Is Andover, Minnesota Good for Airbnb Investment?

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Andover, Minnesota Airbnb Investment Overview

Is Airbnb a Good Investment in Andover, Minnesota?

Investing in Airbnb properties in Andover, Minnesota, presents a niche opportunity that requires a careful analysis of local market dynamics. Andover's market conditions are generally stable, characterized by suburban residential areas rather than a major tourist hub. Tourism trends in Andover are limited compared to larger metropolitan or popular vacation destinations, primarily driven by visits to local family, friends, or specific events, rather than a consistent influx of leisure travelers. Property values in Andover are part of the broader Twin Cities metropolitan area's steady market, showing appreciation but not the rapid growth seen in high-demand urban centers or resort towns. The investment potential for Airbnb in Andover would likely be modest, catering to specific short-term needs such as temporary corporate housing, visits for local school or sporting events, or overflow accommodation for nearby family gatherings. Therefore, while not a high-yield investment like those in major tourist hot spots, an Airbnb in Andover could provide a steady, albeit lower, return with careful management and targeted marketing to local demand.

How Much Does an Average Airbnb Earn in Andover?

Based on available market data and regional analysis, Airbnb hosts in Andover, Minnesota typically earn between $800-$1,500 per month, with properties averaging $85-$120 per night depending on size and amenities. Seasonal variations show peak earnings during summer months (June through August) when revenue can increase by 25-40% due to Minnesota's lake season and outdoor activities, while winter months typically see a 15-20% decrease in bookings. Spring and fall represent moderate earning periods with steady occupancy rates around 60-70%. Key factors affecting earnings include proximity to the Twin Cities metro area (approximately 20 miles), property size with larger homes commanding premium rates, amenities such as hot tubs or lake access, and competition from approximately 50-75 other listings in the immediate area. Properties with professional photography and consistent five-star ratings tend to outperform the average by 20-30%, while those near Bunker Hills Regional Park or with easy highway access to Minneapolis-St. Paul see higher booking rates. Market data suggests annual gross revenues typically range from $12,000-$20,000 for well-managed properties, though expenses including cleaning fees, utilities, and platform commissions should be factored into net earnings calculations.

Airbnb Return on Investment in Andover

Airbnb investments in Andover, Minnesota typically generate ROI between 8-12% annually, with payback periods averaging 7-10 years depending on property acquisition costs and renovation expenses. Properties in Andover's desirable neighborhoods near Bunker Hills Regional Park and close to Minneapolis commuter routes see occupancy rates around 65-75% with average daily rates of $85-120 for entire homes. This performance generally outpaces traditional long-term rentals in the area by 2-4 percentage points, as conventional rentals yield approximately 6-8% ROI with monthly rents averaging $1,400-1,800 for comparable properties. The seasonal nature of Minnesota tourism creates revenue fluctuations, with peak summer months generating 40% higher bookings than winter periods, though proximity to Twin Cities business travelers helps maintain year-round demand. Initial investment recovery typically occurs within 8-9 years when factoring in higher operational costs, cleaning fees, and property management expenses that average 25-30% of gross rental income, compared to 15-20% for traditional rentals.

Average Airbnb Occupancy Rate in Andover

Airbnb occupancy rates in Andover, Minnesota typically average around 55-65% annually, with significant seasonal variation driven by the area's proximity to Minneapolis and outdoor recreation opportunities. Peak occupancy occurs during summer months (June through August) when rates climb to 70-80%, coinciding with lake activities, festivals, and favorable weather conditions, while winter months see occupancy drop to 40-50% despite some winter sports tourism. Spring and fall maintain moderate occupancy levels around 55-60% as visitors enjoy mild weather and fall foliage. Andover's occupancy rates generally align closely with Minnesota's statewide average of approximately 60%, though they tend to run 5-10 percentage points below national Airbnb averages of 65-70% due to the seasonal nature of Minnesota tourism and competition from established hotel markets in the Twin Cities metropolitan area. The city benefits from its suburban location offering guests a quieter alternative to downtown Minneapolis while maintaining reasonable access to urban attractions, though this positioning also means it faces more competition from traditional accommodations and experiences more pronounced seasonal swings than year-round destination markets.

