Is Washington, Indiana Good for Airbnb Investment?

To start an Airbnb in Washington, Indiana, begin by researching local zoning laws and regulations through the Daviess County Planning Commission and Washington City Hall, as short-term rentals may require special permits or fall under specific zoning classifications. Contact the Indiana Department of Revenue to obtain a retail merchant certificate for collecting state sales tax (7%) and local innkeeper's tax, then register with the city for any required business licenses or permits, which typically cost $25-100 annually. Find a suitable property by analyzing the local market demand, focusing on areas near attractions like the Washington City Park or downtown business district, ensuring the property meets safety codes including smoke detectors, carbon monoxide detectors, and proper egress windows. Furnish the space with essential amenities including comfortable bedding, basic kitchen supplies, WiFi, and local guidebooks, budgeting approximately $3,000-8,000 for initial furnishing depending on property size. Create your Airbnb listing with professional photos, competitive pricing based on local market rates (typically $60-120 per night in Washington, Indiana), and detailed descriptions highlighting nearby attractions and amenities. Implement a management system using Airbnb's platform or third-party software for booking coordination, guest communication, cleaning schedules, and maintenance, while establishing relationships with local cleaning services and handymen for ongoing property upkeep, and consider obtaining short-term rental insurance to protect against potential damages or liability issues.

For identifying profitable short-term rental properties in Washington, Indiana, focus on locations within 2-3 miles of major attractions like the Daviess County Fairgrounds, downtown historic district, and proximity to US-50 for accessibility to larger markets like Vincennes and Bedford. Target 2-4 bedroom single-family homes or historic properties built between 1900-1980 with original character features, full kitchens, dedicated parking, and outdoor spaces, as these appeal to families visiting for events and business travelers. Conduct pricing analysis using AirDNA and Mashvisor to identify properties where potential STR revenue of $80-120 per night can generate 12-18% annual returns, comparing against local long-term rental rates of $600-900 monthly. Research competition by analyzing existing Airbnb and VRBO listings within a 5-mile radius, noting that Washington typically has 15-25 active STRs with occupancy rates around 60-70% during peak seasons (spring through fall). Utilize tools like BiggerPockets for market analysis, STR Helper for revenue projections, and connect with local real estate agents familiar with Daviess County investment properties, while monitoring the Washington Chamber of Commerce calendar for recurring events that drive demand, such as the annual Corn Festival and county fair activities that can significantly boost occupancy rates.

To obtain an Airbnb/STR permit in Washington, Indiana, contact the Washington City Hall at 102 E South Street or call (812) 254-5761 to inquire about short-term rental regulations, as the city may require a business license and zoning compliance verification. You'll likely need to submit a completed business license application, proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental unit, and pay an estimated application fee of $50-100. The process typically takes 2-4 weeks for approval once all documents are submitted. Washington may require compliance with residential zoning laws, fire safety inspections, maximum occupancy limits based on square footage, adequate parking provisions, and adherence to noise ordinances. Additionally, you may need to register with the Indiana Department of Revenue for state tax purposes and collect applicable local and state taxes on rental income. Contact the Daviess County Health Department for any required health permits and ensure your property meets all building codes and safety requirements before beginning operations.

Short-term rentals (STRs) are legal in both Washington and Indiana, but with varying local regulations. In Washington state, STRs are permitted under state law, but cities and counties have significant authority to impose their own restrictions - Seattle requires STR operators to obtain licenses and limits rentals to primary residences with a maximum of two units per property, while many coastal communities have implemented caps on STR permits due to housing concerns. Prohibited areas in Washington often include certain residential zones in cities like Spokane and Bellingham, and some jurisdictions require minimum night stays or restrict the total number of rental days per year. Indiana generally allows STRs statewide with minimal state-level restrictions, though cities like Indianapolis and Bloomington have enacted their own licensing requirements and zoning limitations. Recent legal changes in Washington include stricter enforcement mechanisms implemented around 2021-2022, with some cities increasing penalties for unlicensed operators and expanding inspection authority, while several counties have introduced or tightened permit caps to address affordable housing shortages.

The best Airbnb investment areas in Washington, Indiana include the downtown historic district near the courthouse square, which attracts visitors for local events, antique shopping, and business travelers visiting the county seat. The neighborhoods surrounding Vincennes University's satellite campus and the areas near major employers like Crane Naval Surface Warfare Center (approximately 30 miles away) offer potential for extended-stay business travelers and visiting families. Properties near the Daviess County Fairgrounds benefit from seasonal events and the annual county fair, while homes close to the White River and local parks appeal to outdoor enthusiasts and fishing tourists. The residential areas along East National Highway (US-50) provide convenient access for travelers passing through or visiting nearby Vincennes attractions, and properties near the Washington Catholic High School and local sports complexes can capitalize on visiting teams and families during athletic events and tournaments.

