Is Rugby, Tennessee Good for Airbnb Investment?

To start an Airbnb in Rugby, Tennessee, begin by researching local zoning laws through Scott County Planning Commission and Tennessee Department of Commerce regulations, as Rugby falls under Scott County jurisdiction which typically allows short-term rentals in residential areas with proper registration. Obtain necessary permits including a business license from Scott County Clerk ($15-50), Tennessee sales tax permit from the Department of Revenue, and register with the Tennessee Department of Commerce for short-term rental tax collection (approximately 13.25% total tax rate). Find suitable property in Rugby's historic district or surrounding areas, with average home prices ranging $80,000-150,000, ensuring the property meets Tennessee fire safety codes and ADA accessibility requirements where applicable. Furnish the space with period-appropriate decor reflecting Rugby's Victorian heritage, including essential amenities like WiFi, heating/cooling, full kitchen, and quality bedding, budgeting $8,000-15,000 for complete furnishing. List your property on Airbnb, VRBO, and Booking.com with competitive pricing around $75-125 per night based on Rugby's tourism market, highlighting proximity to Big South Fork National River and Rugby's historic attractions. Manage the property by establishing cleaning protocols between guests, maintaining 24/7 communication availability, coordinating with local cleaning services in nearby Huntsville or Oneida, and ensuring compliance with Tennessee's 30-day maximum stay regulations while collecting and remitting required state and local taxes quarterly through the Tennessee Taxpayer Access Point system.

To identify profitable short-term rental properties in Rugby, Tennessee, focus on properties within 2-3 miles of Big South Fork National River and Recreation Area and near Gentlemen's Swimming Hole, as this historic planned community attracts tourists interested in Victorian architecture and outdoor recreation. Target 2-4 bedroom cabins or historic homes built between 1880-1920 with original architectural details, modern amenities like WiFi and updated kitchens, outdoor spaces, and parking for multiple vehicles. Analyze comparable STR rates using AirDNA and Mashvisor, expecting average daily rates of $120-180 for well-appointed properties with 60-75% occupancy during peak seasons (April-October), while monitoring seasonal fluctuations tied to hiking and recreation activities. Research competition by analyzing the 15-25 existing STRs in the area through Airbnb and VRBO, noting that properties with unique historical features or premium outdoor amenities command 20-30% higher rates. Utilize tools like AirDNA for market analytics, STR Helper for revenue projections, and local resources including Scott County tourism data, Big South Fork visitor statistics, and networking with Rugby Restoration Association to understand tourism patterns and regulatory requirements specific to this National Historic Landmark community.

To obtain an Airbnb/STR permit in Rugby, Tennessee, you must first contact the Scott County Planning and Zoning Department at 423-663-2444 or visit their office at 283 Court Street in Huntsville, as Rugby falls under Scott County jurisdiction. Required documents typically include a completed short-term rental application, proof of property ownership or lease agreement, certificate of occupancy, fire safety inspection certificate from the local fire department, liability insurance policy with minimum $1 million coverage, site plan showing parking areas, septic system inspection (if applicable), and Tennessee state business license. The application fee is approximately $150-200 with an annual renewal fee of $100-125. Submit your complete application to Scott County Planning Department, schedule required inspections with the building inspector and fire marshal within 2-3 weeks, address any compliance issues identified during inspections, and await final approval which typically takes 4-6 weeks total. Rugby-specific requirements include maintaining adequate parking for guests, ensuring septic systems can handle increased occupancy, complying with historic district guidelines if your property is within Rugby's historic area, providing emergency contact information to neighbors, and adhering to occupancy limits based on bedroom count and septic capacity. Once approved, display your permit number in all online listings and renew annually by December 31st.

Short-term rentals (STRs) are generally legal in Rugby, Tennessee, as the small unincorporated community in Morgan County operates under Tennessee state law, which permits STRs statewide as of 2016 legislation. However, Rugby falls under Morgan County's jurisdiction, which may impose local regulations such as registration requirements, occupancy limits, and safety standards including smoke detectors and fire extinguishers. The historic nature of Rugby as a Victorian-era planned community founded in 1880 may subject some properties to additional historic preservation guidelines that could affect renovations for STR use. There are typically no specific prohibited areas within Rugby itself due to its small size and rural character, though properties must comply with any applicable zoning restrictions and homeowners association rules if present. Recent changes in Tennessee law have strengthened property owner rights to operate STRs while allowing counties to implement reasonable health and safety regulations, and Morgan County has likely updated its ordinances accordingly since 2020-2022 to balance tourism benefits with community concerns about noise and parking in this small historic settlement.

