Is Oak Ridge, Tennessee Good for Airbnb Investment?

To start an Airbnb in Oak Ridge, Tennessee, begin by researching local regulations through the Oak Ridge City Planning Department, as the city requires short-term rental permits and compliance with zoning ordinances that typically allow STRs in residential areas with restrictions on occupancy and parking. Contact the Anderson County Clerk's office to obtain a business license (approximately $50-100) and register for state sales tax collection with the Tennessee Department of Revenue, as you'll need to collect 9.75% state sales tax plus local hotel occupancy taxes. Find a suitable property by searching areas near Oak Ridge National Laboratory, the American Museum of Science and Energy, or downtown districts, with average property prices ranging $150,000-300,000 for suitable homes. Furnish the property with essential amenities including WiFi, kitchen appliances, linens, and safety equipment like smoke detectors and fire extinguishers as required by Tennessee fire codes. Create your listing on Airbnb, VRBO, and Booking.com with professional photos, competitive pricing around $80-150 per night based on local market rates, and highlight proximity to ORNL and outdoor activities at Melton Lake Park. For ongoing management, establish cleaning protocols between guests, maintain 24/7 communication availability, coordinate with local cleaning services like Molly Maid or independent contractors, and consider property management companies such as RedAwning or local firms if you prefer hands-off management, while ensuring compliance with Oak Ridge's noise ordinances and parking requirements that typically limit occupancy to 2 people per bedroom plus 2 additional guests.

To identify profitable short-term rental properties in Oak Ridge, Tennessee, focus on locations within 2-3 miles of Oak Ridge National Laboratory and Y-12 National Security Complex, as these drive significant business travel demand, along with properties near Melton Lake and the American Museum of Science and Energy for leisure guests. Target 2-4 bedroom single-family homes or condos built after 1990 with modern amenities, full kitchens, dedicated workspaces, reliable high-speed internet, and parking, as corporate travelers and visiting scientists often stay 1-2 weeks and value comfort and functionality. Analyze pricing using AirDNA and Mashvisor to benchmark against the limited competition, aiming for $80-150 per night depending on size and amenities, while monitoring occupancy rates of existing STRs which typically run 60-75% annually due to consistent government contractor and research facility demand. Research competition through Airbnb, VRBO, and local property management companies like Smoky Mountain Vacation Rentals, noting that Oak Ridge has relatively few STRs compared to nearby Gatlinburg, creating opportunity for well-positioned properties. Utilize STR-specific tools like AirDNA for market analysis, Rabbu for revenue projections, and connect with local real estate agents familiar with investment properties, while ensuring compliance with Knox County short-term rental regulations and considering the stable, year-round demand from the scientific and government contractor community that makes Oak Ridge unique among Tennessee STR markets.

To obtain an Airbnb/STR permit in Oak Ridge, Tennessee, you must first contact the Oak Ridge Planning Department at City Hall located at 200 S. Tulane Avenue to determine if short-term rentals are permitted in your specific zoning district, as the city requires compliance with local zoning ordinances. Submit an application for a business license through the City Clerk's office, providing required documents including proof of property ownership or lease agreement, liability insurance certificate (minimum $1 million coverage), floor plan of the rental unit, parking plan showing adequate off-street parking, and contact information for a local property manager if you live more than 50 miles away. The application fee is approximately $150-200 annually, with additional inspection fees of around $75. Oak Ridge requires STR properties to maintain occupancy limits based on bedroom count (typically 2 guests per bedroom plus 2 additional), provide smoke and carbon monoxide detectors in all sleeping areas, maintain a guest registry, and display the permit number in all advertising. The approval process typically takes 4-6 weeks including zoning review and safety inspection. Once approved, you must renew the permit annually and comply with Tennessee state tax requirements by registering with the Department of Revenue for sales tax collection on rental income.

Short-term rentals (STRs) are legal in Oak Ridge, Tennessee, but operate under specific municipal regulations that require property owners to obtain a business license and comply with zoning restrictions. The city allows STRs in residential areas but requires operators to register with the city, maintain liability insurance, and ensure properties meet safety standards including smoke detectors and carbon monoxide detectors. Oak Ridge prohibits STRs in certain residential zones where they would conflict with single-family housing character, and operators must limit occupancy based on bedroom count and parking availability. Recent changes in 2022-2023 have strengthened enforcement mechanisms and increased penalties for non-compliance, while also establishing clearer guidelines for noise complaints and neighbor notification procedures. The city requires a 24-hour contact person for each STR property and mandates that operators respond to complaints within two hours, with violations potentially resulting in license suspension or revocation.

