Is Versailles, Kentucky Good for Airbnb Investment?

To start an Airbnb in Versailles, Kentucky, begin by researching local zoning laws and regulations through the Woodford County Planning and Zoning Commission, as Versailles typically requires short-term rentals to comply with residential zoning restrictions and may require a business license from the city clerk's office. Obtain necessary permits including a business license (approximately $25-50 annually), ensure compliance with Kentucky state tax requirements by registering for sales tax collection, and verify your property meets fire safety codes and building standards. Find a suitable property in residential areas like downtown Versailles near the historic district or neighborhoods close to Keeneland Race Course, considering properties with 2-3 bedrooms that can accommodate 4-6 guests, with purchase prices typically ranging from $150,000-300,000. Furnish the space with quality basics including comfortable beds, linens, kitchen essentials, WiFi, and local touches highlighting Kentucky's horse country heritage, budgeting approximately $8,000-15,000 for complete furnishing. Create your Airbnb listing with professional photos showcasing the property's proximity to horse farms, Woodford Reserve Distillery, and historic downtown, setting competitive rates around $80-150 per night based on local market analysis. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating key exchanges or installing smart locks, maintaining the property regularly, and ensuring compliance with Woodford County's noise ordinances and parking requirements while building positive guest reviews to increase bookings.

To identify profitable short-term rental properties in Versailles, Kentucky, focus on locations within walking distance of the Kentucky Horse Park, Keeneland Race Course, and downtown Versailles historic district, as these areas attract tourists year-round for equestrian events and bourbon trail activities. Target properties with 2-4 bedrooms, historic charm or farmhouse aesthetics, outdoor spaces like porches or patios, and modern amenities including high-speed internet and updated kitchens, as visitors often seek authentic Kentucky experiences while maintaining comfort standards. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against comparable properties in Lexington (15 miles away) and adjust for Versailles' smaller market, typically seeing rates 15-20% lower but with potentially higher occupancy during horse racing seasons at Keeneland (April and October). Research competition by analyzing existing STR listings within a 5-mile radius, noting that Versailles has limited hotel inventory, creating opportunities for well-positioned vacation rentals to capture overflow demand from Lexington events. Utilize tools like Rabbu for local market analysis, STR Helper for revenue projections, and monitor Woodford County tourism data through the Kentucky Department of Tourism, while considering seasonal fluctuations tied to bourbon distillery tours, horse farm visits, and University of Kentucky events that drive demand from nearby Lexington.

To obtain an Airbnb/STR permit in Versailles, Kentucky, contact the Versailles City Hall at 115 South Main Street or call (859) 873-4401 to begin the application process, as the city likely requires a business license and conditional use permit for short-term rentals. Required documents typically include a completed business license application, property deed or lease agreement, floor plan of the rental unit, proof of liability insurance ($1 million minimum coverage), contact information for a local property manager if you're not local, and parking plan documentation. The business license fee is estimated at $50-75 annually, with an additional conditional use permit fee of approximately $200-300, plus potential inspection fees of $100-150. Submit your application to the City Clerk's office and schedule a required safety inspection with the local fire department and building inspector to ensure compliance with fire safety codes, occupancy limits, and building standards. The timeline typically takes 4-6 weeks from application submission to permit approval, including a 2-3 week review period and 1-2 weeks for scheduling and completing inspections. Versailles-specific requirements likely include maintaining a guest registry, providing emergency contact information to neighbors, ensuring adequate off-street parking (minimum 2 spaces), limiting occupancy to 2 people per bedroom plus 2 additional guests, maintaining quiet hours from 10 PM to 8 AM, and displaying the permit number in all online listings and at the property entrance.

Short-term rentals (STRs) in Versailles, Kentucky operate in a regulatory gray area as the city has not established comprehensive STR-specific ordinances as of 2023. While not explicitly prohibited, STRs must comply with existing zoning regulations, business licensing requirements, and health department standards that typically apply to residential properties used for commercial purposes. The city's zoning code generally restricts commercial activities in residential zones, which could limit STR operations in certain neighborhoods, particularly single-family residential areas. Property owners interested in operating STRs should obtain proper business licenses, ensure compliance with fire safety codes, and verify that their specific zoning district permits such use. Recent trends in Kentucky municipalities suggest increasing regulation of STRs, and Versailles may develop more specific guidelines in the coming years as the industry grows. Currently, enforcement appears to be complaint-driven rather than proactive, with the city addressing issues on a case-by-case basis through existing nuisance and zoning violation procedures.

