How to start an Airbnb Business in Mississippi

Mississippi flies under the radar in short-term rental conversations, and that’s exactly why it deserves attention. While operators in Nashville and Austin fight over saturated markets with razor-thin margins, Mississippi’s Gulf Coast generates $30,000+ annual revenue per listing with startup costs that are a fraction of what you’d spend in any major metro. Oxford pulls a $534 ADR during Ole Miss football weekends. Bay St. Louis averages $275/night in a town where you can lease a two-bedroom for $900/month. The competition is thin, the barriers are low, and the demand is real.

This guide covers the regulations, tax structure, market-by-market revenue data, and startup costs for launching rental arbitrage across Mississippi — from the Gulf Coast to the college towns to the historic river cities.

Mississippi’s Emerging STR Market — Low Competition, Real Opportunity

Mississippi’s short-term rental market breaks into three segments that rarely get discussed together but form a complete portfolio strategy.

The Gulf Coast (Ocean Springs, Biloxi, Gulfport, Bay St. Louis) is Mississippi’s primary tourism corridor. Casino traffic in Biloxi, the art scene in Ocean Springs, and beach tourism across Harrison and Hancock counties drive year-round demand. Ocean Springs leads with 246 active listings averaging $29,441 annual revenue at a $210 ADR. Bay St. Louis — a small artist community with 580+ vacation rentals — pulls a $275 ADR with 40% occupancy. These are not Nashville numbers, but the cost of entry is dramatically lower.

College towns (Oxford, Starkville) operate on event-driven demand that creates extreme revenue spikes. Oxford hosts earned $1.1 million collectively during Ole Miss football weekends, and $353,000 during a single graduation weekend. The average listing pulls a $534 ADR during peak events. Between events, occupancy drops to 27% annually — this is a feast-or-famine model that rewards operators who price aggressively during high-demand windows.

Historic tourism markets (Natchez, Vicksburg) cater to a niche but loyal traveler base. Natchez’s collection of antebellum mansions — the largest in America — draws heritage tourists, particularly during the Spring Pilgrimage (March-May). Vicksburg’s Civil War battlefields pull steady National Park Service visitor traffic. These markets won’t make you rich, but they generate reliable supplemental income at extremely low operating costs.

State-Level Regulations and Tax Requirements

Mississippi takes a relatively hands-off approach to short-term rental regulation at the state level. There is no comprehensive statewide STR law — the Mississippi Department of Revenue handles tax collection, and individual municipalities set their own permitting and zoning rules.

State sales tax: 7%. Mississippi levies its standard 7% sales tax on all short-term rental income. This applies to the room rate plus all ancillary charges — cleaning fees, pet fees, extra person fees, cancellation fees, and even valet or laundry services. If you charge for it, the state taxes it. Airbnb and Vrbo collect and remit this tax for hosts when their platform sales exceed $250,000/year in Mississippi (which they do), but hosts who list on direct booking sites or smaller platforms must register with the Department of Revenue and handle remittance themselves.

Local tourism and accommodation taxes: Many Mississippi cities and counties impose additional tourism or economic development taxes on accommodations. These typically range from 1% to 3% and fund local tourism boards. Jackson adds a 1% local sales tax, and Tupelo adds 0.25%. Gulf Coast cities impose their own tourism levies. Always verify your specific city’s rate — undercharging guests means the tax difference comes directly from your profit.

Mississippi’s combined tax burden for STR operators (7% state + 1-3% local) is among the lowest in the Southeast. Compare that to Connecticut’s 15% or Philadelphia’s 15.5%, and you start to see why Mississippi’s margin math works even with lower gross revenue numbers.

Gulf Coast Markets

Ocean Springs

Ocean Springs is Mississippi’s most regulated and most rewarding STR market. The city requires a short-term rental permit that involves Planning Commission and Board of Aldermen approval, including a public hearing. The application fee is $501 — substantial for Mississippi but a one-time barrier that filters out casual operators. The city caps residential STR permits at 115 citywide, creating supply constraints that protect existing operators’ revenue.

The numbers justify the permit hassle. Ocean Springs listings average $29,441 in annual revenue with a $210 ADR and 43-48% occupancy across 246 active listings. The town’s art galleries, restaurants, and proximity to Gulf Islands National Seashore attract a guest base that skews higher-income and stays longer than typical beach tourists. Properties within walking distance of the downtown gallery district command premium rates.

Ocean Springs is also the most clearly regulated Mississippi market, which matters for operators who want legal certainty. The permit system is bureaucratic but transparent — you know exactly what’s required and where you stand.