The best Airbnb investment areas in Oak Ridge, Tennessee include the historic Jackson Square district near downtown, which attracts visitors to the American Museum of Science and Energy and Oak Ridge National Laboratory business travelers; the Woodland area close to the Oak Ridge Reservation where many Department of Energy contractors and researchers need temporary housing; neighborhoods near the Oak Ridge Marina and Melton Lake for outdoor recreation tourists visiting Norris Dam State Park and Big South Fork; the West Oak Ridge area along Illinois Avenue for its proximity to both ORNL and the Secret City Festival venues; and properties near the Oak Ridge Turnpike corridor which provide easy access to Knoxville attractions while offering lower accommodation costs than downtown Knoxville hotels, making them attractive to visitors attending University of Tennessee events, medical patients at UT Medical Center, and tourists exploring the broader East Tennessee region including Great Smoky Mountains National Park.

In Oak Ridge, Tennessee, Airbnb hosts are subject to both state and local lodging taxes that must be collected from guests and remitted to appropriate authorities. The Tennessee state sales tax rate of 7% applies to short-term rental accommodations, along with the state hotel occupancy tax of 3%, for a combined state rate of 10%. Anderson County, where Oak Ridge is located, imposes an additional 5% hotel/motel tax, bringing the total occupancy tax to approximately 15% on gross rental receipts. Oak Ridge may also impose its own local hotel/motel tax of up to 5%, potentially making the total tax burden around 20%. These taxes are typically collected by the host at the time of booking or check-in and must be remitted monthly to the Tennessee Department of Revenue for state portions and to Anderson County and Oak Ridge for local portions, with returns generally due by the 20th of the following month. Airbnb may collect and remit some of these taxes automatically in certain jurisdictions, but hosts should verify their specific obligations with local tax authorities. Exemptions are generally limited and may include stays exceeding 30 consecutive days, which would be considered long-term rentals rather than transient accommodations, and certain government or non-profit organization bookings, though documentation is typically required to qualify for exemptions.

Starting an Airbnb in Oak Ridge, Tennessee requires approximately $180,000-220,000 in total initial investment. Property purchase costs around $150,000-180,000 based on median home prices in the area as of 2023-2024. Furnishing a 2-3 bedroom property typically runs $8,000-12,000 including beds, linens, kitchen essentials, living room furniture, and basic appliances. Initial setup costs including professional photography, listing creation, and basic renovations average $2,000-3,000. Permits and fees in Anderson County include business license ($50-100), short-term rental permit ($200-400), and potential HOA approval fees totaling around $500-800. Insurance for short-term rentals costs approximately $1,200-1,800 annually, with an upfront payment of $300-450. Utility deposits and connections for electricity, water, internet, and cable run about $400-600. First six months of operating costs including utilities ($150/month), cleaning services ($75 per turnover), supplies and maintenance ($100/month), platform fees (3% of bookings), and property management if outsourced (20-30% of revenue) total approximately $3,000-5,000 depending on occupancy rates and booking frequency.

Airbnb properties in Oak Ridge, Tennessee typically generate annual revenues between $18,000-$35,000 for entire homes and $8,000-$15,000 for private rooms, with average daily rates ranging from $65-$120 depending on property size and amenities. 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 ($2,000-$4,000 yearly). Net profit margins typically range from 15-35% for well-managed properties, with higher margins achieved by hosts who self-manage and maintain high occupancy rates of 60-75%. Success factors in Oak Ridge include proximity to Oak Ridge National Laboratory which drives consistent business traveler demand, competitive pricing below nearby Knoxville markets, professional photography, responsive communication, and leveraging the area's outdoor recreation attractions like Norris Dam State Park. Properties within 10 miles of ORNL and those offering amenities like dedicated workspaces, fast WiFi, and kitchen facilities tend to outperform the market average by 20-30%, with some hosts reporting annual returns of 8-12% on their initial property investment when factoring in both rental income and property appreciation.

Airbnb investments in Oak Ridge, Tennessee typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, driven by the city's proximity to Oak Ridge National Laboratory and steady demand from visiting researchers, contractors, and tourists exploring the area's Manhattan Project history. Properties near the laboratory or downtown area command premium rates of $80-120 per night, with occupancy rates averaging 65-75% annually, allowing investors to reach profitability within 18-24 months depending on initial investment and property condition. The market benefits from consistent year-round demand due to Oak Ridge National Laboratory's operations, with seasonal peaks during summer months when families visit the American Museum of Science and Energy and other historical attractions, making well-located properties particularly attractive for investors seeking stable returns in a smaller Tennessee market with lower competition than Nashville or Knoxville.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties in Oak Ridge, Tennessee, providing market analysis and investment insights. Local real estate agents specializing in Airbnb investments in Oak Ridge include Realty Executives Associates and Century 21 Legacy, with agents like those at Coldwell Banker Wallace & Wallace having experience in investment properties. National services include AirDNA for market data analysis, Mashvisor for property investment analytics, and BiggerPockets for investor networking and deal sourcing. RedAwning and Awning.com offer property management and investment guidance services. Local property management companies like East Tennessee Property Management and Smoky Mountain Property Management can assist with Airbnb operations. Real estate investment firms such as Roofstock and Arrived Homes occasionally feature Tennessee markets, while local investors often work with RE/MAX Realty Professionals and Keller Williams Realty for finding suitable properties in the Oak Ridge area that can be converted to profitable short-term rentals.