Exploring Profitable Airbnb Investments in Kentucky

Exploring potential Airbnb investment opportunities in Kentucky? You're in the right place. This comprehensive overview will guide you through some of the most profitable markets in the state, from hidden gems like Bardstown to bustling locales like Louisville. We'll dive into key metrics such as return on investment (ROI), average daily rate (ADR), and occupancy rates, as well as unique characteristics that make each market attractive to Airbnb investors.

​​Awning presents the ultimate solution for uncovering the premier Airbnb markets throughout the United States: the Top Airbnb Market tool. Updated monthly, this comprehensive tool delivers rankings and direct links to each market's Airbnb data, ensuring you have the resources to make well-informed decisions.

Here are the top Kentucky markets for Airbnb investors, each boasting unique advantages:

1. Bardstown, KY - Best for Historic Charm and Bourbon Tourism
2. Louisville, KY - Best for Large Market and Diverse Attractions
3. Oak Grove, KY - Best for Catering to a Military Niche
4. Covington, KY - Best for Proximity to Cincinnati and Local Attractions
5. Cadiz, KY - Best for Serene Lakeside Retreats and Outdoor Adventures
6. Frankfort, KY - Best for Capital City Vibes and Historic Landmarks
7. Lexington, KY - Best for Equestrian Culture and Horse Farm Experiences
8. Burnside, KY - Best for Vacation Rentals near Lake Cumberland

1. Bardstown, KY

Bardstown, KY is an exceptional choice for investors interested in the Airbnb rental market. With its historic charm and proximity to popular tourist attractions like the Kentucky Bourbon Trail and Mammoth Cave National Park, the city attracts a significant number of visitors each year.

Bardstown boasts an impressive ROI of 16%, promising lucrative returns for investors. With a projected revenue of $34,000, this market showcases its potential to deliver significant earnings, making it an enticing destination for short-term rental investments.

The average Airbnb price in Bardstown stands at an inviting $230,000, offering investors an affordable entry point without compromising on the market's appeal.

Bardstown's small market size, with 47 Airbnb listings, provides a sense of exclusivity and limited competition. This factor can be advantageous for investors, as it reduces saturation and offers potential for higher occupancy rates and rental rates.

The city's historic charm and association with bourbon tourism create a unique draw for visitors. Bardstown is often referred to as the "Bourbon Capital of the World," with several renowned bourbon distilleries located in the surrounding area. This association, along with the city's rich history, contributes to its appeal as a tourist destination.

Proximity to popular attractions like the Kentucky Bourbon Trail and Mammoth Cave National Park further enhances Bardstown's attractiveness to travelers. These attractions offer unique experiences and draw visitors from near and far, increasing the demand for short-term accommodations in the area.

To maximize the investment potential in Bardstown's Airbnb market, investors should consider properties located in or near the historic downtown area and close to bourbon distilleries. Providing comfortable and well-equipped accommodations that highlight the city's charm and bourbon heritage can help attract guests and generate positive reviews.

With a remarkable ROI, an affordable average price, and a small yet vibrant market size, Bardstown offers a wealth of opportunities for success. By showcasing the town's historic charm, bourbon tourism, and proximity to popular attractions, you can position your Airbnb property for exceptional returns and provide guests with an unforgettable experience in the heart of bourbon country.

2. Louisville, KY

Another top market for Airbnb investors in this state is the city of Louisville. As the largest city in Kentucky, Louisville offers a diverse range of attractions and events that draw in tourists year-round. The city is home to the Kentucky Derby, the Muhammad Ali Center, and the Louisville Slugger Museum & Factory, among other popular destinations, which draw in millions of visitors each year. Additionally, Louisville has a strong job market and a low cost of living, making it an attractive destination for both tourists and residents.

With an impressive ROI of 8%, investors can expect to capitalize on the robust demand for Airbnb accommodations in Louisville. The estimated annual revenue of $21,000 showcases the potential for consistent and substantial returns in this dynamic market.

The ADR of $127 indicates guests' willingness to invest in quality accommodations in Louisville. Its occupancy rate of 64% reflects the strong demand for short-term accommodations in the city. By strategically pricing your rental, capitalizing on local events and attractions, and providing exceptional guest experiences, you can maximize occupancy and maintain a steady flow of bookings throughout the year.

Louisville boasts a large market size with 1,234 Airbnbs, indicating a thriving ecosystem with ample opportunities for success. This market size underscores the strong demand for accommodations, positioning investors for favorable occupancy rates and sustained rental income. The city's growing economy and affordable real estate prices (averaging at $294k) contribute to the attractiveness of the market, creating a favorable climate for investors to establish a solid presence.