The best areas for Airbnb investment in Versailles, Kentucky include the Historic Downtown District near Main Street, which attracts visitors interested in the town's antebellum architecture and proximity to Woodford Reserve Distillery tours, and the Pisgah Pike/Frankfort Road corridor that benefits from business travelers visiting Toyota Motor Manufacturing and other Lexington-area corporations. The Versailles Road area near Keeneland Race Course (approximately 15 minutes away) sees strong seasonal demand during racing seasons in April and October, while properties near Woodford County High School and the fairgrounds capitalize on sports tournaments and county fair events. The residential areas around Falling Springs and Big Sink Road offer attractive settings for families visiting the Kentucky Horse Park or attending University of Kentucky events, benefiting from lower property costs compared to Lexington while maintaining easy highway access via US-60 and the Bluegrass Parkway for guests exploring the broader Bourbon Trail region.

Airbnb properties in Versailles, Kentucky are subject to Kentucky's 6% state sales tax on transient accommodations, which applies to rentals of less than 30 consecutive days. Additionally, Woodford County imposes a 3% transient room tax on short-term rentals, bringing the total occupancy tax rate to approximately 9%. 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 Kentucky around 2019. Airbnb then remits these taxes quarterly to the Kentucky Department of Revenue and applicable local authorities on behalf of hosts. However, hosts should verify their registration status with local authorities and may need to obtain a transient vendor license from Woodford County. Properties rented for 30 days or longer are generally exempt from these occupancy taxes, and certain agricultural or educational accommodations may qualify for exemptions under specific Kentucky statutes, though standard residential Airbnb rentals typically do not qualify for exemptions.

The total cost to start an Airbnb in Versailles, Kentucky would be approximately $185,000-$220,000. Property purchase costs around $150,000-$180,000 based on median home prices in Woodford County. Furnishing a 2-3 bedroom property would require $8,000-$12,000 for quality furniture, bedding, kitchen essentials, and decor. Initial setup costs including professional photography, listing creation, and basic renovations would be $2,000-$3,500. Permits and fees including business license, short-term rental permit, and inspection fees would total $500-$800. Insurance for short-term rental coverage would cost $1,200-$1,800 annually. Utilities including electricity, water, gas, internet, and cable would run $200-$300 monthly or $1,200-$1,800 for six months. First six months operating costs including cleaning services, supplies, maintenance, marketing, and platform fees would be approximately $3,000-$4,500. Additional working capital for unexpected expenses and vacancy periods should be budgeted at $5,000-$8,000.

Airbnb properties in Versailles, Kentucky typically generate annual revenues between $15,000-$35,000 for entire home listings, with average daily rates ranging from $85-$150 depending on property size and amenities. 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-$1,200 annually), and maintenance costs ($2,000-$4,000 yearly). Properties near Keeneland Race Course and Woodford Reserve Distillery command premium rates during peak seasons, with successful hosts like those operating restored farmhouses reporting 65-75% occupancy rates and net profit margins of 25-35%. The market benefits from Versailles' proximity to Lexington (15 miles) and Louisville (60 miles), attracting bourbon trail tourists, horse racing enthusiasts, and business travelers. Success factors include professional photography, responsive communication, local experience packages, and properties that accommodate 4-6 guests, with the most profitable listings being those that invested $10,000-$20,000 in renovations to achieve modern amenities while maintaining Kentucky charm. Seasonal fluctuations show peak performance during Kentucky Derby season (April-May) and fall bourbon season (September-October), when daily rates can increase 40-60% above baseline pricing.

Airbnb investments in Versailles, Kentucky typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, primarily driven by the area's proximity to Lexington and Kentucky Horse Park which attracts tourists year-round. Properties in Versailles generally reach profitability within 18-24 months, with average daily rates of $85-120 depending on property size and amenities. The market benefits from steady demand from horse industry visitors, bourbon trail tourists, and Keeneland race meet attendees, with occupancy rates averaging 65-75% annually. Initial investment costs are relatively low compared to larger Kentucky markets, with median property prices around $180,000-250,000, allowing investors to achieve positive cash flow typically within the first year of operation when factoring in mortgage payments, maintenance, and platform fees.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Versailles, Kentucky. Local real estate agents specializing in investment properties include Coldwell Banker McMahan Co. and RE/MAX Creative Realty, both established in the Lexington-Versailles area since the 1980s. Keller Williams Bluegrass Realty has agents experienced in vacation rental investments throughout Woodford County. National services include Awning (founded 2018) which offers full-service Airbnb property management and investment guidance, Mashvisor for rental property analytics, and BiggerPockets for investor networking and deal sourcing. RedAwning provides vacation rental market analysis and property management services. Local property management companies like Kentucky Lake Vacation Rentals and Bluegrass Short Term Rentals offer market insights and management services for investors. AirDNA delivers short-term rental market data and performance analytics for the Versailles area, while Rabbu and Rentals.com provide additional market research tools for identifying profitable Airbnb investment opportunities in this historic Kentucky town near Keeneland Race Course.