Is Bayfield, Wisconsin Good for Airbnb Investment?

To start an Airbnb in Bayfield, Wisconsin, begin by researching local regulations through the City of Bayfield clerk's office, as the city requires short-term rental permits and has specific zoning restrictions, particularly in residential areas near Lake Superior. Contact Bayfield County for additional county-level requirements and obtain necessary permits including a business license, short-term rental permit (approximately $150-300 annually), and ensure compliance with fire safety codes and occupancy limits. Find a suitable property by working with local real estate agents familiar with Bayfield's tourism market, focusing on areas within walking distance of the harbor, Apostle Islands ferry dock, or downtown attractions, with properties typically ranging from $200,000-600,000 depending on location and lake views. Furnish the property with durable, comfortable furniture suitable for outdoor enthusiasts visiting for hiking, kayaking, and Apostle Islands tours, including essential amenities like WiFi, full kitchen, linens, and outdoor gear storage. List your property on Airbnb, VRBO, and local tourism websites, highlighting proximity to Apostle Islands National Lakeshore, ferry services, and seasonal attractions like apple orchards and ice caves, with competitive pricing around $150-400 per night depending on season and property size. Manage the property by establishing relationships with local cleaning services, maintenance contractors, and consider hiring Bayfield-based property management companies like those serving the Apostle Islands region, while maintaining compliance with the city's noise ordinances and parking requirements that are strictly enforced during peak summer tourism season.

To identify profitable short-term rental properties in Bayfield, Wisconsin, focus on locations within walking distance of Lake Superior waterfront, near Madeline Island ferry terminals, or close to the Apostle Islands National Lakeshore visitor center, as these areas command premium rates during the peak summer season from June through September. Target properties with 2-4 bedrooms, waterfront or water-view features, outdoor spaces like decks or fire pits, and rustic cabin or historic home aesthetics that appeal to tourists seeking authentic northwoods experiences. Analyze pricing using AirDNA and Mashvisor to benchmark against similar properties, noting that Bayfield STRs typically earn $150-300 per night in summer and $75-150 in shoulder seasons, with annual revenues of $25,000-60,000 for well-positioned properties. Research competition by monitoring active listings on Airbnb and VRBO within a 5-mile radius, paying attention to occupancy rates, guest reviews mentioning location benefits, and seasonal pricing strategies employed by successful hosts. Utilize tools like Rabbu and AllTheRooms for market analysis, consult with local real estate agents familiar with STR regulations, and review Bayfield's municipal codes regarding short-term rental permits and zoning restrictions, while also considering proximity to attractions like the Bayfield Apple Festival venue, hiking trails, and charter fishing operations that drive consistent visitor demand.

To obtain an Airbnb/STR permit in Bayfield, Wisconsin, contact the Bayfield City Clerk's office at City Hall located at 125 South 1st Street or call (715) 779-5712 to begin the application process. You'll need to submit a completed short-term rental license application, provide proof of property ownership or lease agreement, submit a site plan showing parking areas and emergency exits, obtain liability insurance with minimum $1 million coverage naming the City of Bayfield as additional insured, pass a safety inspection conducted by the fire department, and provide contact information for a local property manager if you're not residing within 50 miles of Bayfield. Required documents include a Wisconsin seller's permit for room tax collection, completed background check, and floor plan of the rental unit. The application fee is approximately $200 with an annual renewal fee of $150, plus inspection fees of around $75. The timeline typically takes 4-6 weeks from submission to approval, depending on scheduling of required inspections. Bayfield-specific requirements include adherence to the city's noise ordinance with quiet hours from 10 PM to 7 AM, maximum occupancy limits of 2 people per bedroom plus 2 additional guests, mandatory posting of emergency contact information and house rules, and compliance with the 5.5% room tax collection and remittance to the Wisconsin Department of Revenue monthly.

Short-term rentals (STRs) are legal in Bayfield, Wisconsin, but operate under specific municipal regulations that the city has implemented to balance tourism revenue with residential neighborhood character. The city requires STR operators to obtain a business license and comply with zoning restrictions that typically limit rentals in certain residential areas while allowing them more freely in commercial and mixed-use zones. Bayfield has implemented occupancy limits, parking requirements, and noise ordinances specifically targeting STRs, with violations subject to fines and potential license revocation. Recent changes around 2022-2023 included stricter enforcement mechanisms and updated registration requirements as the city responded to increased STR activity post-COVID. Properties must meet safety standards including smoke detectors and emergency egress requirements, and operators are required to provide local contact information for guest issues. The regulations generally prohibit STRs in single-family residential zones while permitting them in areas zoned for tourism and commercial use, reflecting Bayfield's status as a popular Lake Superior destination community that seeks to preserve its small-town residential character while accommodating visitor lodging needs.

The most promising Airbnb investment areas in Bayfield, Wisconsin center around the historic downtown waterfront district near the ferry docks, where proximity to Madeline Island ferry services and Lake Superior shoreline activities drive consistent tourist demand from May through October. The Rittenhouse Avenue corridor offers excellent potential due to its walkability to restaurants, shops, and the Bayfield Maritime Museum, attracting visitors attending the annual Apple Festival in October and berry festivals throughout summer. Properties near Bayfield Regional Conservancy lands and hiking trail access points perform well with outdoor enthusiasts visiting for kayaking, fishing, and cross-country skiing, particularly those seeking authentic cabin experiences. The residential areas within 6-8 blocks of downtown provide optimal investment opportunities as they offer parking availability and larger properties suitable for group rentals while maintaining easy access to Bayfield's main attractions, including the historic Bayfield Inn area and properties with Lake Superior views that command premium rates during peak sailing and festival seasons.