To maximize the investment potential in Louisville's Airbnb market, investors should consider properties located in desirable neighborhoods close to popular attractions, such as downtown Louisville, Churchill Downs, and the Louisville Slugger Museum & Factory.

Highlight the city's status as the home of the world-renowned Kentucky Derby, a globally recognized horse racing event that attracts visitors from all corners of the globe. Emphasize the significance of this iconic event and position Louisville's Airbnb properties as ideal accommodations for race enthusiasts and visitors seeking an unforgettable experience.

Additionally, showcase the city's rich cultural heritage, diverse culinary scene, and vibrant arts and entertainment offerings. Louisville is home to numerous museums, galleries, and performing arts venues that appeal to a broad range of interests. Highlight the city's festivals, concerts, and year-round events, demonstrating the constant flow of visitors seeking unique experiences and accommodations.

Leverage the city's central location in the region, positioning Louisville as a gateway to exploring nearby attractions such as the renowned Bourbon Country, where bourbon enthusiasts can embark on the famous Kentucky Bourbon Trail and discover the art of distilling. Highlight the city's proximity to beautiful natural landscapes, such as the Red River Gorge or the Ohio River, offering opportunities for outdoor adventures and scenic experiences.

The Louisville market is ideal for investors who are looking for a stable and diverse market with a large potential customer base. The city's strong economy and growing population make it an attractive destination for both short-term and long-term rentals. Additionally, investors who are interested in the tourism industry would benefit from Louisville's many attractions and events, which draw in visitors from all over the world.

3. Oak Grove, KY

Oak Grove, KY stands out as a highly recommended choice for investors seeking opportunities in the short-term rental market. With its advantageous proximity to Fort Campbell, a major military installation, the city experiences a consistent demand for lodging from military personnel and their families, making it an attractive investment destination.

With an estimated ROI of 11%, Oak Grove presents a promising investment opportunity. The projected annual revenue of $21k, when compared to the average Airbnb price of $171k, demonstrates the market's potential for generating a solid income stream.

The ADR of $101 reflects the competitive pricing landscape in Oak Grove. With an impressive occupancy rate of 65%, Oak Grove demonstrates the consistent demand for short-term accommodations in the area. Tailor your pricing strategy to cater to the needs and budgets of military personnel and their families, offering value for money while maintaining profitability.

Although Oak Grove's market size is categorized as small, with 48 Airbnb listings, the focused demand from military personnel and their families provides a targeted customer base. This niche market allows investors to tailor their properties and services specifically to the needs and preferences of military travelers, enhancing their competitive advantage.

To attract military guests and maximize the investment potential, investors should consider factors such as proximity to Fort Campbell, convenience, and amenities that cater to military lifestyles. Providing comfortable and well-equipped accommodations that address the unique requirements of military personnel can help establish a positive reputation and generate positive reviews, leading to higher occupancy rates and increased revenue.

To effectively market your property in Oak Grove, establish connections with military organizations, relocation services, and local businesses catering to the military community. Consider also the potential for long-term partnerships with military support organizations or local agencies that can assist in connecting investors with military guests.

Furthermore, showcase Oak Grove's other attractions and amenities that appeal to a broader audience beyond the military community. Highlight local points of interest, such as parks, recreational facilities, and nearby natural attractions. Oak Grove's strategic location also offers convenient access to larger cities and regional attractions, enhancing its appeal to a diverse range of travelers.

With a remarkable ROI, an affordable average price, and a strong demand from military personnel and their families, Oak Grove offers a strategic entry point for investors. By catering to the specific needs of military travelers, providing exceptional service, and establishing strong partnerships within the military community, you can unlock the potential for success and generate substantial revenue in the dynamic Oak Grove Airbnb market.

4. Covington, KY

Situated just across the Ohio River from Cincinnati, Covington offers easy access to the city's attractions and events, making it an ideal destination for travelers. Additionally, Covington boasts popular local attractions like the Newport Aquarium and MainStrasse Village, which draw in visitors year-round, driving the demand for Airbnb accommodations.

With an ROI of 11% and a projected revenue of $16,000, Covington showcases its potential to deliver impressive returns on investment. The ADR of $116 reflects the competitive pricing landscape in Covington, while the occupancy rate of 64% demonstrates the consistent demand for short-term accommodations in the area.

