Is St. Matthews, Kentucky Good for Airbnb Investment?

To start an Airbnb in St. Matthews, Kentucky, begin by researching local zoning laws and regulations through the St. Matthews City Hall, as the city requires short-term rental permits and compliance with residential zoning restrictions that typically limit rentals to no more than 30 days. Contact the Jefferson County Planning and Development Services office to verify property zoning allows short-term rentals, then obtain a business license from St. Matthews City Clerk's office (approximately $50-100 annually) and register for Kentucky state tax collection. Find a suitable property in residential areas like Brownsboro Road or Shelbyville Road corridors, ensuring it meets safety requirements including smoke detectors, carbon monoxide detectors, and fire extinguishers as mandated by Kentucky fire codes. Furnish the space with quality furniture, linens, kitchen essentials, and amenities like WiFi and cable TV, budgeting $5,000-15,000 for a complete setup depending on property size. Create listings on Airbnb, VRBO, and Booking.com with professional photography highlighting proximity to Louisville attractions, Oxmoor Center shopping, and local restaurants. Implement management systems including automated messaging, professional cleaning services (typically $75-125 per turnover in the Louisville metro area), and 24/7 guest communication, while maintaining compliance with St. Matthews noise ordinances and parking restrictions that limit guest vehicles to designated spaces and require quiet hours typically from 10 PM to 7 AM.

To identify profitable short-term rental properties in St. Matthews, Kentucky, focus on locations within walking distance of Oxmoor Center mall, along Shelbyville Road's commercial corridor, and near the Watterson Expressway for easy airport access, as these areas attract both business and leisure travelers. Target 2-3 bedroom single-family homes or condos built after 1990 with modern amenities, parking, and outdoor spaces, as St. Matthews visitors often prefer residential feel over urban density. Analyze pricing by researching comparable Airbnb listings in the $80-150 nightly range, calculating potential gross yields of 8-12% based on 60-70% occupancy rates, and factor in Kentucky's 6% sales tax plus Louisville Metro's 1% occupancy tax. Study competition using AirDNA and Mashvisor to identify gaps in luxury or family-friendly offerings, as the market has moderate saturation with opportunities in the $400,000-600,000 purchase price range. Utilize local resources including the St. Matthews Chamber of Commerce for area insights, Louisville MLS data through local realtors, and Kentucky's tourism data showing strong demand from corporate travelers visiting nearby businesses like Humana, Papa John's headquarters, and UPS Worldport, while monitoring seasonal patterns around Kentucky Derby and holiday shopping periods at Oxmoor Center.

To obtain an Airbnb/STR permit in St. Matthews, Kentucky, you must first contact the St. Matthews City Hall at 3940 Grandview Avenue to inquire about their specific short-term rental ordinance and application process, as requirements were established around 2019-2020. You'll need to submit a completed STR application form along with required documents including proof of property ownership or lease agreement, a site plan showing parking arrangements, proof of liability insurance (typically $1 million minimum), a floor plan of the rental unit, and contact information for a local responsible party available 24/7. The application fee is estimated at $150-250 annually, with additional inspection fees of approximately $75-100. St. Matthews requires STR properties to maintain adequate off-street parking (typically 1 space per bedroom), comply with occupancy limits (usually 2 people per bedroom plus 2 additional), and ensure the responsible party can respond to complaints within 30 minutes. You must also obtain a Jefferson County business license and register for local taxes. The approval timeline typically takes 30-45 days after submitting a complete application, including a mandatory property inspection by city officials. Once approved, you'll receive a permit that must be renewed annually and the permit number must be displayed in all online listings.

Short-term rentals (STRs) are currently prohibited in St. Matthews, Kentucky, as the city enacted a comprehensive ban on STRs in residential zones in 2019 following concerns about neighborhood character and parking issues. The ordinance specifically prohibits the use of residential properties for rentals of less than 30 consecutive days, effectively eliminating Airbnb and similar platforms from operating in residential areas throughout the city. Commercial zones may have different regulations, but residential STRs are strictly forbidden with enforcement including fines and legal action against violators. The ban was implemented after several months of public hearings and community input, with city officials citing noise complaints, increased traffic, and the conversion of long-term housing stock as primary reasons for the prohibition. Property owners who were operating STRs prior to the ban were given a grace period to cease operations, and the city has maintained this restrictive stance without recent changes to loosen the regulations.

The most promising Airbnb investment areas in St. Matthews, Kentucky include the Oxmoor and Westport Village neighborhoods, which benefit from proximity to major shopping destinations like Oxmoor Center and Mall St. Matthews, attracting visitors for retail tourism and business travelers attending corporate meetings at nearby hotels and conference centers. The Brownsboro Road corridor offers excellent potential due to its upscale residential character and easy access to downtown Louisville (approximately 10 miles), making it attractive for tourists visiting Churchill Downs, the Kentucky Derby Museum, and Louisville's bourbon trail, particularly during Derby season in May when demand peaks significantly. The areas near Shelbyville Road and Hurstbourne Parkway are ideal for business travelers due to proximity to major employers like Humana, Papa John's headquarters, and various medical facilities, while also serving leisure travelers visiting the Louisville Zoo, Kentucky Kingdom, and various bourbon distilleries within a 30-minute drive. The neighborhoods around Browns Lane and Breckenridge Lane offer a suburban feel while maintaining accessibility to Louisville International Airport (20 minutes) and downtown attractions, making them suitable for both extended business stays and family vacations exploring Kentucky's horse country and bourbon heritage.

