Is Union City, Tennessee Good for Airbnb Investment?

To start an Airbnb in Union City, Tennessee, begin by researching local regulations through the Union City Planning Department and Obion County offices, as Tennessee generally allows short-term rentals but municipalities may have specific requirements including business licenses, occupancy permits, and zoning compliance. Contact Union City City Hall at 731-885-1341 to verify current STR ordinances and obtain necessary permits, which typically include a business license ($25-50 annually) and potentially a conditional use permit if required by zoning. Find a suitable property by searching MLS listings through local realtors like Crye-Leike or Century 21, focusing on properties near downtown Union City or close to Reelfoot Lake attractions, with average home prices ranging $80,000-150,000. Furnish the property with essential amenities including quality mattresses, linens, kitchen appliances, WiFi, smart TV, and local guidebooks, budgeting approximately $8,000-15,000 for complete furnishing. List your property on Airbnb, VRBO, and Booking.com with professional photography highlighting Union City's proximity to Reelfoot Lake State Park and Discovery Park of America in nearby Martin, setting competitive rates around $75-125 per night based on local market analysis. Manage the property by establishing cleaning protocols between guests, installing keyless entry systems, maintaining 24/7 guest communication, and considering property management companies like Vacasa or local services if needed, while ensuring compliance with Tennessee's 9.25% sales tax collection requirements for short-term rentals.

To identify profitable short-term rental properties in Union City, Tennessee, focus on locations within 10-15 minutes of Reelfoot Lake State Park and Discovery Park of America, as these attract significant tourist traffic year-round. Target 2-4 bedroom single-family homes or cabins built after 1990 with modern amenities, full kitchens, outdoor spaces, and parking for multiple vehicles, as families and fishing groups comprise the primary visitor demographic. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against the 15-20 existing STR properties, aiming for nightly rates between $80-150 depending on size and amenities, with occupancy rates typically ranging 45-65% annually. Research competition by analyzing properties within a 5-mile radius, noting that most successful rentals emphasize outdoor recreation themes and lake access. Utilize Zillow and Realtor.com for property searches focusing on homes under $200,000, leverage the Obion County property records for ownership history, and connect with local real estate agents familiar with the tourism market, while ensuring compliance with Union City's STR regulations which require business licenses and adherence to residential zoning restrictions.

To obtain an Airbnb/STR permit in Union City, Tennessee, contact the Union City Planning and Zoning Department at City Hall located at 1819 South First Street or call (731) 885-1341 to begin the application process. You will need to submit a completed short-term rental permit application, provide proof of property ownership or lease agreement with landlord consent, submit a site plan or floor plan of the property, provide proof of liability insurance (typically $1 million minimum), pass a fire safety inspection, and obtain a business license from the city clerk's office. Required documents include a valid Tennessee driver's license or state ID, property deed or lease agreement, certificate of occupancy, and contact information for a local property manager if you live more than 50 miles away. The application fee is approximately $100-150 with an annual renewal fee of $75-100, plus inspection fees of around $50-75. The timeline typically takes 30-45 days from application submission to permit approval, depending on inspection scheduling and any required corrections. Union City requires STR properties to maintain off-street parking for each bedroom, limit occupancy to 2 people per bedroom plus 2 additional guests, maintain quiet hours from 10 PM to 8 AM, and display the permit number in all online listings. Properties must also comply with residential zoning requirements and cannot operate in areas zoned exclusively for single-family residential use without a conditional use permit.

Short-term rentals (STRs) are generally legal in Union City, Tennessee, as the city has not enacted specific prohibitions against vacation rentals, though they typically fall under existing residential zoning regulations and business licensing requirements. Property owners must comply with standard business license procedures through the city clerk's office and ensure their rental operations align with residential zoning classifications, which may limit commercial activity in certain neighborhoods. The city requires STR operators to maintain proper insurance, collect applicable occupancy taxes, and adhere to health and safety codes, while some residential areas may have homeowners association restrictions that could limit or prohibit short-term rental activities. Tennessee state law generally supports property rights for short-term rentals, and Union City has not implemented the strict regulatory frameworks seen in larger Tennessee cities like Nashville or Memphis, though operators should verify current zoning compliance and obtain necessary permits before beginning rental operations, as local regulations can evolve and enforcement may vary by neighborhood.

The best areas for Airbnb investment in Union City, Tennessee include the downtown historic district near the town square, which attracts visitors interested in local heritage and is within walking distance of restaurants and shops. The neighborhoods near Discovery Park of America, located just outside the city center, offer excellent potential due to the museum's consistent draw of families and educational tourists year-round. Areas close to the University of Tennessee at Martin campus (about 30 minutes away) can capture overflow demand during university events, graduations, and sports seasons. Properties near Reelfoot Lake State Park, approximately 20 miles northwest, benefit from fishing enthusiasts, hunters, and nature tourists, particularly during peak outdoor seasons from spring through fall. The residential areas along Highway 51 and near the regional medical facilities attract business travelers and medical tourists visiting for healthcare services, while neighborhoods close to the annual Kiwanis Fish Fry event venue and other local festival locations see seasonal spikes in demand during community celebrations and regional gatherings.

