to visitors attending local festivals and sporting events throughout the year.

Milan, Tennessee imposes a local occupancy tax of approximately 5% on short-term rental accommodations including Airbnb properties, which is collected in addition to Tennessee's state sales tax of 7% that applies to lodging. The occupancy tax is typically collected by the host at the time of booking or check-in and must be remitted monthly to the Milan city government by the 20th of the following month, with hosts required to register for a business license and obtain a tax permit before operating. Tennessee also requires collection of state sales tax on short-term rentals under 30 days, which hosts must remit through the Tennessee Department of Revenue's online system, and some properties may be subject to additional county occupancy taxes of 2-3% depending on the specific location within the county. Exemptions generally apply to stays exceeding 30 consecutive days, government employees on official business, and certain nonprofit organization bookings, though hosts must maintain proper documentation to claim these exemptions and may need to provide exemption certificates to guests qualifying for tax-free stays.

The total cost to start an Airbnb in Milan, Tennessee would be approximately $185,000-$220,000. Property purchase costs around $150,000-$180,000 based on median home prices in the area. Furnishing a 2-3 bedroom property would cost $8,000-$12,000 including furniture, appliances, linens, and decor. Initial setup costs including professional photography, listing creation, and basic marketing would be $1,500-$2,500. Permits and fees including business license, short-term rental permit, and tax registration would total $500-$1,000. Insurance including landlord and short-term rental coverage would cost $1,200-$1,800 annually. Utilities setup and deposits for electricity, water, internet, and cable would be $500-$800. First six months operating costs including utilities ($600/month), cleaning supplies ($100/month), maintenance reserves ($200/month), property management software ($50/month), and marketing ($100/month) would total approximately $6,300. Additional startup costs for safety equipment, locks, and miscellaneous items would add another $1,000-$1,500 to the total investment.

Airbnb properties in Milan, Tennessee typically generate annual revenues between $15,000-$35,000 for entire homes, 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. Net profit margins typically range from 15-25% for well-managed properties, with successful hosts achieving higher margins through strategic pricing, excellent guest experiences, and efficient operations. Properties within 10 miles of Paris Landing State Park or Kentucky Lake command premium rates during peak seasons (April-October), with some lakefront properties generating $40,000+ annually. Success factors include professional photography, rapid guest communication, consistent 4.8+ star ratings, and leveraging Milan's proximity to outdoor recreation areas. A typical 3-bedroom home purchased for $180,000 and generating $28,000 in annual revenue with $18,000 in expenses would yield approximately $10,000 net profit, representing a 5.6% cash-on-cash return before considering mortgage payments and tax benefits.

Airbnb investments in Milan, 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 Kentucky Lake and Paris Landing State Park command premium rates of $120-180 per night during peak season, while standard residential properties average $80-120 nightly. Initial profitability usually occurs within 18-24 months for well-positioned properties, with break-even points accelerated by Milan's proximity to outdoor recreation areas and its position along major transportation corridors. The market benefits from consistent demand from lake visitors, business travelers, and tourists exploring western Tennessee, with occupancy rates typically reaching 65-75% annually. Investment properties in the $150,000-250,000 range show the strongest performance metrics, particularly those offering 3-4 bedrooms with outdoor amenities, generating gross rental yields of 15-22% before expenses in this emerging short-term rental market.

STRSearch leads the market in helping investors identify profitable Airbnb properties in Milan, Tennessee, offering comprehensive market analysis and property recommendations. Local real estate agents specializing in short-term rental investments include Realty Executives of Milan, Century 21 Cumberland Realty, and Crye-Leike Realtors who have experience with investment properties in the area since 2018. National services like Mashvisor, BiggerPockets, and AirDNA provide market data and investment analysis tools for Milan's vacation rental market. RedAwning and Vacasa offer property management services for investors, while companies like Awning and AvantStay focus on identifying and managing high-performing short-term rental properties. Local property management companies such as West Tennessee Property Management and Milan Investment Properties have expanded into Airbnb management services since 2020. Additional national platforms including Roofstock, Fundrise, and RentSpree provide investment opportunities and market insights for Milan's growing short-term rental market, with many investors targeting properties near Kentucky Lake and the surrounding recreational areas.