New Albany has no dedicated short-term rental ordinance at all. Jeffersonville just finished its first full registration cycle. And a new Indiana state law that took effect July 1, 2026 now bans any Kentuckiana city from capping how many short-term rentals can exist — permanently, statewide. That combination of light local regulation and a hard legal ceiling on future crackdowns doesn't exist on the Louisville side of the river, and almost nobody is writing about it from a real estate agent's chair.
This guide breaks down exactly what New Albany and Jeffersonville actually require today, what Indiana's new statewide rental-cap ban changes going forward, why the Louisville border is the single biggest thing driving demand here, and what the real numbers look like on both sides of this market.
What Southern Indiana Actually Requires
Floyd and Clark County don't share a single ordinance — each city sets its own rules, and they're currently at very different points in the process.
Jeffersonville: registered and enforced
Jeffersonville's City Council passed a short-term rental registration ordinance on November 6, 2024, codified as Article 8.11 of the city's Unified Development Ordinance. Every STR in the city needed to register by March 6, 2025. The registration fee is a one-time $150, with free annual re-registration after that — no recurring cost beyond the initial signup. Properties in the Downtown and Adjacent Neighborhood overlay district face one extra step: a new short-term rental there needs a Special Exception from the Board of Zoning Appeals, though STRs that were already legally operating in that overlay before the ordinance passed keep legal non-conforming status and don't need to reapply.
New Albany: no ordinance, operating under general zoning
As of this writing, New Albany has not adopted a dedicated short-term rental ordinance. STRs here currently operate under the city's general zoning code rather than a purpose-built registration or permit system. That's a real, honest opportunity window — but it's also exactly the kind of gap that can close with a single council vote, so treat "no ordinance yet" as a current fact to verify before closing, not a permanent feature of this market.
The new statewide rule that changes the ceiling everywhere
Indiana's House Enrolled Act 1210 took effect July 1, 2026, and it fundamentally caps what any Indiana city can do to restrict short-term rentals going forward. Cities keep the right to enforce safety standards, inspections, registration requirements, and occupancy limits — but they can no longer cap the total number of rental properties (short-term or long-term) in a given area, and any local STR permit fee is now capped at $150. Jeffersonville's existing $150 fee already complies. The practical effect for a Southern Indiana investor: even if New Albany eventually adopts its own ordinance, or Jeffersonville tightens its rules further, neither city can legally impose the kind of density cap or escalating fee structure that Lexington or Louisville Metro have used across the river. Separately, HEA 1210 also changed HOA governance statewide — going forward, only homeowners who occupy their unit as a primary residence (plus developers) can vote on rental restrictions or serve on an HOA board, which matters for an investor buying into an HOA community as a non-resident owner.
Why the Louisville Border Matters
This is the one dynamic that doesn't exist in any of Winner Realty's other short-term rental markets: a guest staying in New Albany or Jeffersonville can walk the Big Four Bridge into Louisville's Waterfront Park in minutes, reaching Whiskey Row, the Louisville Slugger Museum, and every downtown Derby-week and festival crowd Louisville draws — while the owner gets Indiana's lighter regulatory touch, no Kentucky Transient Room Tax or Occupational License Tax stack, and a meaningfully lower purchase price than an equivalent property in NuLu or the Highlands. Falls of the Ohio State Park and Jeffersonville's own Arts District and Historic District add local draws that don't depend on Louisville traffic spilling over at all. An investor priced out of Louisville's own STR-heavy neighborhoods should look here before looking further out.
Where the Returns Actually Are
The two cities perform differently enough that they're worth underwriting separately rather than as one blended "Southern Indiana" market.
Jeffersonville
Roughly 187 active listings averaging a $252 nightly rate at about 40% occupancy, for an average annual revenue near $30,000 per listing. Demand concentrates in Downtown Jeffersonville, the Historic District, the area around Falls of the Ohio State Park, and the Arts District. Peak months (April, May, October) run about $4,209 in average monthly revenue at 44.6% occupancy and a $290 ADR; the slow months (January, February, December) still hold up reasonably well at around $2,560/month and 39.8% occupancy — a shallower seasonal swing than most of Winner Realty's other Kentucky markets.
