Is Brookings, South Dakota Good for Airbnb Investment?

Potentially—Brookings, South Dakota combines visitor demand with long-term real estate upside.

• Presents a compelling opportunity, largely driven by its status as a vibrant college town and a regional hub.
• Current market conditions in Brookings show a steady demand for short-term rentals, especially during South Dakota State University (SDSU) events, local festivals, and agricultural conferences.
• Tourism trends indicate a growing interest in smaller, authentic Midwestern experiences, benefiting cities like Brookings that offer a blend of educational attractions, local businesses.
• Property values in Brookings have generally shown stable appreciation, making real estate an attractive long-term asset.
• The investment potential for Airbnb here is positive due to a consistent influx of students' families, visiting faculty, and event attendees.

$800–$1,500 per month based on location, season, and property quality.

• Based on available market data and regional analysis, Airbnb hosts in Brookings, South Dakota typically earn between $800-$1,500 per month.
• Peak earnings occur during summer months (June-August) and university events, where properties can generate $1,200-$2,000 monthly.
• Factors significantly impacting earnings include proximity to SDSU campus, property size and amenities, with entire homes outperforming private rooms by 40-60%.
• The relatively small market size of approximately 23,000 residents means competition is moderate, but demand is primarily driven by university visitors, business travelers.

Potentially strong—typical annual ROI is 8–12%.

• Typically generate ROI between 8-12% annually, with payback periods averaging 7-10 years due to the city's college town dynamics driven by South Dakota State University.
• Properties near campus or downtown areas command nightly rates of $80-120, with occupancy rates around 60-70% during the academic year and lower summer occupancy of 40-50%.
• The seasonal nature of demand, heavily influenced by university events, graduation, and football games.
• Compared to long-term rentals in Brookings, which generate steady monthly income of $800-1,200 and ROI of 6-8%.
• The limited tourist attractions beyond the university mean that successful Airbnb investments depend heavily on targeting visiting families, prospective students, and business travelers.

Brookings, South Dakota averages 45–55% annual occupancy, with seasonal variation.

• Airbnb occupancy rates in Brookings, South Dakota typically average around 45-55% annually, with significant seasonal variation driven by the presence of South Dakota State University and regional tourism patterns.
• Peak occupancy occurs during late spring through early fall (May-September) when rates can reach 65-75%, coinciding with university events, graduation ceremonies.
• Winter months see occupancy drop to 25-35% due to harsh weather conditions and reduced travel demand.
• The back-to-school period in August and homecoming events in October also drive higher occupancy rates of 60-70%.
• Compared to South Dakota's statewide Airbnb occupancy average of approximately 40-50%, Brookings performs slightly better due to its university town status and position along Interstate 29, while both significantly trail national averages of 60-65% found in major metropolitan and tourist destination markets across the United States.

The strongest opportunities balance visitor demand, nightly rates, and acquisition cost.

• The downtown core area near Main Street offers the strongest Airbnb investment potential in Brookings due to its walkability to restaurants, shops, and cultural venues.
• The neighborhoods surrounding South Dakota State University, particularly areas within a few blocks of campus, provide consistent demand from visiting parents, prospective students, and university guests.
• The residential areas near Oakwood Lakes State Park appeal to outdoor enthusiasts and families seeking recreational activities.
• The established neighborhoods around Hillcrest Golf Course attract visitors participating in tournaments and golf-focused getaways.
• The newer residential developments on the city's south side offer modern amenities and appeal to business travelers and families.
• The areas near the Swiftel Center benefit from event-driven demand, as this venue hosts conferences, sports tournaments.

Yes, but only where zoning permits short-term rentals and every required license is current.

• Brookings, South Dakota currently allows short-term rentals in most residential zones with a conditional use permit requirement that must be obtained through the city's planning and zoning department.
• Properties are limited to a maximum occupancy of two people per bedroom plus two additional guests, with total occupancy not exceeding 12 people.
• Owner-occupancy is not required for short-term rentals, allowing investment properties to operate as vacation rentals.
• The city restricts short-term rentals from operating in certain high-density residential areas near the university campus and requires a minimum 150-foot separation between short-term rental properties to prevent over-concentration.
• Recent changes implemented in 2022-2023 include stricter noise ordinance enforcement with potential permit revocation after three verified complaints, mandatory posting of house rules and emergency contact information.

Tax rates vary by jurisdiction; licensing, inspection, and insurance costs are additional.

• Short-term rentals in Brookings, South Dakota are subject to several fees and taxes including the state sales tax of 4.2% and municipal sales tax of 2% for a combined 6.2% tax rate on rental income.
• Property owners must obtain a business license costing around $25-50 annually and register with the South Dakota Department of Revenue at no cost.
• Additional costs may include a one-time zoning compliance fee of $100-200 and potential homeowner association fees if applicable.
• The city may also impose occupancy limits and safety inspection fees ranging from $75-150 annually, and owners are responsible for collecting and remitting the 6.2% combined sales tax monthly or quarterly to the state.