Is Murray, Kentucky Good for Airbnb Investment?

To start an Airbnb in Murray, Kentucky, begin by researching local zoning laws and regulations through the Murray Planning Commission and Calloway County offices, as short-term rentals may require special permits or fall under specific zoning restrictions. Contact the Murray Business License Department to obtain necessary business licenses and check if you need a transient room tax permit through the Kentucky Department of Revenue. Find a suitable property by searching residential areas near Murray State University or downtown Murray, considering proximity to attractions like the National Scouting Museum and Kentucky Lake. Purchase essential furnishings including quality bedding, basic kitchen appliances, Wi-Fi equipment, and safety items like smoke detectors and fire extinguishers, ensuring compliance with Kentucky fire safety codes. Create your Airbnb listing with professional photos highlighting Murray's college town atmosphere and lake access, setting competitive rates based on local market research of similar properties in the $60-120 per night range. For ongoing management, establish cleaning protocols between guests, respond promptly to inquiries, coordinate key exchanges or install smart locks, maintain the property regularly, and keep detailed records for tax purposes including Kentucky's 6% sales tax and any applicable local occupancy taxes that Murray may implement.

To identify profitable short-term rental properties in Murray, Kentucky, focus on locations within 2-3 miles of Murray State University campus, near Kentucky Lake recreational areas, and in historic downtown districts where demand peaks during university events, graduation, and summer lake season. Target 2-4 bedroom properties built after 1980 with modern amenities, full kitchens, parking, and outdoor spaces, as these command $80-150 nightly rates compared to $50-80 for basic accommodations. Analyze comparable STR pricing using AirDNA and Mashvisor, noting that Murray properties typically achieve 40-60% occupancy rates with seasonal spikes during football season (September-November) and lake activities (May-August). Research competition by monitoring active Airbnb and VRBO listings within 5-mile radius, identifying gaps in luxury amenities or unique themes like lake-view or university-themed properties. Utilize STR-specific tools including AirDNA for market analytics, Mashvisor for property analysis, and local resources like Murray Tourism Commission data, Calloway County property records, and Murray State University event calendars to predict demand patterns, while consulting with local property managers like Lake Region Property Management who understand Murray's seasonal rental dynamics and regulatory requirements.

To obtain an Airbnb/STR permit in Murray, Kentucky, you must first contact the Murray Planning Department at City Hall located at 104 North 5th Street to determine if short-term rentals are permitted in your zoning district, as Murray follows standard Kentucky municipal regulations for rental properties. You'll need to submit a business license application through the City Clerk's office, provide proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental unit, and pass a safety inspection conducted by the Murray Fire Department. Required documents include a completed business license application, property deed or lease, insurance certificate, Kentucky sales tax permit, and inspection certificates for fire safety and building code compliance. The business license fee is approximately $50-75 annually, with inspection fees around $100-150, and the process typically takes 30-45 days from application submission to permit approval. Murray requires all STR operators to maintain guest registries, limit occupancy to posted maximums, provide emergency contact information to neighbors, ensure adequate parking, and comply with noise ordinances, while properties in residential zones may have additional restrictions on the number of rental days per year or require conditional use permits depending on the specific zoning classification.

Short-term rentals (STRs) are legal in Murray, Kentucky, but operate under specific municipal regulations established around 2019-2020. The city requires STR operators to obtain a business license and comply with zoning restrictions that generally limit short-term rentals to certain residential districts while prohibiting them in some neighborhoods to preserve residential character. Properties must meet safety requirements including smoke detectors, carbon monoxide detectors, and fire extinguishers, and operators are typically required to provide contact information for a local representative available 24/7 for any issues. Murray has implemented occupancy limits based on property size and parking requirements, with violations subject to fines and potential license revocation. The regulations were developed in response to growing STR activity near Murray State University and downtown areas, balancing tourism benefits with neighborhood concerns about noise and parking impacts.

The best areas for Airbnb investment in Murray, Kentucky center around the Murray State University district, particularly properties within walking distance of campus along Main Street and 16th Street, which attract consistent demand from visiting families, prospective students, and university events year-round. The historic downtown area near the courthouse square offers charm for leisure travelers exploring Kentucky Lake region activities, while properties near the Land Between the Lakes National Recreation Area (approximately 15 minutes east) capitalize on outdoor tourism, fishing, and camping visitors seeking comfortable accommodations. The residential neighborhoods around 12th Street and Olive Boulevard provide quiet, family-friendly options for extended stays and business travelers visiting local healthcare facilities like Murray-Calloway County Hospital. Properties near Highway 641 and the Walmart/shopping district attract convenience-seeking guests, while homes closer to Kentucky Lake and nearby marinas serve the significant boating and fishing tourism market that peaks during spring and summer months, with events like the annual Big Singing drawing regional visitors.