New Albany
About 142 active listings at a $226 average nightly rate and 36.8% occupancy, translating to roughly $23,660 in average annual revenue — lower than Jeffersonville on every metric, which tracks with a lower average purchase price for comparable properties. Demand centers on Downtown New Albany, the Ohio Riverfront, and the New Albany Historic District, with Sellersburg, East Spring Street, and the nearby Charlestown and Corydon historic areas rounding out the market. Seasonality is more pronounced here: peak months (May, September, October) average $3,654/month at 43.3% occupancy, while the slow stretch (January, February, July) drops to roughly $2,086/month and 32.9% occupancy.
The Tax Angle Most Investors Miss
A short-term rental with an average guest stay of 7 days or less is generally treated by the IRS as a trade or business rather than a passive rental activity — a materially lower bar than the 750-hour Real Estate Professional Status test most investors have heard of. That opens the door to cost segregation: an engineering study that reclassifies a meaningful share of a furnished STR's value (commonly 20–35%) into categories that depreciate far faster than the building itself, paired with 100% bonus depreciation, which is back and permanent for property acquired after January 19, 2025.
This isn't tax advice, and every situation is different — talk to your CPA about whether cost segregation makes sense for a specific property before you buy. Our free STR cash flow calculator includes an illustrative cost-segregation estimate alongside the standard cash-on-cash and cap rate numbers, so you can see roughly what the numbers could look like on a property you're considering.
How to Actually Buy Here
The biggest way an out-of-town investor gets this market wrong is treating "New Albany has no STR ordinance" as a permanent green light rather than a snapshot in time, or assuming Indiana's lighter regulatory touch means no diligence is needed at all. Confirm current zoning and any HOA rental restrictions before you write an offer — HEA 1210 caps what a city or an HOA board of non-resident-friendly composition can do, but it doesn't erase deed restrictions or existing covenants. Financing adds another layer: many conventional lenders underwrite short-term rental income differently than long-term rental income, and getting that structured correctly from the start avoids a nasty surprise at underwriting.
Winner Realty works with investors buying short-term rentals specifically across Louisville, Southern Indiana, Lexington, the Bourbon Trail, and Indianapolis — not as a side note to a general residential practice, and licensed in both Kentucky and Indiana. If you're evaluating a property in New Albany or Jeffersonville, schedule a time to talk through it before you write an offer.
Frequently asked questions
Do I need a permit to run an Airbnb in Jeffersonville, Indiana?
Yes. Every short-term rental in Jeffersonville must register with the city under an ordinance passed November 2024, for a one-time $150 fee with free annual re-registration. Properties in the Downtown and Adjacent Neighborhood overlay may need an additional Special Exception from the Board of Zoning Appeals if they weren't already operating before the ordinance passed.
Is it legal to run an Airbnb in New Albany, Indiana?
As of this writing, New Albany has no dedicated short-term rental ordinance, so STRs operate under the city's general zoning code. This is a real opportunity relative to more regulated markets, but it's also a status that could change with future council action, so verify current rules before closing on a specific property.
What does Indiana's new rental law (HEA 1210) actually change?
Effective July 1, 2026, Indiana cities can no longer cap the total number of short-term or long-term rental properties in an area, and any local STR permit fee is capped at $150. Cities can still enforce safety, inspection, registration, and occupancy rules. The law also limits HOA rental-restriction votes and board seats to owners who occupy their unit as a primary residence, plus developers.
Which is the better investment, New Albany or Jeffersonville?
Jeffersonville currently posts higher numbers across the board — roughly $252 ADR and $30,000 in average annual revenue versus New Albany's $226 ADR and $23,660 — but New Albany's lower average purchase price and lighter current regulation may offer a better cash-on-cash return depending on the specific property. Both benefit from proximity to downtown Louisville via the Big Four Bridge.
Why would I buy in Southern Indiana instead of Louisville itself?
Southern Indiana properties give guests walkable or short-drive access to downtown Louisville's attractions while owners avoid Kentucky's Transient Room Tax and Occupational License Tax stack, generally pay less per property than comparable Louisville neighborhoods, and now operate under a state law that caps future local restrictions more tightly than anything currently on the books in Louisville Metro.
How do I get started?
Reach out to Winner Realty and we'll walk through New Albany's or Jeffersonville's current rules for a specific property, run real numbers on both sides of the river, and help you structure financing around STR-specific underwriting. Schedule a time here.