Is Nicholasville, Kentucky Good for Airbnb Investment?

To start an Airbnb in Nicholasville, Kentucky, begin by researching local zoning laws and regulations through the Nicholasville Planning and Zoning Department, as the city requires short-term rental operators to obtain a business license and comply with residential zoning restrictions that typically limit rentals to no more than 30% of units in residential areas. Contact Jessamine County for any additional county-level permits and ensure compliance with Kentucky state tax requirements including the 6% sales tax on lodging. Find a suitable property by searching residential areas near downtown Nicholasville or properties with easy access to Keeneland Race Course and Lexington attractions, considering properties that meet the city's safety requirements including smoke detectors, carbon monoxide detectors, and proper egress windows. Furnish the space with quality furniture, linens, and amenities while ensuring compliance with local fire safety codes and ADA accessibility requirements where applicable. Create your Airbnb listing with professional photos highlighting proximity to horse farms, Keeneland, and Lexington (15 minutes away), setting competitive rates based on local market research showing average nightly rates of $80-150 depending on property size and location. Manage your property by establishing cleaning protocols, guest communication systems, and maintaining compliance with Nicholasville's noise ordinances and parking requirements, while collecting and remitting the required local occupancy taxes to both the city and state revenue departments.

To identify profitable STR properties in Nicholasville, Kentucky, focus on locations within 15-20 minutes of Lexington's downtown core, near Keeneland Race Course, or close to Kentucky Horse Park, as these areas attract tourists and business travelers year-round. Target 3-4 bedroom single-family homes or townhomes built after 1990 with modern amenities, full kitchens, parking, and outdoor spaces, as families and groups visiting for horse racing events prefer these features. Conduct pricing analysis using AirDNA and Mashvisor to identify properties where potential STR revenue exceeds traditional rental income by 40-60%, typically finding sweet spots in the $200,000-$350,000 purchase range. Research competition by analyzing existing Airbnb and VRBO listings within a 5-mile radius, identifying gaps in amenities or pricing, and noting that successful properties often charge $120-$200 per night during peak racing seasons. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through Lexington Board of Realtors, while connecting with property managers like RedAwning or local companies such as Bluegrass Property Management who understand Nicholasville's seasonal tourism patterns and can provide market-specific occupancy rate data typically ranging from 60-75% annually.

To obtain an Airbnb/STR permit in Nicholasville, Kentucky, you must first contact the Nicholasville Planning and Zoning Department at City Hall located at 132 South Main Street to determine if short-term rentals are permitted in your specific zoning district, as the city requires conditional use permits for STRs in most residential areas. You'll need to submit an application for a conditional use permit along with required documents including a site plan, proof of property ownership or lease agreement, floor plans showing maximum occupancy, parking plan demonstrating adequate off-street parking, and a detailed operational plan addressing noise control, trash management, and guest check-in procedures. The application fee is approximately $200-300, and you may need additional permits such as a business license ($50-75) and potentially a fire safety inspection if occupancy exceeds six guests. The timeline typically takes 30-60 days as your application must be reviewed by planning staff and may require a public hearing before the Planning and Zoning Commission. Specific Nicholasville requirements include maintaining a local contact person available 24/7, limiting occupancy to no more than two guests per bedroom plus two additional guests, providing adequate parking spaces (typically one space per bedroom), ensuring compliance with all building and fire codes, and maintaining the property's residential character without external signage or commercial appearance.

Short-term rentals (STRs) are generally legal in Nicholasville, Kentucky, as the city has not enacted specific prohibitions against them as of 2023. However, STR operators must comply with standard zoning regulations, business licensing requirements, and health and safety codes that apply to all rental properties in the city. The primary restrictions typically involve ensuring properties meet residential zoning compliance, obtaining proper business licenses, and adhering to occupancy limits and parking requirements. Unlike some larger Kentucky cities such as Louisville or Lexington that have implemented more comprehensive STR regulations, Nicholasville has maintained a relatively permissive approach while still requiring basic regulatory compliance. Property owners should verify current zoning designations for their specific locations, as some residential areas may have restrictions on commercial activities, and ensure they obtain any necessary permits from the city before operating an STR. Recent years have seen increased attention to STR regulation across Kentucky municipalities, but Nicholasville has not implemented major restrictive changes, though operators should stay informed about potential future regulatory developments at both city and county levels.