Best Neighborhoods for Airbnb in Andover

The most promising Airbnb investment neighborhoods in Andover include the Bunker Hills area near the golf course and water park which attracts families and golf enthusiasts year-round with strong pricing power due to recreational amenities, the neighborhoods around Andover Boulevard and Hanson Boulevard offering convenient highway access to Minneapolis while maintaining suburban charm for business travelers, the residential areas near Bunker Lake Boulevard that provide easy access to both Bunker Hills Regional Park and are popular with families visiting the area's numerous lakes and trails, the developments around 135th Avenue which offer newer construction homes appealing to guests seeking modern amenities while being centrally located within the city, the neighborhoods near Round Lake Boulevard that capitalize on proximity to multiple lakes and outdoor recreation while being close to shopping and dining options, and the areas around Andover High School and community facilities that attract visiting families for school events and sports tournaments with consistent demand throughout the academic year, with all these areas benefiting from Andover's growing population of young families and professionals who generate referral business and repeat bookings.

Short-term Rental Regulations in Andover

Andover, Minnesota requires short-term rental operators to obtain a conditional use permit through the city's planning department, with applications requiring detailed property information, floor plans, and neighbor notification procedures. Properties are typically limited to a maximum occupancy of two guests per bedroom plus two additional guests, with total occupancy not exceeding 10 people, and parking must accommodate one vehicle per bedroom plus one additional space. The city generally requires owner-occupancy for short-term rentals, meaning the property must serve as the owner's primary residence, though some exceptions may apply for properties in specific zoning districts. Short-term rentals are primarily permitted in residential zoning districts but face restrictions in certain neighborhoods, particularly those with homeowner association covenants that prohibit such activities. The registration process involves submitting a conditional use permit application with fees typically ranging from $300-500, providing proof of insurance, completing a safety inspection, and obtaining necessary state and local tax registrations. Recent regulatory changes have included stricter enforcement of noise ordinances, enhanced parking requirements, mandatory annual renewals of permits, and increased penalties for violations, with the city implementing a complaint-driven monitoring system and requiring operators to provide 24-hour contact information for addressing neighbor concerns.

Short-term Rental Fees and Taxes in Andover

Short-term rentals in Andover, Minnesota are subject to several fees and taxes including the state lodging tax of 3% on gross receipts, plus local lodging taxes that typically range from 2-4% depending on the specific jurisdiction within Anoka County where Andover is located. Property owners must obtain a rental license which costs approximately $150-300 annually, and may need to register with the Minnesota Department of Revenue for tax collection purposes with registration fees around $50. Additional costs include potential homeowner association fees if applicable, business license fees of roughly $100-200 per year, and compliance with local zoning requirements which may involve inspection fees of $75-150. Tourism promotion taxes may apply at rates of 1-2% in some areas, and owners are responsible for collecting and remitting all applicable state and local sales taxes. Fire safety inspections may be required annually at costs of $100-200, and some properties may need special use permits costing $200-500 depending on zoning classifications.

Is Airbnb a Good Investment in Andover, Minnesota?

Investing in Airbnb properties in Andover, Minnesota, presents a niche opportunity that requires a careful analysis of local market dynamics. Andover's market conditions are generally stable, characterized by suburban residential areas rather than a major tourist hub. Tourism trends in Andover are limited compared to larger metropolitan or popular vacation destinations, primarily driven by visits to local family, friends, or specific events, rather than a consistent influx of leisure travelers. Property values in Andover are part of the broader Twin Cities metropolitan area's steady market, showing appreciation but not the rapid growth seen in high-demand urban centers or resort towns. The investment potential for Airbnb in Andover would likely be modest, catering to specific short-term needs such as temporary corporate housing, visits for local school or sporting events, or overflow accommodation for nearby family gatherings. Therefore, while not a high-yield investment like those in major tourist hot spots, an Airbnb in Andover could provide a steady, albeit lower, return with careful management and targeted marketing to local demand.

How Much Does an Average Airbnb Earn in Andover?

