Is Terre Haute, Indiana Good for Airbnb Investment?

To start an Airbnb in Terre Haute, Indiana, begin by researching local regulations through the Terre Haute City Hall and Vigo County offices, as the city requires short-term rental operators to obtain a business license and comply with zoning ordinances that typically allow rentals in residential areas with proper permits. Contact the Terre Haute Building Commissioner's office to secure necessary permits including a Certificate of Occupancy for short-term rentals, fire safety inspection, and ensure compliance with the city's rental property standards which require smoke detectors, carbon monoxide detectors, and basic safety features. Find a suitable property by focusing on areas near Indiana State University, downtown Terre Haute, or near major employers like Union Hospital, considering properties that meet the city's minimum square footage requirements and parking availability. Furnish the space with essential amenities including Wi-Fi, basic kitchen appliances, linens, and furniture while ensuring compliance with Terre Haute's property maintenance codes and accessibility requirements where applicable. List your property on Airbnb and other platforms, setting competitive rates based on local market analysis (typically $60-120 per night in Terre Haute as of 2023), and ensure your listing highlights proximity to Indiana State University and local attractions. Manage your property by establishing cleaning protocols, guest communication systems, and maintaining compliance with Terre Haute's noise ordinances and occupancy limits, while collecting and remitting the required 7% Indiana state sales tax and any applicable local taxes to the Indiana Department of Revenue.

To identify profitable short-term rental properties in Terre Haute, Indiana, focus on locations near Indiana State University campus, downtown historic district, and proximity to major employers like Union Hospital and Rose-Hulman Institute of Technology, as these areas generate consistent demand from students, business travelers, and visitors. Target 2-4 bedroom properties built after 1980 with modern amenities, parking, and outdoor spaces, as Terre Haute's affordable housing market (median home prices around $80,000-$120,000 as of 2023) allows for strong cash-on-cash returns when properties can command $75-$150 nightly rates. Conduct pricing analysis using AirDNA and Mashvisor to evaluate occupancy rates of 40-60% typical for secondary markets, while researching competition through Airbnb and VRBO searches revealing limited inventory of approximately 50-80 active listings citywide. Utilize local resources including the Vigo County Assessor's office for property records, Terre Haute Chamber of Commerce for economic development insights, and MLS data from local realtors like F.C. Tucker or Carpenter Realtors to identify undervalued properties in neighborhoods like Farrington's Grove or areas near Deming Park that offer good rental potential with lower acquisition costs.

To obtain an Airbnb/STR permit in Terre Haute, Indiana, you must first contact the Terre Haute City Planning Department at City Hall located at 17 Harding Avenue to determine current zoning compliance and obtain a business license application, as the city requires short-term rentals to be registered as businesses. Submit a completed business license application along with proof of property ownership or lease agreement, liability insurance documentation showing minimum $1 million coverage, floor plans of the rental property, and a $50-75 business license fee to the City Clerk's office. Additionally, contact the Vigo County Health Department for a lodging establishment permit, which requires a property inspection, submission of cleaning protocols, emergency contact information, and payment of approximately $100-150 in health department fees. The Terre Haute Fire Department may also require a fire safety inspection for properties accommodating more than 6 guests, with inspection fees typically ranging $75-100. You must also register with the Indiana Department of Revenue for state tax collection purposes and obtain any necessary state business permits. The entire process typically takes 4-6 weeks from initial application to final approval, assuming all inspections pass and documentation is complete. Properties must comply with residential zoning requirements, maintain adequate parking for guests, and follow noise ordinances, with some neighborhoods potentially having additional homeowner association restrictions that must be verified before beginning operations.

Short-term rentals (STRs) are generally legal in Terre Haute, Indiana, as the city has not enacted specific prohibitions against vacation rentals or short-term accommodations. However, operators must comply with standard zoning regulations, business licensing requirements, and health department standards that apply to all rental properties in the city. Properties used as STRs in residential zones may face restrictions under existing zoning ordinances that limit commercial activities in residential areas, and operators typically need to obtain proper business licenses and ensure compliance with fire safety codes and occupancy limits. The city has not implemented recent comprehensive STR-specific legislation like some larger Indiana cities, but property owners should verify current zoning compliance and may need special use permits depending on the property's location and zoning classification. As of 2023-2024, Terre Haute has taken a relatively permissive approach compared to cities like Indianapolis or Bloomington, which have enacted more restrictive STR regulations, though this could change as the market evolves and community concerns arise.

The best areas for Airbnb investment in Terre Haute, Indiana include the downtown district near Indiana State University, which attracts consistent demand from visiting families, prospective students, and university events throughout the academic year. The Wabashiki Fish & Wildlife Area vicinity offers opportunities for nature tourism and fishing enthusiasts, particularly during peak outdoor seasons. The historic Fairbanks Park neighborhood provides charm for leisure travelers exploring local attractions like the Terre Haute Children's Museum and Swope Art Museum. Areas near the Terre Haute Regional Airport capture business travelers and those attending events at the Hulman Center or ISU sporting events. The Deming Park area benefits from its proximity to recreational facilities and the annual events at the Vigo County Fair. Properties near the casino district attract gaming tourists and entertainment seekers. The residential areas around Rose-Hulman Institute of Technology generate demand from visiting academics, prospective students, and families attending graduation ceremonies, making these neighborhoods particularly attractive for short-term rental investments due to their consistent year-round occupancy potential.