Biloxi and Gulfport

Biloxi permits short-term rentals only in specific zoning districts and prohibits them outright in single-family residential zones. You need a permit from the planning department, a Certificate of Occupancy, a Certificate of Zoning Compliance, and a Privilege Tax License. The regulatory framework is more restrictive than Ocean Springs in terms of where you can operate, but less restrictive in terms of total permit caps.

Biloxi’s 369 active listings average $15,200 annual revenue with a $176 ADR and 34% occupancy. Those numbers look weak — and for standalone Biloxi properties, they often are. But Biloxi’s casino corridor generates demand spikes that reward operators who understand event-based pricing. Concerts at the Mississippi Coast Coliseum, casino promotions, and Cruisin’ The Coast (the nation’s largest block party and car cruise) create weekends where $300+ nightly rates are standard.

Gulfport is the larger market with 731 active listings pulling $26,744-$35,238 in annual revenue, 36-50% occupancy, and a $241 ADR. Gulfport properties near the beach or the downtown district outperform suburban listings significantly. The Jones Park area and the renovated downtown corridor are the strongest micro-markets.

Bay St. Louis

Bay St. Louis is Mississippi’s sleeper STR market and arguably the best risk-reward play in the state. This small coastal town (population ~13,000) has cultivated a reputation as an artists’ community, with galleries, independent bookstores, studios, and the popular Second Saturday Artwalk drawing visitors from across the Gulf South. The town’s 580+ vacation rental listings average $30,723 in annual revenue with a $275 ADR and 35-40% occupancy.

What makes Bay St. Louis compelling for arbitrage is the cost structure. Residential rents in the $800-$1,200/month range mean your lease-to-revenue spread is wide. A two-bedroom cottage generating $2,500/month in STR revenue on a $950/month lease produces strong cash flow without the capital requirements of Gulf Coast resort markets. The Cruisin’ The Coast car show, Mardi Gras, and Hancock County Fair create seasonal demand spikes that push monthly revenue above $4,000 during peak events.

College Towns and Cultural Markets

Oxford (Ole Miss Football Demand)

Oxford is the most extreme event-driven STR market in Mississippi. The town’s 1,006 active listings revolve around the University of Mississippi calendar — and the revenue concentration is staggering. The average listing pulls a $534 ADR, but occupancy sits at just 27% annually. That’s not a market failure; it’s the mathematical reality of a town where six football Saturdays and graduation weekend generate more revenue than the other 350 days combined.

Top-performing properties (top 10%) earn $7,744+ per month. Median properties generate roughly $2,326/month. The spread between top performers and the median is wider in Oxford than almost any other Mississippi market, which tells you that operator quality matters enormously here. Professional photography, game-day pricing strategy, and proximity to The Square (Oxford’s downtown) are the differentiators.

Oxford doesn’t impose a blanket ban on STRs, but operators must comply with local lodging taxes and monitor city council activity for potential regulation changes. The lack of formal permitting makes entry easy, but it also means the market could tighten with little warning. Stay current on local ordinances.

Peak revenue month: September (football season opener). Lowest: January. If you enter this market, plan your cash flow around those extremes.

Starkville (Mississippi State)

Starkville mirrors Oxford’s event-driven model at a smaller scale. Mississippi State’s 657 active STR listings average $24,179 in annual revenue with a $268 ADR and 35% occupancy. The property mix skews toward two-bedroom (34%) and three-bedroom (28%) units — families and friend groups attending games are the primary guest segment.

Starkville’s peak month is May (graduation and spring events), not September like Oxford. The Bulldog football schedule drives fall demand, but Starkville’s broader university event calendar (baseball, basketball, campus events) spreads revenue more evenly than Oxford. Best-in-class properties (top 10%) generate $5,149+ monthly.

Starkville is a lower-risk college town play than Oxford. The revenue ceiling is lower, but the floor is higher — you won’t see the same feast-or-famine extremes. For operators who want college-town exposure without betting everything on six football Saturdays, Starkville delivers.

Historic Tourism Markets

Natchez

Natchez sits 200 feet above the Mississippi River and holds the most concentrated collection of antebellum mansions in America. The town survived the Civil War without damage (it surrendered immediately to Union forces), preserving dozens of pre-war estates that now drive heritage tourism year-round.

Vacation rentals in Natchez average $71/night for standard properties and $323/night for full houses. The market is small — under 100 active listings — but occupancy spikes dramatically during the Spring Pilgrimage (March-May), when historic homes open for public tours and the town fills with heritage travelers, many of whom are repeat visitors. Fall Pilgrimage provides a secondary peak.

Natchez rewards operators who lean into the historic character. A converted carriage house or a property within walking distance of the bluff generates disproportionate bookings compared to generic suburban listings. The guest demographic is older, higher-income, and values character over modern amenities — which means your furnishing budget goes further if you invest in charm rather than electronics.

