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 $100-200 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 near the Apostle Islands or downtown, with properties typically ranging from $200,000-500,000 depending on location and size. Furnish the property with durable, comfortable furniture emphasizing the area's outdoor recreation theme, including kayak storage, hiking gear space, and cozy indoor amenities for year-round guests, budgeting $15,000-25,000 for complete furnishing. List your property on Airbnb, VRBO, and local tourism websites, highlighting proximity to Apostle Islands National Lakeshore, ferry access, and seasonal activities like apple orchards and ice caves, with competitive pricing around $150-300 per night depending on season and property size. Manage the property by establishing relationships with local cleaning services, maintenance contractors, and consider partnering with Bayfield's visitor bureau for marketing, while maintaining high standards for the area's discerning tourists who visit for outdoor recreation and scenic beauty.

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, and close to the Apostle Islands National Lakeshore visitor centers, as these areas command premium rates of $200-400 per night during peak summer months. Target properties with 2-4 bedrooms, lake views or water access, outdoor amenities like fire pits and decks, and rustic cabin or historic home character that appeals to tourists seeking authentic northwoods experiences. Analyze pricing using AirDNA and Mashvisor to benchmark against comparable properties, noting that Bayfield's seasonal market peaks June through October with occupancy rates reaching 80-90%, while winter months drop to 30-40% occupancy at reduced rates of $100-200 nightly. Research competition by studying existing Airbnb and VRBO listings within a 5-mile radius, identifying gaps in amenities like hot tubs, boat slips, or pet-friendly options that could differentiate your property. Utilize STR-specific tools like Rabbu and AllTheRooms for market analysis, partner with local property management companies like Bayfield Property Management or Superior Vacation Rentals for operational insights, and consult Bayfield's city planning department regarding zoning restrictions and permit requirements, as the city has implemented STR regulations requiring licenses and limiting density in residential areas.

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 developed to balance tourism revenue with residential neighborhood character. The city requires STR operators to obtain proper licensing and permits, with restrictions typically including occupancy limits, parking requirements, and noise ordinances. Bayfield generally prohibits or heavily restricts STRs in certain residential zones while allowing them more freely in commercial and mixed-use areas near the downtown waterfront district. Recent changes around 2020-2022 have included stricter enforcement of existing regulations and enhanced permit requirements, partly in response to increased tourism pressure on this popular Lake Superior destination community. Property owners must comply with state tax collection requirements and local zoning ordinances, with the city maintaining the right to revoke permits for violations of noise, parking, or occupancy rules that impact neighboring residents.

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 walkable access 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 sea kayaking, fishing, and fall color tours. The residential areas within 6-8 blocks of downtown, particularly streets like 4th and 5th Avenue, provide optimal investment opportunities as they offer quiet residential settings while maintaining easy access to main attractions, ferry services to Apostle Islands National Lakeshore, and seasonal events that draw visitors from Minneapolis-St. Paul metro area and Chicago, with properties typically commanding premium rates during peak summer months and fall foliage season.

Airbnb properties in Bayfield, Wisconsin are subject to multiple lodging taxes including Wisconsin's state transient accommodation tax of 5% and Bayfield County's room tax of 5.5%, totaling 10.5% in combined lodging taxes. The City of Bayfield may impose an additional local room tax of up to 8%, bringing potential total taxes to 18.5%. These taxes apply to stays of less than 30 consecutive days and are collected from guests at the time of booking through Airbnb's automatic tax collection system for most jurisdictions. Property owners must register with the Wisconsin Department of Revenue and obtain a seller's permit, then remit collected taxes monthly by the 20th of the following month using Form ST-12. Bayfield County requires separate registration and monthly remittance of county room taxes. Exemptions typically include stays of 30 days or longer, certain government employees on official business, and some nonprofit organization bookings. Property owners should also verify current local ordinances as Bayfield may have specific registration requirements and additional fees beyond the standard room taxes.

