Is Monterey, Tennessee Good for Airbnb Investment?

Potentially—Monterey, Tennessee combines visitor demand with long-term real estate upside.

• Presents a unique opportunity, largely influenced by its growing appeal as a serene escape within the state's natural beauty.
• Current market conditions in Monterey show a steady increase in interest for short-term rentals, driven by tourism trends that favor outdoor activities, state parks.
• Property values in the area remain relatively accessible compared to major metropolitan centers, offering a lower entry point for investment while still demonstrating appreciation potential.
• The investment potential is further bolstered by the consistent demand from visitors seeking proximity to attractions like Burgess Falls State Park and various hiking trails.

$800–$2,500, based on location, season, and property quality.

• Based on available market data and regional analysis, Airbnb properties in Monterey, Tennessee typically generate monthly revenues ranging from $800 to $2,500, with most hosts earning between $1,200 to $1,800 per month depending on property size, amenities, and location proximity to Cookeville and the Highland Rim region.
• Seasonal variations show peak earnings during summer months when revenues can increase by 25-40% due to outdoor recreation activities around Center Hill Lake and nearby state parks.
• Properties closer to the lake or with unique features like hot tubs, fire pits, or scenic views command premium rates of $120-180 per night.
• Key factors affecting earnings include property condition and cleanliness ratings, responsive host communication, competitive pricing strategies, professional photography.
• Occupancy rates in the area typically range from 45-65% annually, with successful hosts maintaining higher occupancy through strategic pricing, excellent guest experiences.

Potentially strong—typical annual ROI is 8–14%.

• Typically generate ROI between 8-14% annually, with average nightly rates ranging from $85-120 for standard properties and $150-200 for premium lakefront or mountain view units near Cookeville Lake and the Cumberland Plateau.
• The payback period for initial investment usually spans 7-10 years, depending on property acquisition costs averaging $180,000-280,000 for suitable vacation rental properties.
• Occupancy rates fluctuate seasonally from 45-55% during peak summer and fall months to 25-35% in winter, resulting in annual gross revenues of $18,000-32,000 for typical properties.
• Compared to long-term rentals in Monterey that yield 6-9% ROI with monthly rents of $800-1,200, short-term rentals can outperform by 2-5 percentage points but require significantly higher management involvement.

Monterey, Tennessee averages 45–55% annual occupancy, with seasonal variation.

• Airbnb occupancy rates in Monterey, Tennessee typically average around 45-55% annually, with significant seasonal variations driven by the area's proximity to Center Hill Lake and outdoor recreation opportunities.
• Peak season occurs from May through September, with occupancy rates climbing to 65-75% during summer months when lake activities, boating, and camping draw visitors to the region.
• Spring and fall shoulder seasons maintain moderate occupancy around 40-50%, while winter months drop to approximately 25-35% as outdoor tourism declines.
• Monterey's occupancy rates generally align with rural Tennessee averages of 50-60% but fall below the state average of 60-65% due to its smaller tourism market compared to destinations like Nashville, Gatlinburg.
• Nationally, Monterey underperforms the average Airbnb occupancy rate of 65-70%, reflecting its position as a regional rather than major tourist destination.

The strongest opportunities balance visitor demand, nightly rates, and acquisition cost.

• The downtown Monterey area offers excellent Airbnb potential due to its proximity to the historic courthouse square, local restaurants, and antique shops.
• The Bee Rock area near Standing Stone State Park provides strong investment opportunities with its access to hiking trails, camping, and outdoor recreation.
• Neighborhoods along Highway 111 near Dale Hollow Lake benefit from water recreation tourism, with lakefront or lake-view properties earning $100-180 per night during peak season from boaters, fishermen.
• The residential areas near Monterey Elementary and the city park appeal to families visiting for youth sports tournaments and local events.
• Properties in the Rolling Hills subdivision provide a quiet, upscale setting that attracts couples and small groups seeking peaceful retreats.
• The area around Muddy Pond Mennonite community draws cultural tourists interested in traditional crafts and baked goods, supporting nightly rates of $75-115 for authentic rural experiences.
• Finally, neighborhoods near the intersection of Highways 62 and 111 offer strategic positioning for guests exploring multiple regional attractions including Cumberland County Playhouse and various state parks.

Yes, but only where zoning permits short-term rentals and every required license is current.

• Short-term rental regulations in Monterey, Tennessee are primarily governed at the county level through Putnam County ordinances.
• Property owners must obtain a business license from Putnam County and register with the Tennessee Department of Revenue for tax collection purposes.
• Owner-occupancy is not required for most short-term rentals in Monterey, though properties must meet basic safety requirements including smoke detectors, carbon monoxide detectors.
• Zoning restrictions generally allow STRs in residential areas with some limitations on commercial zoning districts, and the registration process involves submitting property details, contact information.
• Recent changes since 2021-2022 have included stricter noise ordinances, enhanced parking requirements (typically 1 space per bedroom), and increased penalties for violations.

Tax rates vary by jurisdiction; licensing, inspection, and insurance costs are additional.

• Short-term rentals in Monterey, Tennessee are subject to several fees and taxes including Tennessee state sales tax of 7%, local sales tax which typically ranges from 2-3% in small Tennessee municipalities.
• Property owners must obtain a business license from the city which generally costs between $25-50 annually.
• The city of Monterey may impose additional local lodging taxes ranging from 2-5% and require short-term rental permits costing approximately $50-150 annually.
• Property owners are also responsible for collecting and remitting all applicable taxes monthly or quarterly, and may face inspection fees of $25-75 for initial permits.