Is Smithfield, Kentucky Good for Airbnb Investment?

To start an Airbnb in Smithfield, Kentucky, begin by researching local regulations through Henry County's planning and zoning office, as Smithfield typically follows county ordinances that may require short-term rental permits or business licenses, with potential restrictions in residential zones. Contact the Henry County Clerk's office at (502) 845-5705 to obtain necessary business licenses and check if a transient room tax permit is required, while also verifying homeowner's insurance covers short-term rentals or purchasing additional coverage. Find a suitable property by searching MLS listings through local realtors like Coldwell Banker or RE/MAX agents familiar with Henry County, focusing on properties near Kentucky Lake or historic downtown areas that attract tourists, with typical home prices ranging $80,000-$200,000 as of 2023. Furnish the property with essential amenities including quality mattresses, linens, towels, kitchen supplies, WiFi, and local guidebooks, budgeting approximately $5,000-$15,000 for a complete setup depending on property size. Create your Airbnb listing with professional photos highlighting unique features like proximity to Kentucky Lake recreation or bourbon trail attractions, setting competitive rates around $75-$150 per night based on local market analysis. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating key exchanges through lockboxes or smart locks, and maintaining relationships with local cleaning services and handymen for ongoing maintenance, while tracking income for tax purposes and remitting any required local occupancy taxes to Henry County.

To identify profitable STR properties in Smithfield, Kentucky, focus on locations within 2-3 miles of major attractions like Kentucky Kingdom, the Louisville Zoo, or downtown Louisville since Smithfield benefits from proximity to these destinations while offering lower property costs. Target 3-4 bedroom single-family homes or duplexes built after 1980 with modern amenities, full kitchens, parking, and outdoor spaces that can accommodate 6-8 guests, as families and groups visiting Louisville often seek suburban alternatives. Conduct pricing analysis using AirDNA and Mashvisor to identify properties under $150,000 that can generate $100-150 per night, aiming for 60-70% occupancy rates during peak seasons (Kentucky Derby, summer months, and fall). Research competition within a 5-mile radius using Airbnb and VRBO searches to identify gaps in amenities or pricing, particularly focusing on properties that lack professional photography, consistent availability, or family-friendly features. Utilize tools like BiggerPockets for investment analysis, STR Helper for revenue projections, and local resources such as Jefferson County property records, Louisville MLS data, and Kentucky tourism statistics to validate demand patterns, with particular attention to corporate housing needs from nearby businesses and overflow demand from Louisville's limited hotel inventory during major events.

To obtain an Airbnb/STR permit in Smithfield, Kentucky, contact the Smithfield City Clerk's office at City Hall located at 130 Main Street or call (502) 845-2251 to begin the application process. You'll need to submit a completed business license application, property deed or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental unit, contact information for a local property manager if you're not local, and pay a $150 annual permit fee plus a $50 application processing fee. Required documents also include a fire safety inspection certificate from the local fire department, health department approval for properties with more than 4 units, and proof of compliance with zoning regulations. The city requires STR properties to maintain off-street parking for each rental unit, display the permit number in all advertisements, maintain a guest registry, and ensure quiet hours from 10 PM to 7 AM. The approval timeline is typically 30-45 days after submitting a complete application, and permits must be renewed annually by December 31st. Properties must also comply with Kentucky state tax requirements and register with the Department of Revenue for transient room tax collection.

Short-term rentals (STRs) in Smithfield, Kentucky operate in a largely unregulated environment at the local level, as this small city in Henry County has not enacted specific ordinances governing STR operations as of 2023. Kentucky state law generally permits STRs unless local municipalities impose restrictions, and Smithfield has not implemented zoning restrictions, registration requirements, or operational limitations that would prohibit STR activities. Property owners can typically operate STRs in residential areas without specific permits, though they must still comply with general property maintenance codes, fire safety requirements, and collect applicable state and local taxes including Kentucky's 6% sales tax and any local occupancy taxes. The city has not designated any prohibited areas for STRs, and there have been no recent legal changes specifically targeting short-term rental operations, leaving the market relatively open compared to larger Kentucky cities like Louisville or Lexington that have implemented comprehensive STR regulations.

The best areas for Airbnb investment in Smithfield, Kentucky include the historic downtown district near Main Street, which attracts visitors interested in the town's 19th-century architecture and proximity to local antique shops and restaurants. The residential neighborhoods along Highway 146 offer good potential due to their accessibility and proximity to both Louisville (about 30 miles northeast) and the Ohio River recreation areas, making them attractive for business travelers commuting to Louisville and tourists exploring the river valley. Properties near Smithfield Lake and the surrounding rural areas appeal to visitors seeking outdoor recreation including fishing, boating, and hiking, particularly during spring and summer months. The areas close to Interstate 71 provide strategic locations for travelers passing through between Louisville and destinations further south, while neighborhoods near local event venues and the Henry County Fairgrounds can capitalize on seasonal events and agricultural tourism that draws visitors to this rural Kentucky community.