The average Airbnb price of $148,000 in Covington makes it an appealing choice for investors, as it offers an affordable entry point into the market while still providing a favorable return on investment. With 341 Airbnbs currently available, investors can benefit from healthy competition and favorable occupancy rates, ensuring a steady stream of rental income.

When investing in Covington, consider properties that are in close proximity to popular attractions, amenities, and transportation hubs. Look for properties within walking distance or a short drive of attractions like the Newport Aquarium or MainStrasse Village. Convenience and accessibility are key factors that can attract more guests and drive higher rental rates.

Consider investing in a property with unique features like a rooftop terrace, private garden, or historic architectural elements. Focus on enhancing the historical charm of the property while incorporating modern amenities and comforts. For example, restore original hardwood floors, expose brick walls, or preserve unique architectural details. These distinctive attributes can make your property stand out among others and attract guests seeking a memorable stay.

To maximize occupancy rates, target specific guest segments such as tourists visiting the area for events, business travelers seeking convenient access to Cincinnati, or families looking for a comfortable and affordable base for exploring the region. Tailor your marketing efforts to highlight the unique features and amenities of your Covington Airbnb, whether it's a cozy apartment, a historic home, or a stylish townhouse.

You can also identify your ideal target audience based on the attractions and events in Covington. For example, market your property as a convenient and comfortable accommodation option for visitors attending music festivals like Maifest or Oktoberfest in MainStrasse Village.

Investors who are interested in Covington, KY should be prepared to cater to a diverse range of travelers, including families, couples, and business travelers. With a variety of local attractions and events, Covington offers something for everyone. With its growing demand for short-term rentals and solid financial performance, Covington is an excellent choice for investors looking to enter the Airbnb market.

5. Cadiz, KY

Cadiz is another prime option in the Kentucky Airbnb market, offering investors a golden opportunity to capitalize on its stunning natural surroundings and outdoor recreational offerings. Nestled near the picturesque Lake Barkley and the expansive Land Between the Lakes National Recreation Area, Cadiz is a haven for outdoor enthusiasts and nature lovers alike.

With a projected ROI of 12%, Cadiz showcases its potential for impressive returns on investment. Investors can anticipate a revenue of $28,000, making Cadiz an enticing market for short-term rental endeavors. The average Airbnb price of $249,000 in Cadiz presents an accessible entry point for investors looking to enter the market. Cadiz boasts a small but dynamic market size, with 112 active Airbnbs. This creates a competitive landscape that encourages investors to curate unique experiences and set their properties apart.

The occupancy rate of 51% signals room for growth and optimization. By understanding the seasonal demand patterns and strategically marketing during peak periods, investors can maximize their rental income. Whether it's the summer months when visitors flock to the area for water sports and outdoor activities or the quieter shoulder seasons that appeal to those seeking tranquility, savvy investors can leverage these trends to their advantage.

Averaging at $203, the average daily rate showcases the value guests place on the unique experiences offered in Cadiz. To optimize revenue, it's crucial to strike a balance between competitive pricing and the distinctive features, amenities, and location of your property. Highlighting the proximity to Lake Barkley, Land Between the Lakes, and other local attractions can be a compelling selling point for potential guests.

When deciding which property to get, look for properties with lake views, waterfront access, or private docks, as these features can significantly increase the desirability and rental potential of your property. Consider investing in larger properties that can accommodate families or groups, as these types of travelers often seek vacation rentals for their extended stays.

Highlight the proximity of your property to Lake Barkley and Land Between the Lakes National Recreation Area in your property listing. Emphasize the outdoor activities available, such as boating, fishing, hiking, and wildlife watching. Consider offering amenities that enhance the outdoor experience, such as kayaks, bicycles, or fishing gear, to attract guests looking for an adventurous getaway.

Tailor your marketing efforts to different target segments. For example, attract fishing enthusiasts by highlighting nearby fishing hotspots and providing information about local fishing regulations and licenses. Market to families by emphasizing family-friendly activities in the area, such as swimming, hiking trails suitable for all ages, and nearby attractions like the Trigg County Ham Festival.

Cadiz, KY offers a unique and promising investment opportunity in the Airbnb market. With its idyllic natural surroundings, proximity to outdoor attractions, and growing demand for authentic experiences, Cadiz captures the hearts of travelers seeking memorable getaways.

6. Frankfort, KY

Frankfort, KY stands as a captivating destination for Airbnb investors seeking to tap into its rich history, bourbon heritage, and strategic location. With its array of historic attractions, proximity to renowned bourbon distilleries, and easy access to nearby tourist hotspots like Lexington and Louisville, Frankfort offers a wealth of opportunities to capitalize on the strong Airbnb demand in the area.