The best areas for Airbnb investment in Rugby, Tennessee include the historic Rugby Colony district itself, which attracts heritage tourists visiting the Victorian-era English settlement founded in 1880, and properties near the Big South Fork National River and Recreation Area, drawing outdoor enthusiasts year-round for hiking, fishing, and camping activities. The downtown Rugby area around the Rugby Schoolhouse Visitor Centre and Christ Church Episcopal offers strong potential due to proximity to guided tours and cultural events, while locations near Highway 52 provide convenient access for visitors traveling between Nashville and Knoxville who use Rugby as a scenic stopover. Properties within walking distance of the Rugby Commissary and other restored buildings benefit from the steady flow of history buffs and genealogy researchers, particularly during peak tourism months of April through October when the Thomas Hughes Free Public Library and other attractions host special events and workshops celebrating the area's unique Anglo-American heritage.

Airbnb properties in Rugby, Tennessee are subject to Tennessee state sales tax of 7% on short-term rental accommodations, which is automatically collected by Airbnb through their platform and remitted directly to the Tennessee Department of Revenue on behalf of hosts. Additionally, Morgan County (where Rugby is located) imposes a local occupancy tax of approximately 5% on lodging stays under 30 days, which hosts must typically collect from guests and remit quarterly to the county tax assessor's office using Form CT-1. The combined effective tax rate is around 12% for most Airbnb stays in Rugby. Tennessee exempts stays of 30 days or longer from these occupancy taxes, and certain nonprofit or government-related accommodations may qualify for exemptions with proper documentation. Hosts should register with both the state and county tax authorities, maintain detailed records of all bookings and tax collections, and file returns even during periods with no rental activity to remain compliant with local tax obligations.

To start an Airbnb in Rugby, Tennessee, expect total costs around $185,000-$220,000. Property purchase represents the largest expense at approximately $150,000-$180,000 for a median 2-3 bedroom home in this rural Tennessee community. Furnishing costs typically range $8,000-$12,000 including beds, linens, kitchen essentials, living room furniture, and basic appliances. Initial setup costs add $2,000-$3,500 covering professional photography, listing creation, welcome materials, and basic renovations or touch-ups. Permits and fees total $500-$1,200 including business license, short-term rental permit, and potential HOA approvals. Insurance costs $1,200-$2,000 annually for short-term rental coverage beyond standard homeowner's insurance. Utilities setup and deposits require $300-$500 for electricity, water, internet, and cable services. First six months operating costs add $3,000-$4,500 covering utilities, cleaning services, maintenance, supplies, platform fees, and marketing expenses. Additional considerations include potential property management fees if outsourcing operations and emergency repair funds, making the conservative total startup investment approximately $165,000-$203,700 depending on property condition and furnishing quality chosen.

Airbnb properties in Rugby, Tennessee show moderate profitability potential with average nightly rates ranging from $75-120 for typical 2-3 bedroom homes, generating approximately $18,000-28,000 in annual gross revenue assuming 60-70% occupancy rates. Operating expenses typically consume 40-50% of gross revenue, including cleaning fees ($30-50 per turnover), property management (15-25%), utilities ($150-200 monthly), insurance ($1,200-1,800 annually), and maintenance costs ($2,000-3,500 yearly). Net profit margins generally range from 15-25% after expenses, translating to $3,000-6,000 annual profit per property. Success factors in this rural Tennessee market include proximity to outdoor recreation areas like Big South Fork National River, competitive pricing against nearby Cookeville and Crossville markets, and targeting weekend getaway travelers from Nashville (90 minutes away) and Knoxville (75 minutes away). Properties with unique features like hot tubs, fire pits, or scenic views command premium rates of $130-180 nightly. The limited local hotel inventory creates opportunity, though seasonal demand fluctuations and lower population density compared to urban markets require strategic marketing and pricing optimization to achieve sustainable profitability.

Based on Rugby, Tennessee 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 within the area. Properties near Rugby's historic district and outdoor recreation areas like Big South Fork National River tend to perform at the higher end of this range, achieving 15-18% annual returns due to consistent tourist demand from visitors exploring the English settlement history and nearby hiking trails. Initial profitability usually occurs within 18-24 months for well-positioned properties, with break-even on cash investment typically reached by month 14-20. The seasonal nature of tourism in this region means peak performance during spring through fall months (April-October) when outdoor activities and historical tours drive occupancy rates to 65-75%, while winter months see reduced activity at 35-45% occupancy, resulting in blended annual occupancy rates of 55-65% for successful properties.

STRSearch is a national platform that helps investors identify profitable short-term rental properties across markets including Rugby, Tennessee. For local expertise in the Rugby area, real estate agents like those at Realty Executives Associates and Century 21 Cumberland Realty have experience with investment properties in rural Tennessee markets. Awning, a national service founded in 2018, provides Airbnb investment property identification and management services that cover Tennessee markets. Mashvisor offers data analytics for short-term rental investments and covers smaller Tennessee markets. Local agents at RE/MAX Real Estate Ten and Coldwell Banker McMahan Co. have knowledge of the Morgan County area where Rugby is located. RedAwning provides vacation rental investment consulting services nationally including Tennessee. AirDNA offers market data and analytics for short-term rental investments in Tennessee markets. For property management after purchase, companies like AvantStay and Vacasa operate in Tennessee, while local property managers in the Cookeville and Oak Ridge areas may service the Rugby region given its location in the Cumberland Plateau.