Vicksburg

Vicksburg’s Vicksburg National Military Park drew over 700,000 visitors annually pre-COVID, and numbers have recovered strongly. The Civil War battlefield and the city’s riverfront heritage create a niche but steady tourism base. Short-term rental supply is limited (under 75 active listings), which means less competition but also a lower revenue ceiling.

Vicksburg works best as a secondary property in a Mississippi portfolio rather than a standalone investment. Pair it with a Gulf Coast property or an Oxford listing, and the steady Vicksburg income fills gaps in your more seasonal primary markets. Startup costs are among the lowest in the state — rents under $800/month are common for properties near the park and downtown.

Revenue Benchmarks and What to Expect

The key insight from this data: Mississippi’s STR revenue isn’t as high as major metros, but the margin is often better because operating costs are so much lower. A Bay St. Louis property generating $30,000/year on a $950/month lease ($11,400/year) leaves $18,600 in gross margin before cleaning, insurance, and supplies. A Philadelphia property generating $25,000/year on a $2,200/month lease ($26,400/year) is already underwater before you pay a single cleaning bill. Revenue isn’t profit. Margin is profit.

Startup Costs — Why Mississippi Is a Low-Barrier Entry Point

Mississippi is one of the cheapest states in the country to launch a short-term rental business, and that’s not a compromise — it’s a competitive advantage.

Gulf Coast (Ocean Springs, Bay St. Louis, Gulfport): $4,000-$10,000 to launch. Monthly rents range from $800-$1,400 for a two-bedroom. Security deposits are typically one month’s rent. Furnishing a beach-appropriate property runs $2,500-$5,000 — less than urban markets because guests expect casual coastal decor, not designer furniture. Ocean Springs’ $501 permit fee is the biggest single regulatory cost. Short-term rental insurance runs $800-$1,500/year in Mississippi, well below Northeast rates.

College towns (Oxford, Starkville): $3,500-$8,000 to launch. Rents near campus run $900-$1,500/month depending on size and proximity. Furnishing for the game-day crowd means durable, functional pieces — think sectional couches, big TVs, and parking for tailgaters, not boutique aesthetics. No formal permit costs in either market currently, though Oxford may change. Budget heavily for dynamic pricing software — the difference between $200/night and $600/night on a football Saturday comes down to pricing intelligence.

Historic markets (Natchez, Vicksburg): $2,500-$6,000 to launch. Rents under $800/month are available for character properties near downtown areas. Furnishing can be done partially through estate sales and antique markets, which actually enhances the guest experience in these heritage tourism markets. No significant permit costs. Insurance is minimal. This is the lowest-cost STR entry point in the continental United States.

Review our full rental arbitrage startup costs guide for detailed budgeting across all cost categories.

Frequently Asked Questions

Do I need a permit to run an Airbnb in Mississippi?

Mississippi has no statewide STR permit requirement. Permitting is handled at the municipal level, and it varies dramatically. Ocean Springs requires a $501 permit with Planning Commission approval and caps total permits at 115. Biloxi requires permits from the planning department plus a Privilege Tax License, and restricts STRs to specific zoning districts. Oxford and Starkville have no formal STR permitting as of 2025, though operators must comply with lodging taxes. Natchez and Vicksburg have minimal formal requirements. Always verify with your city’s planning office before listing.

How much tax do I pay on short-term rental income in Mississippi?

The state sales tax is 7% on all rental income, including cleaning fees and ancillary charges. Local tourism or accommodation taxes add 1-3% depending on your city and county. Airbnb and Vrbo collect and remit the state tax when their Mississippi sales exceed $250,000/year. You must also report all rental income on Mississippi state and federal income tax returns. Register with the Mississippi Department of Revenue if you list on platforms that don’t handle tax remittance.

Is rental arbitrage legal in Mississippi?

Yes. Mississippi has no state-level prohibition on rental arbitrage. The legality depends on your lease agreement (landlord permission to sublet is required), local zoning (Biloxi restricts STRs to non-residential zones), and any municipal permit requirements. Most Mississippi cities outside of Ocean Springs and Biloxi have minimal formal STR regulations, making the state one of the easiest in the Southeast for arbitrage entry. Always get landlord approval in writing before converting a lease into an STR operation.

What is the best Airbnb market in Mississippi?

For consistent year-round revenue, Ocean Springs leads with $29,441 average annual revenue, strong occupancy, and a regulated market that limits competition. For highest ADR potential, Oxford delivers $534/night during Ole Miss events but requires tolerance for low off-season occupancy. For best startup cost ratio, Bay St. Louis offers $30,723 average revenue with rents under $1,200/month — possibly the best margin-to-cost ratio in the Southeast. The 10XBNB program helps operators identify which Mississippi market matches their capital and risk profile.