The best areas for Airbnb investment in Nicholasville, Kentucky include the Historic Downtown District near Main Street, which attracts visitors interested in local charm and walkability to restaurants and shops, and properties near the Kentucky Horse Park corridor along US-27, capitalizing on equestrian tourism and proximity to Lexington's horse industry events. The Brannon Crossing area offers appeal for business travelers and families visiting the University of Kentucky, being only 15 minutes from Lexington while providing more affordable accommodation options. Neighborhoods near Jessamine Creek Park and the Legacy Trail attract outdoor enthusiasts and families seeking recreational activities, while properties along the Nicholasville Road corridor benefit from easy highway access for guests attending events at Rupp Arena, Keeneland Race Course, or Kentucky venues. The residential areas near East Jessamine High School and Nicholasville Elementary provide quiet, family-friendly accommodations for visitors attending local events, youth sports tournaments, or extended stays for temporary work assignments at nearby Toyota Manufacturing or other regional employers.

In Nicholasville, 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. Additionally, hosts must collect Jessamine County's local transient room tax of 3%, bringing the total occupancy tax rate to 9%. These taxes are collected from guests at the time of booking and must be remitted monthly to the Kentucky Department of Revenue by the 20th of the following month using Form 51A111. Hosts earning over $4,000 annually in rental income must register for a Kentucky sales tax permit and file returns even if no tax is owed. The city of Nicholasville does not impose additional lodging taxes beyond the county rate. Exemptions include rentals to permanent residents (30+ consecutive days), rentals to government employees on official business, and accommodations provided to certain nonprofit organizations. Airbnb may collect and remit these taxes on behalf of hosts through their platform's tax collection service, but hosts remain ultimately responsible for compliance and should verify that taxes are being properly collected and remitted.

The total cost to start an Airbnb in Nicholasville, Kentucky is approximately $195,000-$225,000. Property purchase costs around $180,000 based on the median home price in the area as of 2023. Furnishing a 2-3 bedroom property requires $8,000-$12,000 for quality furniture, appliances, linens, and decor to create an attractive rental space. Initial setup costs including professional photography, listing creation, and basic renovations total $2,000-$3,000. Permits and fees including business license, short-term rental permit, and city registration fees cost approximately $500-$800 annually. Insurance for short-term rentals runs $1,200-$1,800 per year, significantly higher than standard homeowner's insurance. Utilities including electricity, water, internet, cable, and cleaning services average $300-$400 monthly. First six months of operating costs including utilities, insurance, maintenance, supplies, and platform fees total approximately $3,500-$5,000, assuming moderate occupancy rates during the initial period.

Airbnb properties in Nicholasville, Kentucky 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%), utilities ($150-250 monthly), insurance ($800-1,200 annually), and maintenance costs averaging $2,000-4,000 yearly. Properties within 15 miles of Keeneland Race Course and Kentucky Horse Park command premium rates during racing seasons (April and October), with some hosts reporting 80-90% occupancy and $150+ nightly rates during these peak periods. Three-bedroom homes near downtown Nicholasville typically achieve 55-70% annual occupancy rates and net profit margins of 25-35% after all expenses, translating to $8,000-$15,000 annual profit for well-managed properties. Success factors include proximity to Lexington (12 miles), horse farm tourism appeal, competitive pricing below Lexington rates while offering suburban charm, professional photography, and responsive guest communication, with properties featuring horse-themed decor or farm views consistently outperforming generic listings by 15-25% in both occupancy and rates.

Airbnb investments in Nicholasville, Kentucky typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% based on current market conditions. Properties in desirable neighborhoods near Keeneland Race Course and downtown Lexington (15 minutes away) command premium rates of $80-120 per night with 60-70% occupancy rates during peak seasons including Kentucky Derby week and horse racing events. Initial investment recovery and profitability typically occurs within 18-24 months for well-positioned properties, with investors seeing monthly gross revenues of $1,200-2,000 per property. The market benefits from proximity to University of Kentucky, Lexington's corporate travelers, and equestrian tourism, with properties requiring initial investments of $150,000-250,000 for suitable 2-3 bedroom homes generating net annual returns of $12,000-20,000 after expenses including property management, utilities, and maintenance costs.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for investors looking in Nicholasville, Kentucky. Local real estate agents like Coldwell Banker McMahan and The Hagan Group at Keller Williams have experience with investment properties in the Nicholasville area and understand the local vacation rental market dynamics. National services include AirDNA for market analysis and revenue projections, Mashvisor for property investment analytics, and BiggerPockets for connecting with local investors and agents. RedAwning and Vacasa offer property management services that can help investors evaluate potential returns. Local Kentucky-based companies like Kentucky Select Properties and Bluegrass Team Realty have agents familiar with the Jessamine County market where Nicholasville is located. Additional national platforms like Roofstock, which expanded into short-term rental investments around 2021, and AvantStay, which focuses on group bookings, can provide insights into profitable property acquisition in the area.