Is Brookings, South Dakota Good for Airbnb Investment?

To start an Airbnb in Brookings, South Dakota, begin by researching local zoning laws and contacting the Brookings Planning Department to understand short-term rental regulations, as the city may require business licenses or special permits for properties rented less than 30 days. Obtain necessary permits including a business license from the City of Brookings (approximately $25-50 annually) and ensure compliance with fire safety codes and building inspections. Find a suitable property in residential zones that allow short-term rentals, considering proximity to South Dakota State University for student and visitor demand, with average property prices ranging $150,000-300,000 for single-family homes. Furnish the space with essential amenities including Wi-Fi, kitchen appliances, linens, and local touches highlighting Brookings' agricultural heritage and university connection, budgeting $5,000-15,000 for initial furnishing. Create your Airbnb listing with professional photos showcasing the property's proximity to SDSU campus, McCrory Gardens, and downtown attractions, setting competitive rates around $75-125 per night based on local market analysis. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating key exchanges or installing smart locks, maintaining the property regularly, and ensuring compliance with South Dakota tax requirements including collecting and remitting state sales tax of 4.5% plus local taxes, while considering hiring local cleaning services and property management companies if needed for hands-off operation.

To identify profitable short-term rental properties in Brookings, South Dakota, focus on locations within 1-2 miles of South Dakota State University campus, near downtown Main Street, or close to McCrory Gardens and other local attractions, as these areas generate consistent demand from visiting families, university guests, and tourists. Target 2-4 bedroom single-family homes or duplexes built after 1980 with modern amenities, full kitchens, parking, and outdoor spaces, as these features appeal to families and groups visiting the university town. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against the estimated $80-120 nightly rates in Brookings, while analyzing seasonal patterns around SDSU events, graduation, and summer tourism peaks. Research competition by monitoring existing Airbnb and VRBO listings within a 3-mile radius, noting occupancy rates, guest reviews, and pricing strategies of the approximately 15-25 active STR properties in the market. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through Realtor.com, while connecting with Brookings Area Chamber of Commerce for tourism insights and consulting with local property management companies like Brookings Property Management for market-specific guidance on regulations, seasonal demand patterns, and optimal property locations near SDSU and downtown amenities.

To obtain an Airbnb/STR permit in Brookings, South Dakota, you must first contact the Brookings City Planning Department at City Hall located at 520 3rd Avenue to determine if short-term rentals are permitted in your specific zoning district, as the city has been developing regulations since 2019. Submit an application through the Planning Department which typically requires a completed STR permit application form, proof of property ownership or lease agreement, floor plan of the rental unit, parking plan showing adequate off-street parking, contact information for a local property manager if you're not local, proof of liability insurance (minimum $1 million recommended), and a good neighbor agreement outlining house rules. The application fee is estimated at $150-250 with an annual renewal fee of approximately $100-150. You must also obtain a South Dakota sales tax license from the Department of Revenue and register to collect and remit the state's 4.5% sales tax plus Brookings' local lodging tax of 2%. The approval timeline is typically 30-45 days depending on completeness of application and any required public hearings. Specific Brookings requirements include maintaining a guest registry, posting maximum occupancy limits, providing adequate parking (typically 1 space per bedroom plus 1), ensuring compliance with fire safety codes, and having a local contact person available 24/7 for noise or other complaints, with properties limited to no more than 2 unrelated adults per bedroom and quiet hours enforced from 10 PM to 7 AM.

Short-term rentals (STRs) are generally legal in Brookings, South Dakota, as the city does not have comprehensive regulations specifically prohibiting them as of 2023. However, STR operators must comply with existing zoning ordinances, business licensing requirements, and health and safety codes that apply to all rental properties. The city requires STR operators to obtain proper business licenses and ensure compliance with residential zoning restrictions, which may limit the number of unrelated occupants in certain residential districts. There are no specific prohibited areas designated solely for STR restrictions, but properties must conform to existing residential zoning laws that govern rental activities. Brookings has not implemented recent major legal changes specifically targeting STRs like some larger South Dakota cities, though property owners should verify current business licensing requirements and any homeowners association restrictions that may apply to their specific properties.

The best areas for Airbnb investment in Brookings, South Dakota are the neighborhoods near South Dakota State University campus, particularly the areas around 8th Street and Medary Avenue, which attract consistent demand from visiting parents, prospective students, and university staff throughout the academic year. The downtown historic district along Main Street offers appeal for visitors attending events at the Swiftel Center or exploring local attractions like the South Dakota Art Museum. Properties near the Brookings Country Club and residential areas in the northern part of town around 22nd Avenue provide upscale accommodations for business travelers visiting major employers like 3M, Daktronics, and Rainbow Play Systems. The neighborhoods surrounding Hillcrest Park and Pioneer Park are attractive for families visiting the Children's Museum of South Dakota or attending youth sports tournaments at the various recreational facilities, while areas near the Brookings Regional Airport cater to corporate visitors and provide convenient access for travelers exploring the greater region.

