Minnesota Short-Term Rentals

Minnesota Short-Term Rentals

Minneapolis, MN · Member since 2017 · 35 posts · 18 votes

Anyone have advice on short-term rentals in Minnesota? We are looking to expand into this industry but are somewhat concerned about what to estimate for occupancy, especially in the winter months. We have experience with SFH and College Rentals, but are interested in the short-term rental market as well. We are specifically looking at the North Shore area (Duluth, Two Harbors, etc.), but are open to other areas that make sense. We are also trying to think of other expenses we need to plan for (maintenance, utilities, etc.) and don't want to miss anything. Any input is greatly appreciated.

      Thanks,

           Corey Leet

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Investor · Duluth, MN · Member since 2017 · 52 posts · 83 votes
8y
Hey Cory! I might be able to help. I own one in Duluth and our company manages a few of them in the area. Vacation rentals are pretty lucrative up here in the summer - which is really mid-June through October fall colors. There bleak in the winter, but you can get them rented to cover costs. The big issue is licensing. Duluth has a specific short term rental license. It takes several months to get, and will cost 3-4K to get through it. Most importantly the city of Duluth limits how many are permits are allowed and currently there all taken. They require a commercial fire department inspection, health department inspection, property survey, change in zoning application, and an appearance at the planning Commission and a city council hearing. It takes 4 months with no hiccups just to get the license if there is one available. Lastly, it doesn’t transfer with the property if later you decide to sell - so you can’t “sell” a vacation rental. Most of the surrounding communities up here don’t license these things, but up the north shore it’s starting. Lakewood township which covers the majority of the shore between Duluth city limits and Two Harbors has a short term permit now too. Also further up around Grand Marais, Tofte, Lutsen area there are new regulations, but I’m not as well versed in their specific process / requirements. Hope that helps!
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  • Member since 2018 · 509 posts · 211 votes
    8y

    Las Raiders..... Check it out. 🔢 S are out of this world.

  • Tim SwierczekPro Member
    Lender · White Bear Township, MN · Member since 2016 · 1k+ posts · 1k+ votes
    8y

    @Jordan Moorhead can help you with short term rental info.

  • Investor · Duluth, MN · Member since 2017 · 52 posts · 83 votes
    8y
    Hey Cory! I might be able to help. I own one in Duluth and our company manages a few of them in the area. Vacation rentals are pretty lucrative up here in the summer - which is really mid-June through October fall colors. There bleak in the winter, but you can get them rented to cover costs. The big issue is licensing. Duluth has a specific short term rental license. It takes several months to get, and will cost 3-4K to get through it. Most importantly the city of Duluth limits how many are permits are allowed and currently there all taken. They require a commercial fire department inspection, health department inspection, property survey, change in zoning application, and an appearance at the planning Commission and a city council hearing. It takes 4 months with no hiccups just to get the license if there is one available. Lastly, it doesn’t transfer with the property if later you decide to sell - so you can’t “sell” a vacation rental. Most of the surrounding communities up here don’t license these things, but up the north shore it’s starting. Lakewood township which covers the majority of the shore between Duluth city limits and Two Harbors has a short term permit now too. Also further up around Grand Marais, Tofte, Lutsen area there are new regulations, but I’m not as well versed in their specific process / requirements. Hope that helps!
  • Flipper/Rehabber · Minneapolis, MN · Member since 2016 · 1k+ posts · 1k+ votes
    8y

    I will echo what @Michael Schraepfer said - it is near impossible to get a vacation rental license in Duluth.  There are many people wanting to do the same up there (myself included) so running without correct licensing ins't a good idea.  I didn't know the license was not transferable - thanks for pointing that out Michael.  There is one on Park Point that has a license and is across from the first beach.  That property looks like an ok location but it appears the current owners are doing what most people would want to in that location and are giving up soon after purchase.  Seems that it must not be working as planned.

    I have clients who have STRs in Mpls who do pretty well in the winter but up in that area I imagine you would have a very hard time renting them out.  Unless someone is looking to ski or ice fish it doesn't seem like a very desirable area in the winter.

    @Selena Walsh and @Scott Jackelen are experts in this area owning their own properties and also managing them for others. If you are planning to manage on your own maybe you can pay them a consulting fee to help you get started on the right foot. There is a lot to consider when starting a STR.

  • Rental Property Investor · Minneapolis, MN · Member since 2017 · 19 posts · 12 votes
    8y

    Thanks for the kind words @John Woodrich .  I would be happy to answer any questions that you have about getting started @Corey Robert Leet .

  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    8y
    Corey Robert Leet we did a meetup recently on it. If you want to grab coffee and talk sometime let me know. Also search JM Holdings on Facebook and there’s an hour or so video of the Airbnb meetup on there.
  • Minneapolis, MN · Member since 2017 · 35 posts · 18 votes
    8y

      Thanks everyone for the input.  We did see the house on Park Point and it piqued our interest, but as you stated it seems like the current owners may have failed trying to run an air bnb there.  There are a couple others up closer to two harbors we are interested in as well, as they don't appear to have as many regulations.  That being said, we are concerned about winter income in that area.  Jordan and Scott, I'll probably reach out by PM to connect.  John, any input on what areas you have seen as the best SHR in Minneapolis area?  We are pretty familiar with the town as we live in Coon Rapids.

           Thanks,

               Corey

  • Rental Property Investor · Minneapolis, MN · Member since 2015 · 22 posts · 14 votes
    8y

    These guys have much more expertise, but I can offer one data point. I did Airbnb in one of my Northeast Minneapolis units for January and February last year. It was a three-bedroom unit in a duplex, and at about $90/night + a $30 cleaning fee, it was occupied every weekend plus enough weekdays to reach an overall 65% occupancy, a bit higher than I expected.

    I only did it for two months to bridge a gap between long-term leases, and the Super Bowl made it worthwhile, but I'll be trying another STR scenario again soon.

    Good luck, Corey!

  • Flipper/Rehabber · Minneapolis, MN · Member since 2016 · 1k+ posts · 1k+ votes
    8y

    @Corey Robert Leet 

    Scott knows MPLS well, I can personally attest that they operate in several areas of MPLS as I help them out with tax matters.  Scott is your man.

  • Brooklyn, NY · Member since 2016 · 9 posts · 1 vote
    8y

    Hi folks. Glad I found this thread. Does anyone have experience with STRs in Rochester, MN? Would love to connect with some local folks on the ground (I live and invest in NYC but looking to expand further afield) to talk shop. 

  • Flipper/Rehabber · Minneapolis, MN · Member since 2016 · 1k+ posts · 1k+ votes
    8y
    Originally posted by @Jordan Stein:

    Hi folks. Glad I found this thread. Does anyone have experience with STRs in Rochester, MN? Would love to connect with some local folks on the ground (I live and invest in NYC but looking to expand further afield) to talk shop. 

    Contact @Scott Jackelen and @Selena Walsh - they have a company that can help make this a turn key operation for you.

  • Brooklyn, NY · Member since 2016 · 9 posts · 1 vote
    8y

    @John Woodrich Thanks for the intel! Will do! 

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