In Murray, Kentucky, Airbnb hosts are subject to Kentucky's 6% state sales tax on transient accommodations, which applies to rentals of less than 30 consecutive days, and this tax is typically collected by Airbnb directly from guests and remitted to the Kentucky Department of Revenue on behalf of hosts through their automated tax collection system that began around 2019. Additionally, hosts may be subject to Calloway County's local transient room tax of approximately 3%, which covers short-term rental accommodations, and this is also collected by Airbnb where agreements exist with local authorities, though hosts should verify their specific obligations with Calloway County officials. The city of Murray may impose its own occupancy tax of around 2-3% on transient accommodations, and while Airbnb may collect this in some cases, hosts are ultimately responsible for ensuring compliance and may need to register with local tax authorities and file periodic returns if the platform doesn't handle collection automatically. Exemptions typically apply to rentals of 30 days or longer, which are considered long-term stays rather than transient accommodations, and some jurisdictions may exempt rentals below certain dollar thresholds, though hosts should confirm current rates and collection procedures with the Kentucky Department of Revenue, Calloway County, and Murray city offices as tax agreements and rates can change.

Starting an Airbnb in Murray, Kentucky requires approximately $180,000-220,000 in total initial investment. Property purchase costs around $150,000 based on Murray's median home price as of 2023. Furnishing a 2-3 bedroom property typically costs $8,000-12,000 including beds, linens, kitchen essentials, living room furniture, and décor. Initial setup expenses including professional photography, listing creation, and basic renovations total $2,000-3,000. Permits and fees in Murray include business license ($50), short-term rental permit ($200), and potential zoning compliance costs ($500-1,000). Insurance for short-term rentals runs $1,200-1,800 annually, with six months costing $600-900. Utility setup and deposits for electricity, water, gas, internet, and cable total approximately $500-800 initially. First six months of operating costs including utilities ($150/month), cleaning supplies ($100/month), maintenance reserves ($200/month), platform fees (3% of bookings estimated at $300/month), and marketing ($100/month) total around $4,500-5,100. Additional considerations include potential HOA fees, property taxes, and emergency repair funds which could add another $2,000-4,000 to the initial investment.

Airbnb properties in Murray, Kentucky, typically generate annual revenues between $15,000-$35,000 for well-positioned properties, with average daily rates ranging from $75-$120 depending on proximity to Murray State University and Kentucky Lake. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($25-40 per turnover), utilities ($150-250 monthly), property management (10-20% of revenue), insurance ($800-1,200 annually), and maintenance costs. Properties near the university campus achieve higher occupancy rates (65-75%) during the academic year, while lake-proximity properties peak during summer months with 70-80% occupancy. Net profit margins typically range from 15-25% for owner-operated properties, with successful hosts reporting annual profits of $8,000-$15,000 on properties valued at $150,000-$250,000. Key success factors include strategic location within 2 miles of Murray State University or Kentucky Lake, professional photography, competitive pricing during peak seasons (graduation, homecoming, summer lake season), and maintaining 4.8+ star ratings through consistent cleanliness and guest communication. Properties featuring amenities like hot tubs, lake access, or accommodating large groups (6+ guests) command premium rates and achieve higher profitability, with some top-performing hosts in the area reporting ROI of 8-12% annually.

Based on Murray, 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 proximity to Murray State University. Properties within 2-3 miles of the university campus tend to achieve higher occupancy rates of 65-75% annually, while those further out average 45-60% occupancy. Initial investment recovery and profitability generally occurs within 18-24 months for well-positioned properties, with average daily rates ranging from $85-125 during peak university periods and $60-85 during off-peak times. The market benefits from consistent demand from university visitors, parents, and regional business travelers, with properties requiring initial investments of $15,000-35,000 for furnishing and setup typically achieving monthly gross revenues of $1,200-2,800 depending on property size and amenities.

STRSearch is a national platform that helps investors identify profitable short-term rental properties across markets including Murray, Kentucky. In the Murray area, local real estate agents like those at Kopperud Realty (established 1972) and Century 21 Service Realty specialize in investment properties and understand the local vacation rental market dynamics. National services include Mashvisor, which provides Airbnb analytics and property search tools, AirDNA for market data and revenue projections, and RedAwning for vacation rental investment opportunities. Local property management companies such as Murray Property Management and Lakeshore Vacation Rentals can assist with both acquisition advice and ongoing management of Airbnb investments. BiggerPockets, the national real estate investment community, offers resources and connections for short-term rental investors, while Awning provides end-to-end Airbnb investment services including market analysis and property management. Regional firms like Lake Realty and Keller Williams offices in nearby Paducah also work with investors seeking vacation rental properties in the Kentucky Lake region where Murray is located.