Union City, Tennessee imposes a local occupancy tax of 5% on short-term rental accommodations including Airbnb properties, which is collected in addition to Tennessee's state sales tax of 7% and state hotel occupancy tax of 1.5%, bringing the total tax burden to approximately 13.5% for guests. The local occupancy tax is administered by the Union City Finance Department and must be collected by hosts at the time of booking or check-in, with monthly remittance required by the 20th of the following month using forms available from the city clerk's office. Hosts must register with the city to obtain a short-term rental permit and occupancy tax certificate before collecting taxes, with registration fees typically around $50-100 annually. Tennessee requires Airbnb and other platforms to collect and remit state taxes directly since 2019, but local occupancy taxes must still be handled by individual hosts. Exemptions may apply for stays exceeding 30 consecutive days, government employees on official business, and certain nonprofit organization bookings, though documentation is required. Failure to collect and remit occupancy taxes can result in penalties of 10-25% of unpaid amounts plus interest, and the city conducts periodic audits of short-term rental operators to ensure compliance.

Starting an Airbnb in Union City, Tennessee requires approximately $180,000-220,000 in total initial investment. Property purchase costs around $150,000 based on median home prices in the area as of 2023. Furnishing a 2-3 bedroom property typically runs $15,000-25,000 including furniture, appliances, linens, and décor from retailers like IKEA, Wayfair, and local stores. Initial setup costs including professional photography, listing creation, and basic renovations total approximately $3,000-5,000. Permits and fees vary but expect around $500-1,500 for business licenses, short-term rental permits, and inspection fees required by Obion County. Insurance premiums for short-term rental coverage average $2,000-3,000 annually, with companies like Proper Insurance and CBIZ offering specialized Airbnb policies. Utility deposits and connections (electricity, water, internet, cable) cost roughly $500-800 initially. First six months of operating expenses including utilities ($200/month), cleaning services ($75 per turnover), supplies and maintenance ($150/month), platform fees (3% of bookings), and marketing total approximately $4,000-6,000, assuming moderate occupancy rates of 50-60% typical for smaller Tennessee markets.

Airbnb properties in Union City, Tennessee typically generate annual revenues between $15,000-$35,000 for entire homes, 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), property management (10-20% of revenue), utilities ($150-$300 monthly), insurance ($800-$1,500 annually), and maintenance costs averaging $2,000-$4,000 yearly. Net profit margins typically range from 15-35% for well-managed properties, with successful hosts achieving higher margins through strategic pricing, excellent guest experiences, and efficient operations. Properties near Reelfoot Lake or downtown Union City command premium rates, particularly during hunting season and summer months when occupancy rates peak at 70-85%. A typical 3-bedroom home purchased for $120,000-$180,000 can generate $8,000-$18,000 in annual net profit after expenses, representing ROI of 6-12%. Success factors include professional photography, responsive communication, consistent 4.8+ star ratings, competitive pricing strategies, and targeting the area's outdoor recreation market including hunters, fishermen, and tourists visiting nearby attractions like Discovery Park of America in Union City.

Based on Union City, 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 city. Properties near Reelfoot Lake and downtown areas command higher nightly rates of $85-120, while suburban properties average $65-95 per night with occupancy rates of 55-70% annually. Initial investment recovery and profitability generally occurs within 18-24 months for well-positioned properties, with single-family homes showing stronger performance than condos due to limited inventory and proximity to outdoor recreation areas. The market benefits from consistent demand from hunters, fishermen, and visitors to nearby Reelfoot Lake State Park, with peak seasons during fall hunting and spring fishing periods driving occupancy rates up to 85% during these months.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental investment properties across markets including Union City, Tennessee. Local real estate agents in the area such as Realty Executives Associates and Century 21 Cumberland Realty have experience with investment properties and vacation rental markets in the region. National services like Mashvisor, AirDNA, and BiggerPockets provide market analysis and property identification tools for Airbnb investors targeting smaller Tennessee markets. RedAwning and Vacasa offer property management services that can help investors identify suitable properties while providing ongoing management solutions. Local property management companies such as Tennessee Valley Property Management and regional firms like Smoky Mountain Vacation Rentals extend their services to emerging markets in West Tennessee. Investment-focused real estate platforms including Roofstock and Fundrise have expanded their short-term rental property offerings to include secondary markets in Tennessee. Additionally, local real estate investors and wholesalers in the Memphis metropolitan area, which encompasses Union City, often have access to off-market properties suitable for Airbnb conversion.