Investing in Airbnb properties in Frankfort can potentially yield an ROI of 9%. With an estimated annual revenue of $16,000, the market demonstrates the potential for consistent rental income. Additionally, the average Airbnb price of $166,000 in Frankfort presents an accessible entry point for investors looking to establish their presence in the market. Frankfort's small market size, with 113 active Airbnbs, provides an opportunity for investors to curate distinctive offerings and stand out from the competition.

At an average daily rate (ADR) of $95, Frankfort offers a competitive pricing landscape that balances affordability with the distinctive features and amenities of each property. Investors can position their Airbnb listings to emphasize the unique aspects of their offerings, such as proximity to historic landmarks, access to bourbon trails, or picturesque views of the Kentucky River. By showcasing these attributes, investors can capture the attention of travelers seeking a memorable and immersive stay in Frankfort.

The city has a decent occupancy rate of 68%, indicating a healthy demand for Airbnb accommodations. This presents an opportunity for investors to optimize their rental income by strategically managing their pricing and leveraging high-demand periods, such as special events or peak travel seasons. By understanding the ebb and flow of the local tourism industry, investors can maximize their occupancy rates and revenue potential.

Promote the city's rich historical heritage, encouraging guests to explore iconic landmarks such as the Kentucky State Capitol, the Old State Capitol, and the Governor's Mansion. Emphasize the unique cultural experiences that await visitors, including guided tours, museum visits, and opportunities to immerse themselves in the storied past of the region. Provide historical information and anecdotes about the area in your guest welcome materials to enhance the guest experience and immerse them in the local culture.

Frankfort's proximity to the renowned bourbon distilleries of Kentucky adds to its allure as a tourist destination. Showcase the city's connection to the world of bourbon, offering guests the chance to embark on distillery tours, whiskey tastings, and immersive experiences that highlight the craftsmanship and tradition behind this beloved spirit.

You can also position Frankfort as a convenient base for exploring the surrounding region, including nearby cities like Lexington and Louisville. Highlight the proximity to major attractions and events in these cities, such as horse racing at Keeneland or the Derby in Louisville. Emphasize the advantages of staying in Frankfort, such as its quieter ambiance, lower accommodation costs, and easy access to the urban excitement of larger cities.

To maximize occupancy rates, consider tailoring your marketing efforts to specific guest segments. Target history enthusiasts, bourbon aficionados, and travelers seeking a unique cultural experience. Highlight the distinctive features and amenities of your Frankfort properties, such as historic charm, comfortable furnishings, and proximity to local attractions.

Leverage online platforms, social media channels, and travel websites to showcase the allure of your Frankfort rentals. Create engaging content that captures the essence of the city, its historical significance, bourbon culture, and the warm hospitality it offers. Utilize high-quality visuals, including captivating photographs and virtual tours, to showcase the unique features of your properties and entice potential guests.

Frankfort, KY offers a promising Airbnb market for investors due to its historic attractions, bourbon distilleries, and proximity to popular tourist destinations. By highlighting the city's rich heritage, unique experiences, and convenient location, you can position your Frankfort properties as desirable accommodations for a diverse range of travelers. With a solid ROI, attractive revenue potential, and a manageable market size, Frankfort presents an excellent opportunity for savvy investors in the Airbnb rental industry.

7. Lexington, KY

Renowned for its thriving horse industry, rich cultural heritage, and a multitude of annual events that draw tourists year-round, Lexington offers a range of opportunities to generate substantial returns on investment.

With a projected ROI of 7%, investors can expect a solid financial performance from their Airbnb properties in Lexington. The city's strong tourism industry and diverse array of attractions contribute to a steady demand for short-term accommodations, providing a favorable environment for investors to maximize their revenue potential.

The projected annual revenue of $19,000 shows the profitability of investing in the Lexington market. Whether it's during the world-famous Kentucky Derby, the Keeneland horse racing season, or other major equestrian events, the city experiences an influx of visitors seeking accommodations that offer convenient access to the horse parks, equestrian centers, and other attractions that make Lexington a unique destination.

The average Airbnb price in Lexington is $272,000, reflecting a dynamic real estate market that accommodates various investment levels. Investors have the opportunity to cater to different traveler preferences, ranging from stylish downtown apartments to charming countryside retreats. The city's architectural charm, picturesque landscapes, and proximity to horse farms make for an enticing selection of Airbnb properties.