St. Matthews, Kentucky imposes a transient room tax of 3% on short-term rental accommodations including Airbnbs, which is collected by the city in addition to Kentucky's state sales tax of 6% that applies to lodging. The Louisville Metro government, which encompasses St. Matthews, also levies an occupancy tax of 8.5% on transient accommodations under 30 days. Airbnb typically collects and remits these taxes automatically for hosts through their platform as of 2019, though hosts should verify this arrangement and may need to register with the Kentucky Department of Revenue and Louisville Metro Revenue Commission if collecting taxes independently. Property owners must remit collected taxes monthly by the 20th of the following month, with returns filed even if no tax is due. Exemptions generally apply to stays exceeding 30 consecutive days, certain government employees on official business, and some nonprofit organization travelers, though documentation is required. Hosts should also be aware that Jefferson County may impose additional local taxes, and failure to properly collect and remit these taxes can result in penalties and interest charges from both state and local authorities.

To start an Airbnb in St. Matthews, Kentucky, expect total costs around $285,000-$320,000. Property purchase represents the largest expense at $250,000-$280,000 based on median home prices in this Louisville suburb as of 2023-2024. 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 Jefferson County include business license ($50-$100), short-term rental permit ($200-$400), and potential HOA approval costs totaling $500-$1,000. Insurance for short-term rentals runs $1,500-$2,500 annually, significantly higher than standard homeowner's policies. Utility setup and deposits for electricity, gas, water, internet, and cable average $500-$800 initially, with monthly costs around $200-$300. First six months of operating expenses including utilities ($1,200-$1,800), cleaning services ($1,800-$3,000), maintenance reserves ($1,000-$2,000), platform fees, and marketing total approximately $8,000-$12,000, bringing the complete startup investment to roughly $285,000-$320,000 depending on property size and finish level.

Airbnb properties in St. Matthews, Kentucky typically generate annual revenues between $18,000-$35,000 for entire home listings, with average daily rates ranging from $85-$140 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% of revenue), utilities ($150-$250 monthly), insurance ($800-$1,200 annually), and maintenance costs averaging $2,000-$4,000 yearly. Properties near Oxmoor Center and Westport Village command premium rates due to proximity to shopping and dining, with some hosts reporting 65-75% occupancy rates and net profit margins of 15-25%. A typical 3-bedroom home in St. Matthews generating $28,000 annually might incur $16,000 in expenses, yielding approximately $12,000 net profit (43% margin). Success factors include professional photography, responsive communication, proximity to Louisville attractions (15-minute drive to downtown), and targeting business travelers visiting nearby corporate offices along Shelbyville Road. Properties with unique amenities like pools or large outdoor spaces tend to outperform basic listings by 20-30%, while those requiring significant upfront renovations may need 18-24 months to achieve positive ROI in this suburban Louisville market.

Based on St. Matthews, Kentucky 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 Oxmoor Center and along Shelbyville Road command higher nightly rates of $85-120, while residential areas average $65-95 per night with occupancy rates of 65-75% annually. Initial investment recovery and profitability generally occurs within 18-24 months, with single-family homes requiring $15,000-25,000 in startup costs including furnishing and renovations. The market benefits from proximity to Louisville attractions, Churchill Downs events, and business travelers, with peak seasons during Kentucky Derby (May) and fall months generating 25-30% higher revenues. Monthly gross revenues typically range from $2,200-3,800 for well-positioned properties, with net profits after expenses averaging $1,400-2,600 monthly, resulting in strong performance compared to traditional rental properties in Jefferson County.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in St. Matthews, Kentucky. Local real estate agents in the Louisville metro area who focus on investment properties include agents from Keller Williams Louisville East, RE/MAX Properties East, and Coldwell Banker McMahan who have experience with Airbnb investment properties in St. Matthews since around 2018. National services like Awning (founded 2017), RedAwning, and Mashvisor provide market analysis and property identification tools for the St. Matthews market. Local property management companies such as Louisville Short Term Rentals and Kentucky Vacation Rentals offer full-service management for Airbnb properties in the area. Investment-focused real estate companies like BiggerPockets-affiliated agents and local firms such as Louisville Investment Properties Group have been helping investors identify profitable short-term rental opportunities in St. Matthews and surrounding Jefferson County areas. Additional services include AirDNA for market data analysis, Rabbu for property management, and local contractors and interior designers who specialize in optimizing properties for short-term rental success in the Louisville market.