Based on available market data and regional analysis, Airbnb hosts in Andover, Minnesota typically earn between $800-$1,500 per month, with properties averaging $85-$120 per night depending on size and amenities. Seasonal variations show peak earnings during summer months (June through August) when revenue can increase by 25-40% due to Minnesota's lake season and outdoor activities, while winter months typically see a 15-20% decrease in bookings. Spring and fall represent moderate earning periods with steady occupancy rates around 60-70%. Key factors affecting earnings include proximity to the Twin Cities metro area (approximately 20 miles), property size with larger homes commanding premium rates, amenities such as hot tubs or lake access, and competition from approximately 50-75 other listings in the immediate area. Properties with professional photography and consistent five-star ratings tend to outperform the average by 20-30%, while those near Bunker Hills Regional Park or with easy highway access to Minneapolis-St. Paul see higher booking rates. Market data suggests annual gross revenues typically range from $12,000-$20,000 for well-managed properties, though expenses including cleaning fees, utilities, and platform commissions should be factored into net earnings calculations.

Airbnb Return on Investment in Andover

Airbnb investments in Andover, Minnesota typically generate ROI between 8-12% annually, with payback periods averaging 7-10 years depending on property acquisition costs and renovation expenses. Properties in Andover's desirable neighborhoods near Bunker Hills Regional Park and close to Minneapolis commuter routes see occupancy rates around 65-75% with average daily rates of $85-120 for entire homes. This performance generally outpaces traditional long-term rentals in the area by 2-4 percentage points, as conventional rentals yield approximately 6-8% ROI with monthly rents averaging $1,400-1,800 for comparable properties. The seasonal nature of Minnesota tourism creates revenue fluctuations, with peak summer months generating 40% higher bookings than winter periods, though proximity to Twin Cities business travelers helps maintain year-round demand. Initial investment recovery typically occurs within 8-9 years when factoring in higher operational costs, cleaning fees, and property management expenses that average 25-30% of gross rental income, compared to 15-20% for traditional rentals.

Average Airbnb Occupancy Rate in Andover

Airbnb occupancy rates in Andover, Minnesota typically average around 55-65% annually, with significant seasonal variation driven by the area's proximity to Minneapolis and outdoor recreation opportunities. Peak occupancy occurs during summer months (June through August) when rates climb to 70-80%, coinciding with lake activities, festivals, and favorable weather conditions, while winter months see occupancy drop to 40-50% despite some winter sports tourism. Spring and fall maintain moderate occupancy levels around 55-60% as visitors enjoy mild weather and fall foliage. Andover's occupancy rates generally align closely with Minnesota's statewide average of approximately 60%, though they tend to run 5-10 percentage points below national Airbnb averages of 65-70% due to the seasonal nature of Minnesota tourism and competition from established hotel markets in the Twin Cities metropolitan area. The city benefits from its suburban location offering guests a quieter alternative to downtown Minneapolis while maintaining reasonable access to urban attractions, though this positioning also means it faces more competition from traditional accommodations and experiences more pronounced seasonal swings than year-round destination markets.

Best Neighborhoods for Airbnb in Andover

The most promising Airbnb investment neighborhoods in Andover include the Bunker Hills area near the golf course and water park which attracts families and golf enthusiasts year-round with strong pricing power due to recreational amenities, the neighborhoods around Andover Boulevard and Hanson Boulevard offering convenient highway access to Minneapolis while maintaining suburban charm for business travelers, the residential areas near Bunker Lake Boulevard that provide easy access to both Bunker Hills Regional Park and are popular with families visiting the area's numerous lakes and trails, the developments around 135th Avenue which offer newer construction homes appealing to guests seeking modern amenities while being centrally located within the city, the neighborhoods near Round Lake Boulevard that capitalize on proximity to multiple lakes and outdoor recreation while being close to shopping and dining options, and the areas around Andover High School and community facilities that attract visiting families for school events and sports tournaments with consistent demand throughout the academic year, with all these areas benefiting from Andover's growing population of young families and professionals who generate referral business and repeat bookings.