Airbnb properties in Bayfield, Wisconsin are subject to multiple lodging taxes including Wisconsin's state sales tax of 5% and room tax of 5%, plus Bayfield County's room tax of 3%, totaling approximately 13% in combined taxes on short-term rental accommodations. The Wisconsin Department of Revenue requires hosts to register for a seller's permit and collect these taxes from guests, with monthly remittance due by the 20th of the following month for properties with regular bookings. Bayfield County's room tax is collected separately and remitted quarterly to the county treasurer, with funds typically supporting tourism promotion and local infrastructure. Airbnb may collect and remit some of these taxes automatically for hosts depending on local agreements, but hosts remain ultimately responsible for compliance and should verify collection with the Wisconsin Department of Revenue and Bayfield County. Properties rented for less than 15 days per year by the owner may qualify for certain exemptions, and stays exceeding 30 consecutive days are generally exempt from room taxes but still subject to sales tax.

To start an Airbnb in Bayfield, Wisconsin, expect total costs of approximately $285,000-$350,000. Property purchase represents the largest expense at $200,000-$275,000 for a median lakefront or downtown property suitable for vacation rental. Furnishing costs range $15,000-$25,000 for quality furniture, bedding, kitchen essentials, and décor to create an appealing guest experience. Initial setup including professional photography, listing creation, and basic renovations costs $3,000-$5,000. Permits and fees total $500-$1,500 covering business licenses, short-term rental permits, and potential zoning approvals required by Bayfield County. Insurance premiums for short-term rental coverage cost $2,000-$3,500 annually. Utility setup and deposits for electricity, water, internet, and cable run $500-$800. First six months operating costs including utilities ($1,800), cleaning supplies and services ($1,200), maintenance reserves ($1,000), marketing ($600), and property management software ($300) total approximately $4,900. Additional considerations include potential HOA fees, property taxes, and emergency repair funds that could add $5,000-$10,000 to initial capital requirements.

Airbnb properties in Bayfield, Wisconsin show strong seasonal profitability due to the area's proximity to Apostle Islands National Lakeshore and Lake Superior recreation activities. Properties typically generate $15,000-$35,000 annually with peak summer rates of $150-$300 per night for lakefront cabins and $80-$150 for standard homes, while winter rates drop to $60-$120 per night. Operating expenses average 35-45% of gross revenue, including cleaning fees ($75-$125 per turnover), property management (15-25%), utilities ($200-$400 monthly), insurance ($1,200-$2,500 annually), and maintenance costs. Successful properties maintain 65-75% occupancy rates during May-October peak season, with profit margins ranging from 25-40% for well-managed properties. Key success factors include waterfront or water-view locations, proximity to Bayfield's ferry dock and downtown area, professional photography highlighting outdoor amenities, and partnerships with local activity providers like sea kayaking companies and charter fishing services. Properties within walking distance of Bayfield's restaurants and shops, particularly those accommodating 6-8 guests with amenities like fire pits, decks, and boat access, consistently outperform the market with some generating over $45,000 annually despite the region's shorter tourist season compared to year-round destinations.

Airbnb investments in Bayfield, Wisconsin typically generate annual ROI of 12-18% due to the area's strong tourism appeal as a gateway to the Apostle Islands National Lakeshore and seasonal vacation rental demand. Cash-on-cash returns generally range from 8-14% annually, with properties near Lake Superior or downtown commanding premium rates of $150-250 per night during peak summer months (June-September) and $80-120 during shoulder seasons. Most investors achieve profitability within 18-24 months, with waterfront or lake-view properties reaching break-even faster at 12-18 months due to higher occupancy rates of 65-75% during tourist season. The market benefits from limited hotel inventory and strong demand from visitors to Madeline Island, Apostle Islands cruises, and fall color tourism, though winter months see significant occupancy drops to 25-35%, requiring investors to factor seasonal cash flow variations into their projections.

STRSearch is a national platform that helps investors identify profitable short-term rental properties across markets including Bayfield, Wisconsin. Local real estate agents in the Bayfield area who specialize in investment properties include Coldwell Banker Mulleady-Rhlm and Century 21 Bayfield Realty, both of which have experience with vacation rental properties in the region. National services like Mashvisor, AirDNA, and BiggerPockets provide market analysis and property identification tools for Bayfield's vacation rental market. Vacasa and RedAwning offer property management services for Airbnb investors in the area, while local property management companies such as Bayfield Property Management and Superior Shores Property Services cater to short-term rental owners. Real estate investment companies like Roofstock and Awning (formerly known as Properly) also operate in Wisconsin markets including Bayfield. Local mortgage brokers such as First National Bank of the Lakes and Northwoods Community Credit Union provide financing options for investment properties in the Bayfield market, and vacation rental consulting services like VRConsultants and STR Wealth have worked with investors in northern Wisconsin lake communities since around 2018-2020.