Starting an Airbnb in Bayfield, Wisconsin requires approximately $285,000-$350,000 in total initial investment. Property purchase costs average $220,000-$280,000 for a median 2-3 bedroom home suitable for short-term rental in this Lake Superior coastal town. Furnishing costs range $15,000-$25,000 including beds, linens, kitchen essentials, living room furniture, and outdoor gear appropriate for the area's tourism activities. Initial setup expenses total $3,000-$5,000 covering professional photography, listing creation, welcome materials, and basic amenities. Permits and fees include Wisconsin seller's permit ($20), local business license ($100-$300), and potential zoning compliance costs ($500-$2,000). Insurance runs $2,000-$3,500 annually for short-term rental coverage through companies like Proper Insurance or CBIZ. Monthly utilities average $200-$350 covering electricity, water, internet, and seasonal heating costs. First six months operating expenses total $8,000-$12,000 including cleaning services ($75-$125 per turnover), supplies, maintenance, platform fees (3% Airbnb, 3-5% VRBO), marketing, and property management software subscriptions.

Airbnb properties in Bayfield, Wisconsin demonstrate strong seasonal profitability due to the area's proximity to Apostle Islands National Lakeshore and Lake Superior recreational activities. Properties typically generate $15,000-$35,000 annually with peak summer rates of $150-$300 per night during June through September, while winter rates drop to $80-$150 per night. Operating expenses including cleaning fees ($75-$125 per turnover), property management (15-25% of revenue), utilities ($200-$400 monthly), insurance ($1,500-$3,000 annually), and maintenance ($2,000-$5,000 annually) typically consume 40-60% of gross revenue. Successful properties achieve 15-25% net profit margins by targeting outdoor enthusiasts visiting for sailing, kayaking, hiking, and fall foliage tours. Properties within walking distance of Bayfield's marina and downtown restaurants command premium rates, with waterfront cabins and historic homes performing best. Case studies show that hosts offering amenities like kayak rentals, fire pits, and local activity guides achieve 20-30% higher occupancy rates than basic accommodations, with the most successful properties maintaining 65-80% occupancy during peak season and 25-40% during off-season months.

Airbnb investments in Bayfield, Wisconsin typically generate annual ROI of 12-18% due to the town's prime location on Lake Superior and proximity to Apostle Islands National Lakeshore, with peak summer tourism driving occupancy rates of 70-85% during June through September. Cash-on-cash returns generally range from 8-14% annually, with properties averaging $150-250 per night during peak season and $80-120 during off-season months. Most investors achieve profitability within 18-24 months, particularly for waterfront or near-waterfront properties that can command premium rates of $200-350 per night during summer festivals and outdoor recreation peak times. The market benefits from consistent demand from outdoor enthusiasts visiting for kayaking, hiking, and winter sports, with annual gross rental yields typically reaching $25,000-45,000 for well-positioned 2-3 bedroom properties, though investors should account for seasonal fluctuations where winter months may see occupancy drop to 30-45% but still maintain steady income from ice fishing and cross-country skiing visitors.

STRSearch is a national platform that helps investors identify profitable short-term rental properties across markets including Bayfield, Wisconsin. Local real estate agents serving the Bayfield area who specialize in investment properties include Coldwell Banker East West Properties, RE/MAX Northwoods Realty, and Century 21 Burkett & Associates, with agents like those at Apostle Islands Realty having specific knowledge of the vacation rental market around Lake Superior. National services that assist Airbnb investors include AirDNA for market analysis, Mashvisor for property analytics, BiggerPockets for networking and education, and Awning for short-term rental property identification. Regional companies such as Vacasa and RedAwning provide property management services that can help investors evaluate potential returns, while local property management firms like Bayfield Property Management and North Shore Vacation Rentals offer insights into the seasonal rental market dynamics. Investment-focused platforms like Roofstock and HomeUnion occasionally feature properties in northern Wisconsin markets, and local mortgage brokers familiar with investment property financing in the area include Associated Bank and Charter Bank locations in nearby Ashland.