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 Murray typically requires short-term rentals to comply with residential zoning restrictions and may require a business license from the city clerk's office. Obtain necessary permits including a Kentucky sales tax permit from the Department of Revenue since you'll need to collect and remit state sales tax, and check if Murray requires a specific short-term rental permit or occupancy permit from the building inspector. Find a suitable property by searching residential areas near Murray State University or downtown Murray, ensuring the property meets safety codes and has adequate parking as required by local ordinances. Furnish the space with quality furniture, linens, and amenities while ensuring compliance with Kentucky fire safety codes including smoke detectors and carbon monoxide detectors in appropriate locations. Create your Airbnb listing with professional photos highlighting Murray's proximity to Kentucky Lake and Land Between the Lakes recreation area, set competitive pricing based on local market rates typically ranging $60-120 per night depending on property size and location. Manage your property by establishing cleaning protocols between guests, maintaining responsive communication with visitors, and keeping detailed records for tax purposes including the 6% Kentucky sales tax and any local occupancy taxes that Murray may implement, while also considering property management software or local cleaning services to streamline operations.

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 waterfront areas, and close to downtown Murray's historic district and business corridor. Target 2-4 bedroom properties with modern amenities, full kitchens, reliable WiFi, parking, and outdoor spaces like patios or decks that appeal to university visitors, lake tourists, and business travelers. Analyze pricing by researching comparable STRs on Airbnb and VRBO, aiming for properties that can generate $80-150 per night depending on size and location, with peak rates during university events, graduation, and summer lake season. Study competition by examining occupancy rates, guest reviews, and pricing strategies of existing rentals within a 5-mile radius, particularly those near campus and lake access points. Utilize tools like AirDNA for market analytics, Mashvisor for investment analysis, and local resources including Murray Tourism Commission data, Murray State University event calendars, and Kentucky Lake visitor statistics to understand seasonal demand patterns and optimize your investment strategy for this college town and recreational lake market.

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 occupancy, proof of liability insurance (typically $1 million minimum), fire safety inspection certificate from the Murray Fire Department, and health department approval if applicable. The business license fee is approximately $25-50 annually, with additional inspection fees ranging from $50-100 per inspection. You must also register with the Kentucky Department of Revenue for state tax collection purposes and obtain any required state business licenses. The entire process typically takes 2-4 weeks depending on inspection scheduling and document processing. Murray may require compliance with parking requirements (usually 1-2 spaces per unit), occupancy limits based on square footage and bedrooms, noise ordinances, and regular safety inspections. Contact Murray City Hall at (270) 762-0350 to confirm current requirements, as local STR regulations can change frequently and some areas may have temporary moratoriums on new permits.

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 emergency contact information and maintain liability insurance. Murray has implemented occupancy limits based on property size and parking requirements, with some restrictions on the number of guests and vehicles allowed. The city also requires operators to collect and remit local occupancy taxes, and there are noise ordinances and good neighbor policies in place to address community concerns. Recent changes have included stricter enforcement mechanisms and clearer guidelines for compliance, with the city conducting periodic reviews of STR regulations to balance tourism benefits with residential neighborhood preservation.

The best areas for Airbnb investment in Murray, Kentucky are downtown Murray near the historic courthouse square, the neighborhoods surrounding Murray State University campus particularly along Main Street and 16th Street, and properties near Kentucky Lake and Lake Barkley recreational areas. Downtown Murray attracts visitors for its charming historic district, local festivals, and proximity to restaurants and shops, while the university area generates consistent demand from visiting families during graduation, homecoming, and sporting events, as well as prospective students and their families touring the campus. The lake districts, especially areas near Kentucky Dam Village State Resort Park and the Land Between the Lakes National Recreation Area, are highly attractive for vacation rentals due to fishing tournaments, boating enthusiasts, and outdoor recreation visitors who prefer private accommodations over hotels. Properties within walking distance of the CFSB Center (Murray State's basketball arena) and near the university's agricultural and veterinary programs also perform well due to academic conferences and sporting events throughout the year.

In Murray, Kentucky, Airbnb hosts are subject to both state and local lodging taxes. The Kentucky state transient room tax is 1% on gross rental receipts, while Murray imposes a local transient room tax of 3%, bringing the total occupancy tax rate to 4% for short-term rentals. These taxes apply to rentals of less than 30 consecutive days and are collected from guests at the time of booking, with Airbnb automatically collecting and remitting the state portion directly to the Kentucky Department of Revenue as of 2019. However, hosts are typically responsible for collecting and remitting the local 3% Murray tax directly to the Murray Tourism Commission on a monthly basis by the 20th of the following month, using forms provided by the city. Properties rented for 30 days or longer are generally exempt from these transient occupancy taxes, and some jurisdictions may provide exemptions for rentals to permanent residents or government employees, though hosts should verify current exemption criteria with local tax authorities as regulations can change.

To start an Airbnb in Murray, Kentucky, expect total costs around $180,000-$220,000. Property purchase represents the largest expense at approximately $150,000 based on Murray's median home price in 2023. Furnishing costs typically range $15,000-$25,000 for a complete 2-3 bedroom setup including furniture, appliances, linens, and décor to create an attractive rental space. Initial setup costs including professional photography, listing creation, and basic renovations average $3,000-$5,000. Permits and fees in Murray include business license ($50-$100), potential zoning permits ($200-$500), and any required safety inspections totaling around $500-$1,000. Insurance costs run $1,200-$2,000 annually for short-term rental coverage. Utilities including electricity, water, internet, and cable average $200-$300 monthly or $1,200-$1,800 for six months. First six months operating costs encompass cleaning services ($100-$150 per turnover), maintenance reserves ($500-$1,000), marketing ($300-$500), and platform fees to Airbnb averaging 3% of bookings, totaling approximately $3,000-$5,000 depending on occupancy rates.

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-$1,500 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. Successful operators in Murray focus on targeting university visitors, lake tourists, and business travelers, with profit margins typically ranging from 15-25% after all expenses. Properties that cater to families visiting students or lake recreation enthusiasts, featuring amenities like boat parking or proximity to campus, tend to outperform generic listings by 20-30% in both occupancy and pricing power, resulting in annual net profits of $8,000-$15,000 for well-managed properties.

Based on Murray, Kentucky's market conditions as a college town with Murray State University and proximity to Kentucky Lake recreational areas, Airbnb investments typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-15% depending on property type and location. Properties near the university or lake access points command higher nightly rates of $80-150, while standard residential properties average $60-100 per night with 60-75% occupancy rates during peak academic and summer seasons. Initial profitability usually occurs within 18-24 months, with full investment recovery expected in 6-8 years for well-positioned properties. The market benefits from consistent demand from university visitors, lake tourists, and business travelers, though seasonal fluctuations occur during winter months and university breaks, requiring investors to maintain 3-6 months of operating reserves for optimal cash flow management.

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, Century 21 Service Realty, and Crye-Leike Realty have experience with investment properties and vacation rentals near Kentucky Lake. National services include AirDNA for market analysis, Mashvisor for property analytics, and BiggerPockets for investor networking and deal sourcing. RedAwning and Vacasa offer property management services that can help investors understand the rental potential of properties in Murray. Local property management companies like Kentucky Lake Vacation Rentals and Murray State University area rental specialists understand the seasonal tourism patterns around Kentucky Lake and can provide insights into profitable Airbnb locations. Real estate investment platforms like Roofstock and Fundrise occasionally feature Kentucky properties, while local investors often work with Murray-based agents familiar with lakefront properties, downtown historic homes, and university-adjacent rentals that perform well as short-term accommodations.