Is Brainerd, Minnesota Good for Airbnb Investment?

To start an Airbnb in Brainerd, Minnesota, begin by researching local regulations through the Brainerd City Hall (218-829-2424) as the city requires short-term rental permits and compliance with zoning ordinances, particularly in residential areas near the lakes. Obtain necessary permits including a business license from the city, sales tax permit from Minnesota Department of Revenue, and ensure compliance with fire safety codes and building inspections. Find a suitable property focusing on areas near Gull Lake, Pelican Lake, or downtown Brainerd where tourism is highest, considering properties with 2-4 bedrooms that can accommodate families visiting for fishing, boating, or Brainerd International Raceway events. Furnish the space with durable, lake-themed decor including essential amenities like high-speed internet, full kitchen appliances, linens, towels, and outdoor furniture for decks or patios, budgeting approximately $15,000-25,000 for a complete setup. List your property on Airbnb with professional photos highlighting lake views or proximity to attractions, setting competitive rates around $120-200 per night depending on season and size, with peak rates during summer months and racing events. Manage the property by establishing relationships with local cleaning services (budget $75-100 per turnover), maintenance contractors, and consider using property management companies like Vacasa or RedAwning if you're not local, while maintaining Minnesota's required 6.875% sales tax collection and remittance to the state.

To identify profitable short-term rental properties in Brainerd, Minnesota, focus on locations within 1-2 miles of Gull Lake, Nisswa, or downtown Brainerd's entertainment district, as these areas attract the highest tourist traffic year-round. Target 3-4 bedroom properties with lake access, docks, or lake views, along with amenities like hot tubs, fire pits, and spacious outdoor areas that appeal to families and groups visiting for fishing, boating, and seasonal activities. Analyze pricing using AirDNA and Mashvisor to benchmark against similar properties, aiming for $150-300 per night depending on size and amenities, with peak summer rates potentially reaching $400+ for premium lakefront properties. Research competition by studying occupancy rates and reviews of existing STRs within a 5-mile radius, particularly focusing on properties managed by companies like Vacasa or RedAwning that dominate the Brainerd Lakes area market. Utilize tools like BiggerPockets for investment analysis, STRScore for market insights, and local resources such as the Brainerd Lakes Area Economic Development Corporation for tourism data, while ensuring compliance with Crow Wing County's short-term rental regulations and obtaining necessary permits through the city's licensing department.

To obtain an Airbnb/STR permit in Brainerd, Minnesota, you must first contact the Brainerd City Planning Department at City Hall located at 501 Laurel Street to determine if short-term rentals are permitted in your zoning district, as the city requires a conditional use permit for most STR operations. Submit an application for a conditional use permit along with required documents including a site plan, proof of property ownership or lease agreement, floor plans showing maximum occupancy, parking plan demonstrating adequate off-street parking, and a management plan detailing how the property will be maintained and monitored. The application fee is approximately $350-500, and you may need additional fees for public hearing notices estimated at $200-300. The process typically takes 6-8 weeks and includes a public hearing before the Planning Commission, followed by City Council review if approved. Brainerd requires STR operators to maintain liability insurance of at least $1 million, provide contact information for a local representative available 24/7, limit occupancy to 2 people per bedroom plus 2 additional guests, ensure adequate parking (typically 1 space per bedroom), and comply with all building, fire, and health codes including smoke and carbon monoxide detectors in all sleeping areas. Once approved, you must also register with the Minnesota Department of Revenue for sales tax collection and remittance, and renew your permit annually with the city.

Short-term rentals (STRs) are legal in Brainerd, Minnesota, but operate under specific regulations established by the city. As of 2023, Brainerd requires STR operators to obtain a business license and comply with zoning restrictions that primarily allow these rentals in commercial and mixed-use districts, while residential areas have more limited permissions. The city has implemented occupancy limits, parking requirements, and noise ordinances that STR operators must follow. Properties must meet safety standards including smoke and carbon monoxide detectors, and operators are required to provide local contact information for guests. Brainerd has also established registration requirements and periodic inspections to ensure compliance. Recent changes in 2022-2023 included stricter enforcement mechanisms and clearer definitions of what constitutes a short-term rental versus traditional lodging. The city prohibits STRs in certain residential neighborhoods to preserve community character, and violations can result in fines or license revocation. Property owners must also comply with state tax requirements and local lodging taxes that apply to short-term rental operations.

The best areas for Airbnb investment in Brainerd, Minnesota are the Gull Lake Chain area, particularly around Nisswa and the Whitefish Chain, which attract summer tourists for fishing, boating, and lake activities from May through September. The downtown Brainerd historic district offers year-round potential due to its proximity to Paul Bunyan State Trail, local restaurants, and the Brainerd International Raceway which hosts major NASCAR events drawing thousands of visitors in July and August. The Crow Wing State Park vicinity appeals to outdoor enthusiasts seeking hiking, cross-country skiing, and historical sites related to the old logging town. Properties near Cragun's Resort and Madden's Resort areas benefit from overflow guests during peak wedding seasons and corporate retreats, while the Grand View Lodge area on Gull Lake commands premium rates due to its upscale tourism market and proximity to championship golf courses that operate from April through October.