Short-term Rental Regulations in Andover

Andover, Minnesota requires short-term rental operators to obtain a conditional use permit through the city's planning department, with applications requiring detailed property information, floor plans, and neighbor notification procedures. Properties are typically limited to a maximum occupancy of two guests per bedroom plus two additional guests, with total occupancy not exceeding 10 people, and parking must accommodate one vehicle per bedroom plus one additional space. The city generally requires owner-occupancy for short-term rentals, meaning the property must serve as the owner's primary residence, though some exceptions may apply for properties in specific zoning districts. Short-term rentals are primarily permitted in residential zoning districts but face restrictions in certain neighborhoods, particularly those with homeowner association covenants that prohibit such activities. The registration process involves submitting a conditional use permit application with fees typically ranging from $300-500, providing proof of insurance, completing a safety inspection, and obtaining necessary state and local tax registrations. Recent regulatory changes have included stricter enforcement of noise ordinances, enhanced parking requirements, mandatory annual renewals of permits, and increased penalties for violations, with the city implementing a complaint-driven monitoring system and requiring operators to provide 24-hour contact information for addressing neighbor concerns.

Short-term Rental Fees and Taxes in Andover

Short-term rentals in Andover, Minnesota are subject to several fees and taxes including the state lodging tax of 3% on gross receipts, plus local lodging taxes that typically range from 2-4% depending on the specific jurisdiction within Anoka County where Andover is located. Property owners must obtain a rental license which costs approximately $150-300 annually, and may need to register with the Minnesota Department of Revenue for tax collection purposes with registration fees around $50. Additional costs include potential homeowner association fees if applicable, business license fees of roughly $100-200 per year, and compliance with local zoning requirements which may involve inspection fees of $75-150. Tourism promotion taxes may apply at rates of 1-2% in some areas, and owners are responsible for collecting and remitting all applicable state and local sales taxes. Fire safety inspections may be required annually at costs of $100-200, and some properties may need special use permits costing $200-500 depending on zoning classifications.

* The data on this page is pulled from various internet sources, it is not individually verified by our investment team. To get the most up to date data and insights, please contact the STRSearch team directly.

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How to start an Airbnb in Andover, Minnesota?

To start an Airbnb in Andover, Minnesota, begin by researching local zoning laws and regulations through the City of Andover Planning Department, as the city requires short-term rental operators to obtain a conditional use permit and business license, with properties needing to be owner-occupied and located in residential zones that allow home-based businesses. Contact Anoka County for additional permit requirements and ensure compliance with Minnesota state tax obligations including sales tax registration. Find a suitable property in approved residential areas, focusing on neighborhoods near Bunker Hills Regional Park or close to Highway 10 for accessibility to Minneapolis-St. Paul metro area attractions. Furnish the space with quality furniture, linens, and amenities including high-speed internet, kitchen essentials, and local guidebooks featuring nearby attractions like the Rum River or Bunker Beach Water Park. Create your listing on Airbnb and VRBO platforms with professional photos highlighting proximity to Twin Cities (approximately 20 miles), outdoor recreation opportunities, and family-friendly amenities. Set competitive pricing around $80-120 per night based on local market rates, implement a thorough cleaning protocol between guests, establish clear house rules regarding noise levels to maintain good neighbor relations, and consider using property management software or local companies like RedAwning or Vacasa for booking management, guest communication, and maintenance coordination to ensure smooth operations while complying with Andover's requirement for responsive local management.

What's the best way to identify good STR properties in Andover, Minnesota?

To identify profitable short-term rental properties in Andover, Minnesota, focus on locations within 15-20 minutes of Minneapolis-St. Paul metro attractions, near Bunker Hills Regional Park, or close to corporate centers like Medtronic and 3M facilities that generate business travel demand. Target 3-4 bedroom single-family homes or townhomes built after 1990 with modern amenities, full kitchens, multiple bathrooms, parking, and outdoor spaces that appeal to families visiting the Twin Cities or business travelers seeking alternatives to hotels. Conduct pricing analysis using AirDNA and Mashvisor to benchmark nightly rates between $80-150 depending on property size and season, with higher rates during summer months and Minnesota State Fair periods. Research competition by analyzing existing Airbnb and VRBO listings within 5-mile radius, noting occupancy rates, guest reviews, and pricing strategies of top-performing properties. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through Edina Realty or RE/MAX Results to evaluate purchase prices against projected rental income, while consulting Anoka County zoning regulations and Andover city ordinances regarding short-term rental permits and restrictions to ensure compliance before investing.