As a large market, Lexington offers a significant number of Airbnbs, with 1,327 active listings. While competition exists, there is also ample opportunity for investors to differentiate their properties and target specific guest segments. Factors such as location, amenities, and unique features can help investors stand out and attract guests seeking a memorable and authentic Lexington experience.

With an ADR of $120, investors can strike a balance between affordability and value. By pricing their listings competitively and highlighting the distinct offerings of their properties, investors can capture the attention of travelers seeking a memorable stay in the "Horse Capital of the World." Proximity to the Keeneland Race Course, the Kentucky Horse Park, and other equestrian attractions can be key selling points to attract horse enthusiasts and visitors looking to immerse themselves in Lexington's equestrian culture. Consider offering equestrian-themed amenities or experiences, such as horseback riding lessons or guided tours of local horse farms, to appeal to horse enthusiasts and provide a unique experience for your guests.

A healthy occupancy rate of 63% demonstrates the consistent demand for short-term rentals in Lexington. Effective management of occupancy rates can optimize rental income, especially during peak tourism seasons and major events. Lexington hosts a variety of annual events that draw in tourists from around the world, such as the Kentucky Derby Festival, Rolex Kentucky Three-Day Event, and the Keeneland racing season. Align your marketing efforts with these events and emphasize the convenience of your property for attending them.

To succeed in the competitive Lexington market, investors should prioritize exceptional guest experiences. Providing well-maintained properties, personalized amenities, and local recommendations can enhance guest satisfaction and foster positive reviews. Establishing connections with local tourism organizations, equestrian associations, and event organizers can also help increase exposure and attract a steady stream of guests.

Lexington, KY offers a sound investment opportunity in the Airbnb market. With its thriving horse industry, diverse annual events, and a large pool of potential guests, the city provides a fertile ground for investors seeking profitable short-term rental ventures. Additionally, the city has a supportive regulatory environment for Airbnb hosts, making it an attractive option for investors looking for a low-risk investment opportunity.

8. Burnside, KY

One of the top markets for Airbnb investors in Kentucky is Burnside. This small city is located near Lake Cumberland, a popular vacation spot for boating and fishing enthusiasts.

Investors in Burnside can expect an ROI of 8%, making it an attractive opportunity. With an estimated annual revenue of $22,000, the market demonstrates the capacity for consistent rental income. The average Airbnb price stands at $242,000, reflecting the demand for well-appointed accommodations that cater to the preferences of vacationers.

Burnside's market size is classified as small, with 112 active Airbnbs. This indicates a manageable and competitive market where investors can capitalize on the growing demand for vacation rentals. By offering unique features, such as private boat docks, lakeside patios, or panoramic lake views, investors can differentiate their properties and attract guests seeking an exceptional vacation experience.

With an average daily rate of $165 and occupancy rate of 44%, investors have the opportunity to optimize their rental income by strategically managing bookings and targeting peak seasons and holidays when demand is highest. Effective marketing strategies, such as offering special packages or collaborating with local activity providers, can help increase occupancy rates and maximize revenue potential.

Lake Cumberland experiences seasonal peaks in demand, particularly during the summer months when tourists flock to the area. Adjust your pricing strategy to reflect this seasonality and capitalize on the high-demand periods. During the off-peak seasons, consider targeting a different demographic, such as nature lovers, hikers, or individuals seeking a quiet retreat away from the crowds. Highlight the beauty of the area during these seasons and any nearby fall foliage viewing spots or winter activities.

Burnside offers attractions beyond the lake. Highlight nearby points of interest such as Burnside Island State Park, General Burnside Island Golf Course, or the Kentucky Splash Waterpark to appeal to families, golf enthusiasts, and those looking for additional entertainment options.

To succeed in the Burnside market, investors should prioritize guest satisfaction and aim to provide exceptional experiences. Provide comfortable outdoor seating, a BBQ grill, and other amenities that encourage guests to spend time outdoors and enjoy the fresh air. Consider providing information on local rental services for outdoor equipment like bikes, paddleboards, or fishing gear, allowing your guests to easily access these recreational activities.

Establishing partnerships with local boat rental companies, fishing guides, or outdoor adventure providers can further enhance the guest experience and differentiate the property from competitors.

Bottom Line

Kentucky offers a rich tapestry of Airbnb investment opportunities, each with unique draws and potential profit margins. From the charm of small towns like Bardstown and Cadiz to the tourist-driven demand of Louisville, the state caters to diverse investor preferences. Ensuring a deep understanding of each market, from ROI and ADR to the nuances of local attractions and demand drivers, will be key to maximizing your success in the short-term rental market in Kentucky.