In Brainerd, Minnesota, Airbnb hosts are subject to both state and local lodging taxes that must be collected from guests and remitted to tax authorities. The Minnesota state lodging tax is 3% on gross receipts from lodging rentals, while Crow Wing County imposes an additional 3% lodging tax, bringing the total occupancy tax rate to approximately 6% for short-term rentals in Brainerd. These taxes are collected by the host at the time of booking or check-in and must be remitted quarterly to the Minnesota Department of Revenue for the state portion and to Crow Wing County for the local portion, with returns typically due by the 20th of the month following the end of each quarter. Hosts must register for a lodging tax permit with both the state and county before beginning operations, and detailed records of all rental transactions must be maintained. Exemptions may apply for stays exceeding 30 consecutive days, rentals to permanent residents, and certain government or charitable organization bookings, though hosts should verify current exemption criteria as they can change. The city of Brainerd may also require business licensing for short-term rental operations, and hosts are responsible for ensuring compliance with all applicable zoning regulations and safety requirements in addition to tax obligations.

The total cost to start an Airbnb in Brainerd, Minnesota is approximately $285,000-$315,000. Property purchase costs around $225,000 based on median home prices in the Brainerd Lakes area as of 2023. Furnishing a 2-3 bedroom property runs $15,000-$20,000 including beds, linens, kitchen essentials, living room furniture, and décor. Initial setup costs including professional photography, listing creation, and basic renovations total $3,000-$5,000. Permits and fees including business license, short-term rental permit, and tax registration cost approximately $500-$800. Insurance for short-term rental coverage adds $2,000-$3,000 annually. 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 including cleaning supplies, maintenance, marketing, platform fees (Airbnb charges 3% host fee), and miscellaneous expenses total $4,000-$6,000. Additional considerations include potential HOA fees, property taxes averaging $3,000-$4,000 annually, and a recommended cash reserve of $10,000-$15,000 for unexpected repairs and vacancy periods during slower tourism seasons in the Brainerd Lakes region.

Airbnb properties in Brainerd, Minnesota typically generate annual revenues of $15,000-$35,000 for lake-area cabins and $8,000-$18,000 for in-town properties, with occupancy rates averaging 45-65% during peak summer months (May-September) when tourists visit the Brainerd Lakes area. Operating expenses generally run 40-60% of gross revenue, including cleaning fees ($75-$125 per turnover), property management (15-25%), utilities ($150-$300 monthly), insurance ($1,200-$2,400 annually), and maintenance costs. Profit margins typically range from 25-45% for well-managed properties, with lakefront cabins near Gull Lake or Pelican Lake commanding premium rates of $150-$300 per night during summer compared to $80-$150 for standard properties. Success factors include proximity to popular fishing spots, seasonal marketing targeting Minneapolis-St. Paul metro visitors, professional photography showcasing lake views, and partnerships with local activity providers like Cragun's Resort or Grand View Lodge for referrals. Properties within 10 miles of Brainerd International Raceway see booking spikes during racing events, while winter properties near ski areas like Ski Gull maintain 20-30% occupancy rates with lower nightly rates of $60-$120, making year-round properties more profitable than seasonal-only operations.

Airbnb investments in Brainerd, Minnesota typically generate annual ROI of 12-18% due to the city's strong tourism market driven by its proximity to over 460 lakes and popular destinations like Gull Lake and the Paul Bunyan Trail. Cash-on-cash returns generally range from 8-14% annually, with properties near lakefronts or recreational areas achieving the higher end of this range. Most investors reach profitability within 18-24 months, particularly those targeting 3-4 bedroom cabins or homes that can accommodate families and groups visiting for fishing, boating, and seasonal activities. Properties purchased in the $200,000-$350,000 range with 20-25% down payments typically see monthly gross revenues of $2,500-$4,200 during peak summer months (May-September) and $1,200-$2,000 during off-season periods. The market benefits from consistent demand from Minneapolis-St. Paul metro area visitors (approximately 2.5 hours drive) and shows occupancy rates of 65-75% annually for well-managed properties, with successful investments often achieving full cost recovery within 6-8 years while building long-term equity appreciation of 3-5% annually.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties in Brainerd, Minnesota, using data analytics and market insights. Local real estate agents specializing in Airbnb investments in the Brainerd Lakes area include Edina Realty agents who focus on vacation rental properties, RE/MAX Results agents with short-term rental expertise, and Coldwell Banker Realty professionals experienced in lakefront investment properties. National services include AirDNA for market analysis and revenue projections, Mashvisor for investment property analysis, BiggerPockets for investor networking and education, and Awning for short-term rental investment guidance. Local property management companies that assist investors include Vacasa, which manages Airbnb properties in the Brainerd area, and regional firms like Brainerd Lakes Property Management and North Country Property Services. Additional specialized services include RedAwning for vacation rental marketing, HostGPO for property management tools, and local contractors and interior designers who specialize in optimizing properties for short-term rental success in the popular Brainerd Lakes tourism market.