How to get an Airbnb permit in Andover, Minnesota?

To obtain an Airbnb/STR permit in Andover, Minnesota, you must first contact the City of Andover Planning Department at City Hall located at 1685 Crosstown Boulevard NW to determine current short-term rental regulations, as many Minnesota municipalities have implemented or are developing STR ordinances since 2020-2022. The application process typically requires submitting a completed short-term rental permit application form, proof of property ownership or lease agreement allowing STR use, a site plan showing parking areas and property layout, proof of liability insurance (usually $1 million minimum), contact information for a local property manager if you're not local, and payment of application fees ranging from $200-500 annually. You'll need to provide documentation showing compliance with fire safety codes, occupancy limits based on bedrooms and square footage, adequate parking spaces (typically 1-2 spaces per unit), and waste management plans. The city may require a conditional use permit or zoning variance depending on your property's location, with fees potentially reaching $1,000-2,000 for these additional permits. Processing time generally takes 30-60 days from complete application submission, during which the city may conduct property inspections and notify neighboring properties. Andover likely requires STR operators to maintain guest registries, limit occupancy to 2 people per bedroom plus 2 additional guests, restrict quiet hours from 10 PM to 8 AM, and ensure 24/7 contact availability for noise or emergency complaints.

Is it legal to operate a short-term rental in Andover, Minnesota?

Short-term rentals (STRs) in Andover, Minnesota are generally legal but subject to local regulations and zoning restrictions. The city typically requires STR operators to obtain proper permits and comply with residential zoning requirements, which may limit operations in certain neighborhoods or require conditional use permits. Common restrictions include occupancy limits, parking requirements, noise ordinances, and safety standards including smoke detectors and emergency exits. Andover likely prohibits STRs in areas zoned exclusively for single-family residential use without special permits, and the city has implemented registration requirements and inspection protocols similar to other Twin Cities suburbs. Recent changes in Minnesota municipalities have included stricter enforcement of existing regulations and enhanced neighbor notification processes, with Andover updating its ordinances around 2020-2022 to address growing concerns about STR impacts on residential neighborhoods while balancing property owner rights and tourism benefits.

What are the best places to invest in Airbnb in Andover, Minnesota?

The best areas for Airbnb investment in Andover, Minnesota include the neighborhoods near Bunker Hills Regional Park, which attracts year-round visitors for golf, skiing, and outdoor activities, making it ideal for recreational tourism. The areas around Highway 10 and Bunker Lake Boulevard offer excellent accessibility for business travelers commuting to Minneapolis-St. Paul metro area while providing a quieter suburban alternative. Properties near the Andover Community Center and YMCA benefit from sports tournaments and family events throughout the year. The neighborhoods close to Rum River Central Park are attractive due to the scenic waterfront location and proximity to trails, appealing to nature enthusiasts and weekend getaways. Areas near major retail centers like Northdale Boulevard provide convenience for guests while maintaining residential charm. The districts around Andover High School and middle schools can capitalize on visiting families for school events, graduations, and sports competitions. Properties within walking distance of local restaurants and entertainment venues along Crosstown Boulevard offer added value for guests seeking dining and nightlife options.

Airbnb and lodging taxes in Andover, Minnesota

Airbnb properties in Andover, Minnesota are subject to Minnesota state sales tax of 6.875% and state lodging tax of 3%, which are automatically collected by Airbnb and remitted to the Minnesota Department of Revenue on behalf of hosts for stays under 30 days. Anoka County, where Andover is located, does not impose additional lodging taxes as of 2023. The City of Andover does not currently have a specific short-term rental tax or transient occupancy tax beyond state requirements. Hosts must register with the Minnesota Department of Revenue if they collect taxes independently, though most rely on Airbnb's automatic collection system which handles remittance monthly. Stays of 30 days or longer are typically exempt from lodging taxes but may still be subject to sales tax depending on the arrangement, and properties used exclusively for long-term rentals (over 30 days) may qualify for exemptions from short-term rental regulations and associated tax collection requirements.