In Brookings, South Dakota, Airbnb hosts are subject to both state and local lodging taxes. The state of South Dakota imposes a 4.5% state sales tax on short-term rental accommodations, while Brookings County adds a 2% county lodging tax, bringing the total occupancy tax rate to approximately 6.5%. These taxes are collected from guests at the time of booking through Airbnb's automatic tax collection system, which began operating in South Dakota around 2019. Airbnb remits these taxes directly to the South Dakota Department of Revenue on a monthly basis, though hosts must still register with the state and obtain a sales tax license. The city of Brookings may also impose additional municipal lodging taxes of 1-2%, depending on current ordinances. Exemptions typically apply to stays exceeding 28 consecutive days, which are considered long-term rentals rather than short-term accommodations, and certain government or military-related bookings may also be exempt from occupancy taxes.

The total cost to start an Airbnb in Brookings, South Dakota is approximately $185,000-$225,000. Property purchase represents the largest expense at $150,000-$180,000 based on median home prices in the area. Furnishing costs range from $8,000-$12,000 for a complete 2-3 bedroom setup including furniture, bedding, kitchenware, and electronics. Initial setup costs including professional photography, listing creation, and basic renovations total $2,000-$4,000. Permits and fees are relatively minimal at $200-$500, covering business licenses and short-term rental permits required by the city. Insurance costs approximately $1,200-$1,800 annually for landlord and short-term rental coverage. Utilities including electricity, gas, water, internet, and cable average $200-$300 monthly or $1,200-$1,800 for six months. First six months operating costs including cleaning services, supplies, maintenance, marketing, and platform fees total $3,000-$5,000. Additional considerations include property taxes of approximately $2,000-$3,000 annually and potential HOA fees if applicable, though many properties in Brookings do not have HOA restrictions.

Airbnb properties in Brookings, South Dakota typically generate modest returns with average daily rates ranging from $75-120 depending on property size and amenities, resulting in monthly revenues of $1,200-2,800 for well-managed properties with 60-70% occupancy rates. Operating expenses including cleaning fees ($25-40 per turnover), utilities ($150-250 monthly), property management (15-25% of revenue), insurance ($100-200 monthly), and maintenance ($200-400 monthly) typically consume 45-60% of gross revenue. Properties near South Dakota State University command premium rates during football season and graduation periods, with some hosts reporting annual profits of $8,000-15,000 on single-family homes purchased for $180,000-250,000, yielding net profit margins of 15-25%. Success factors include proximity to SDSU campus, modern amenities like high-speed internet and updated kitchens, professional photography, and responsive guest communication, with properties within 2 miles of campus consistently outperforming rural listings by 30-40% in both occupancy and rates. The market benefits from limited hotel inventory and steady demand from university visitors, business travelers to 3M and Daktronics facilities, and regional healthcare patients, though seasonality impacts with slower winter months requiring hosts to maintain 6-8 months of operating reserves.

Airbnb investments in Brookings, South Dakota typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, primarily driven by South Dakota State University's student population and visiting families. Properties near campus or downtown areas can achieve occupancy rates of 65-75% annually, with average daily rates of $85-120 depending on property size and amenities. Initial profitability usually occurs within 18-24 months, considering startup costs of $15,000-25,000 for furnishing and property preparation. The market benefits from consistent demand during the academic year (August-May) and summer events, though winter months typically see 30-40% lower occupancy. Properties purchased at $150,000-250,000 with 20-25% down payments generally achieve positive cash flow within the first year, with total returns improving significantly after mortgage principal reduction and modest property appreciation of 3-4% annually in the Brookings market.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental investment opportunities in Brookings, South Dakota, offering comprehensive market analysis and property recommendations. Local real estate agents like Coldwell Banker Lewis-Kirkeby-Hall and Century 21 Associated have experience with investment properties in the Brookings market, while RE/MAX Results and Keller Williams Realty Black Hills provide additional local expertise for Airbnb investors. National services include Mashvisor, which offers rental property analytics and market data for Brookings, and AirDNA, providing short-term rental market insights and performance metrics. Roofstock specializes in turnkey rental properties and occasionally features South Dakota markets, while BiggerPockets connects investors with local professionals and market knowledge. Additional local services include First Western Bank & Trust for investment property financing, and property management companies like Brookings Property Management that can assist with Airbnb operations once properties are acquired.