In Washington, Indiana, Airbnb hosts are subject to Indiana's state sales tax of 7% on lodging rentals, which applies to stays of less than 30 days, and this tax is typically collected by Airbnb directly from guests and remitted to the Indiana Department of Revenue on behalf of hosts through their automated tax collection system that began around 2018. Additionally, hosts may be subject to local innkeeper's taxes that vary by municipality, with Washington potentially imposing a local lodging tax of 1-3% depending on local ordinances, though small-scale operators renting their primary residence for fewer than 14 days per year may qualify for certain exemptions under federal tax rules. Hosts who collect taxes independently must register with the Indiana Department of Revenue, file monthly or quarterly returns depending on their volume, and remit taxes by the 20th of the month following the reporting period, while maintaining detailed records of all rental transactions, guest information, and tax collections for audit purposes.

Starting an Airbnb in Washington, Indiana requires approximately $180,000-220,000 in total initial investment. Property purchase costs around $120,000-140,000 based on median home prices in the area as of 2023-2024. Furnishing a 2-3 bedroom property typically runs $15,000-25,000 including beds, linens, kitchen essentials, living room furniture, and décor. Initial setup costs including professional photography, listing creation, welcome materials, and basic renovations total $3,000-5,000. Permits and fees in Daviess County include business license ($50-100), short-term rental permit if required ($200-500), and potential zoning compliance costs ($500-1,000). Insurance for short-term rentals costs $2,000-3,500 annually, significantly higher than standard homeowner's insurance. Utility setup and deposits for electricity, gas, water, internet, and cable run $500-800 initially, with monthly costs of $200-350. First six months of operating expenses including utilities ($1,200-2,100), cleaning services ($1,800-3,000), maintenance reserves ($1,000-2,000), marketing ($500-1,000), and property management software ($300-600) total approximately $4,800-8,700. Additional considerations include potential HOA fees, property taxes, and emergency repair funds that could add $2,000-5,000 to initial costs.

Airbnb properties in Washington, Indiana show moderate profitability potential with average daily rates ranging from $75-120 depending on property type and location within the small city of approximately 12,000 residents. Properties typically achieve 40-60% occupancy rates annually, generating gross revenues of $15,000-35,000 per year for well-positioned homes near downtown or Daviess County attractions. Operating expenses including cleaning fees ($25-40 per turnover), utilities ($150-250 monthly), insurance ($1,200-2,000 annually), property management (15-25% of revenue), and maintenance costs typically consume 45-65% of gross revenue. Net profit margins generally range from 15-35% before taxes and mortgage payments, with successful properties often featuring amenities like hot tubs, game rooms, or proximity to local events at the Daviess County Fairgrounds. Properties within walking distance of Washington's historic downtown square or near outdoor recreation areas like Glendale Fish & Wildlife Area tend to command premium rates and higher occupancy. The market benefits from limited hotel inventory in the area, creating opportunities for short-term rentals, though seasonal fluctuations occur with lower winter occupancy rates of 25-40% compared to summer peaks of 65-80%.

Airbnb investments in Washington, Indiana typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% depending on property type and location within the market. Properties in downtown Washington near the courthouse square and historic district tend to perform better, achieving the higher end of these ranges, while suburban properties may see returns closer to 6-8%. Initial profitability usually occurs within 12-18 months for well-positioned properties, with full investment recovery typically taking 8-10 years. The market benefits from steady demand from business travelers visiting local manufacturing facilities like Daviess Community Hospital and tourism related to the historic courthouse and nearby Crane Naval Base, though seasonal fluctuations occur with lower occupancy during winter months reducing annual returns by 15-20% compared to peak summer performance.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties across markets including Washington, Indiana. Local real estate agents specializing in Airbnb investments in the area include Keller Williams Realty agents who focus on investment properties, RE/MAX professionals with vacation rental expertise, and Century 21 agents experienced in short-term rental markets. National services include Mashvisor (property analytics platform), AirDNA (market data and analytics), Awning (full-service Airbnb investment platform), Roofstock (online real estate investment marketplace), and BiggerPockets (investor networking and education platform). Additional local services may include Washington County investment property specialists, regional property management companies like Vacasa and RedAwning that also help with property acquisition, and local real estate investment groups. Companies like Rabbu, Rove Travel, and local mortgage brokers specializing in investment properties also serve the Washington, Indiana market for Airbnb property investments.