Airbnb properties in Smithfield, Kentucky are subject to Kentucky's state transient room tax of 1% on gross rental receipts, which applies to all short-term rental accommodations under 30 days. Jefferson County (where Smithfield is located) imposes an additional local occupancy tax of approximately 6% on transient accommodations, bringing the total occupancy tax burden to around 7%. These taxes are typically collected by Airbnb directly from guests at the time of booking through their automated tax collection system, which began in Kentucky around 2018, and the platform remits payments quarterly to the Kentucky Department of Revenue and local tax authorities. Property owners who collect taxes independently must register with the Kentucky Department of Revenue, obtain a transient room tax account, and file monthly returns by the 20th of the following month, remitting collected taxes electronically through the state's online portal. Exemptions generally include stays of 30 days or longer (considered long-term rentals rather than transient accommodations), rentals to permanent residents, and accommodations provided to certain government employees on official business, though hosts should verify current exemption criteria as regulations can change.

To start an Airbnb in Smithfield, Kentucky, the total estimated costs would be approximately $185,000-$220,000. Property purchase costs around $150,000-$180,000 based on median home prices in rural Kentucky markets. Furnishing a 2-3 bedroom property would require $8,000-$12,000 for essential furniture, bedding, kitchen supplies, and decor from retailers like IKEA, Wayfair, and local stores. Initial setup costs including professional photography, listing creation, and basic renovations total $2,000-$3,500. Permits and fees vary by county but typically include business license ($50-$100), short-term rental permit if required ($200-$500), and potential zoning compliance costs ($300-$800). Insurance including landlord and short-term rental coverage runs $1,200-$2,000 annually. Utility deposits and connections for electricity, water, internet, and cable cost $500-$800. First six months operating costs including utilities ($150/month), cleaning supplies ($100/month), maintenance reserves ($200/month), platform fees (3% of bookings), and marketing budget total approximately $3,000-$4,500, assuming moderate occupancy rates during the initial period.

Airbnb properties in Smithfield, Kentucky show moderate profitability potential with average daily rates ranging from $75-120 depending on property size and amenities, generating monthly revenues of $1,800-3,200 for well-managed properties with 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 ($150-250/month), insurance ($100-200/month), and maintenance costs ($200-400/month). Profit margins generally range from 15-25% after all expenses, with successful properties near Louisville Metro area or those offering unique rural experiences performing better. Properties within 30 minutes of Louisville International Airport or featuring farm stays, fishing access, or historic charm command premium rates and achieve higher occupancy. A typical 3-bedroom home generating $2,400 monthly revenue faces approximately $1,200 in operating expenses, yielding $1,200 monthly profit or 20% margin. Success factors include professional photography, responsive communication, competitive pricing strategies, and leveraging Smithfield's proximity to Louisville attractions while highlighting rural Kentucky charm. Properties that differentiate themselves through amenities like hot tubs, fire pits, or pet-friendly policies typically outperform basic listings by 20-30% in both occupancy and rates.

Airbnb investments in Smithfield, Kentucky can expect annual ROI percentages between 8-12% based on the rural market dynamics and proximity to Louisville metro area attractions. Cash-on-cash returns typically range from 6-10% annually, with properties averaging $75-120 per night during peak seasons and 45-60% occupancy rates throughout the year. The timeframe to profitability is generally 18-24 months, considering initial setup costs of $8,000-15,000 for furnishing and marketing, with break-even occurring faster for properties under $150,000 purchase price. Market data from 2023-2024 indicates that single-family homes and small cabins perform best, generating $1,200-2,400 monthly gross revenue during high-demand periods, while winter months see 30-40% revenue decreases, making the investment suitable for patient investors seeking steady returns rather than rapid appreciation in this emerging short-term rental market.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Smithfield, Kentucky. Local real estate agents specializing in investment properties include Coldwell Banker Legacy Group and RE/MAX Properties East, both serving the Louisville metro area which encompasses Smithfield. National services like Awning, RedAwning, and Vacasa offer end-to-end Airbnb investment solutions including property identification, purchase assistance, and management services in the Kentucky market. AirDNA and Mashvisor provide market analytics and investment property search tools specifically for short-term rental investors targeting the Smithfield area. Local investment-focused brokerages such as Keller Williams Realty Louisville East and Berkshire Hathaway HomeServices Parks & Weisberg have agents experienced in vacation rental property acquisitions. BiggerPockets connects investors with local Kentucky real estate professionals, while companies like Roofstock and Arrived Homes occasionally feature Kentucky Airbnb investment opportunities. Property management companies such as AvantStay and RedAwning also assist investors in identifying profitable properties in smaller Kentucky markets like Smithfield, typically established around 2015-2020 as the short-term rental investment sector expanded beyond major metropolitan areas.