Total cost to purchase, furnish and operate an Airbnb in Andover, Minnesota

The total cost to start an Airbnb in Andover, Minnesota is approximately $385,000-$425,000. Property purchase costs around $350,000 based on median home prices in the area as of 2023. Furnishing a 3-bedroom property requires $15,000-$25,000 for quality furniture, bedding, kitchenware, and decor to create an attractive rental space. Initial setup costs including professional photography, listing creation, and basic renovations total $3,000-$5,000. Permits and fees in Andover include business license ($100), short-term rental permit ($200-$500), and potential HOA approval fees totaling $800-$1,200. Insurance for short-term rentals costs $2,000-$3,000 annually, with landlord and liability coverage. Utilities including electricity, gas, water, internet, and cable average $300-$400 monthly or $1,800-$2,400 for six months. First six months operating costs encompass cleaning services ($150 per turnover), Airbnb platform fees (3% host fee), property management software ($50/month), maintenance reserves ($200/month), marketing costs ($100/month), and miscellaneous supplies ($100/month), totaling approximately $4,200-$6,000. Additional considerations include property taxes ($4,000-$6,000 annually) and potential mortgage costs if financing the purchase.

Are Airbnb properties in Andover, Minnesota profitable?

Airbnb properties in Andover, Minnesota typically generate annual revenues of $15,000-$35,000 for entire homes and $8,000-$18,000 for private rooms, with average daily rates ranging from $85-$150 depending on property size and amenities. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($25-$40 per turnover), property management (10-20% of revenue), utilities ($150-$300 monthly), insurance ($800-$1,500 annually), and maintenance costs ($2,000-$4,000 yearly). Properties near Bunker Hills Regional Park and those offering lake access command premium rates, with successful hosts achieving 65-75% occupancy rates and net profit margins of 25-35%. A typical 3-bedroom home in Andover generating $28,000 annually might incur $16,800 in expenses (including mortgage interest, taxes, utilities, cleaning, and maintenance), yielding approximately $11,200 in net profit or a 40% profit margin. Success factors include professional photography, competitive pricing strategies, proximity to Minneapolis-St. Paul metro attractions, consistent 5-star ratings, and amenities like hot tubs or game rooms that differentiate properties in this suburban market where business travelers and families visiting the Twin Cities area represent the primary guest demographics.

What is the expected return on investment for an Airbnb in Andover, Minnesota?

Airbnb investments in Andover, Minnesota typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, based on average property acquisition costs of $280,000-$350,000 and nightly rates of $85-$120 during peak seasons. Properties generally reach profitability within 18-24 months, with occupancy rates averaging 65-75% annually due to Andover's proximity to Minneapolis-St. Paul metro area and seasonal lake tourism. Initial investment requirements including down payment, furnishing, and setup costs typically range from $70,000-$90,000, while monthly gross revenues average $1,800-$2,400 depending on property size and amenities. The market benefits from consistent demand from business travelers, families visiting local attractions, and seasonal tourists, with higher performance during summer months (May-September) when nightly rates can reach $140-$160, contributing to the overall annual returns in the 8-12% range.

What company can help me find and buy a profitable Airbnb in Andover, Minnesota?

STRSearch is a national platform that helps investors identify profitable short-term rental properties in Andover, Minnesota, using data analytics to evaluate potential returns. Local real estate agents in the Twin Cities metro area like those at RE/MAX Results, Coldwell Banker Realty, and Keller Williams Premier Realty have experience with investment properties and short-term rental markets in Andover. National services include Mashvisor, which provides Airbnb investment analysis tools, AirDNA for market data and revenue projections, and BiggerPockets for connecting with local investors and agents. RedAwning offers property management and investment services for short-term rentals, while companies like Awning and AvantStay provide full-service Airbnb management solutions. Local property management companies such as North Residential and Twin Cities property managers can assist with ongoing operations once properties are acquired.

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