Airbnb properties in Terre Haute, Indiana are subject to Indiana's state innkeeper's tax of 5% on gross rental receipts, which applies to all short-term rental accommodations under 30 days. Additionally, properties may be subject to Vigo County's local innkeeper's tax of approximately 3%, bringing the total lodging tax to around 8%. These taxes are typically collected by Airbnb directly from guests at the time of booking through their automated tax collection system, which began operating in Indiana around 2018. Airbnb remits these collected taxes directly to the Indiana Department of Revenue and applicable local authorities on behalf of hosts on a monthly basis. However, hosts are still required to register with the Indiana Department of Revenue and may need to file returns even when Airbnb collects the taxes, and they should verify their local registration requirements with Vigo County. Properties rented for 30 days or longer are generally exempt from these innkeeper's taxes, and certain nonprofit or charitable accommodations may qualify for exemptions, though standard residential Airbnb rentals typically do not qualify for exemptions from these occupancy taxes.

Starting an Airbnb in Terre Haute, Indiana requires approximately $180,000-220,000 in total initial investment. Property purchase costs average $85,000-110,000 based on median home prices in the area as of 2023-2024. Furnishing a 2-3 bedroom property typically runs $12,000-18,000 including beds, linens, kitchen essentials, living room furniture, and décor from retailers like IKEA, Wayfair, and local furniture stores. Initial setup costs including professional photography, listing creation, welcome materials, and basic renovations total $3,000-5,000. Permits and fees vary but expect $500-1,200 for business licenses, short-term rental permits, and city registration requirements. Insurance premiums for short-term rental coverage through companies like Proper Insurance or CBIZ run $1,800-2,400 annually, with $900-1,200 needed upfront for six months. Utility deposits and six months of electricity, gas, water, internet, and cable services cost approximately $2,400-3,600. First six months operating expenses including cleaning services, supplies, maintenance, property management software subscriptions, and marketing total $4,800-7,200, assuming 50-60% occupancy rates typical for new Airbnb properties in secondary markets like Terre Haute.

Airbnb properties in Terre Haute, Indiana typically generate annual revenues between $15,000-$35,000 for entire homes and $8,000-$18,000 for private rooms, with average daily rates ranging from $65-$120 depending on property size and location proximity to Indiana State University and downtown attractions. 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-$1,500 annually), and maintenance costs ($2,000-$4,000 yearly). Properties near the university campus and historic downtown area achieve higher occupancy rates of 60-75% compared to suburban locations at 45-60%, with successful hosts reporting net profit margins of 15-25% after all expenses. Key success factors include strategic pricing during ISU events and graduation weekends when rates can increase 200-300%, maintaining 4.8+ star ratings through consistent cleanliness and communication, and targeting the mix of university visitors, business travelers to local employers like Union Hospital and Pfizer, and tourists visiting the Candles Holocaust Museum. Properties requiring significant upfront renovations typically need 2-3 years to achieve positive ROI, while turnkey properties in desirable neighborhoods can become profitable within 8-12 months of operation.

Airbnb investments in Terre Haute, Indiana typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, primarily driven by the city's proximity to Indiana State University and Rose-Hulman Institute of Technology which create consistent demand from visiting families, prospective students, and business travelers. Properties near the university district or downtown area generally achieve occupancy rates of 60-75% annually with average daily rates of $75-$110, while initial investment costs remain relatively low with median property prices around $80,000-$120,000 for suitable rental properties. Most investors reach profitability within 18-24 months after accounting for renovation costs, furnishing, and initial marketing expenses, with properties typically requiring $15,000-$25,000 in upfront improvements to meet Airbnb standards. The market benefits from limited hotel inventory and growing tourism related to the Wabash River, local festivals, and university events, though seasonal fluctuations occur during summer months when student-related demand decreases, making diversified marketing to leisure travelers essential for maintaining consistent returns.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Terre Haute, Indiana. Local real estate agents like those at F.C. Tucker Emge REALTORS and Century 21 Elite have experience with investment properties in the Terre Haute market and can help identify properties suitable for Airbnb conversions. National services include Mashvisor, which provides Airbnb analytics and property search tools, BiggerPockets for connecting with local investors and agents, and Awning which offers short-term rental investment analysis. RedAwning and Vacasa provide property management services for Airbnb investors in the area. Local property management companies like Terre Haute Property Management and Indiana Property Solutions can assist with day-to-day operations. AirDNA offers market data and analytics specific to Terre Haute's short-term rental performance, while Roofstock and Fundrise provide online platforms for real estate investment opportunities. Local mortgage brokers and lenders familiar with investment properties in Vigo County can facilitate financing for Airbnb purchases in the Terre Haute market.