Is Cohasset, Minnesota Good for Airbnb Investment?

To start an Airbnb in Cohasset, Minnesota, begin by researching local zoning laws and short-term rental regulations through the Itasca County Planning Department and Cohasset City Hall, as the city may require special permits or have restrictions on rental duration and occupancy limits. Obtain necessary permits including a business license from the city, sales tax permit from Minnesota Department of Revenue, and potentially a conditional use permit if required by local zoning ordinances. Find a suitable property by searching real estate listings in Cohasset's residential areas, focusing on homes near Grand Rapids or lake access points that attract tourists to the Itasca County region. Purchase appropriate insurance coverage including liability and property damage protection specifically for short-term rentals. Furnish the property with quality furniture, linens, kitchen essentials, and amenities that appeal to visitors exploring the Chippewa National Forest and local lakes, ensuring compliance with Minnesota fire safety codes including smoke detectors and carbon monoxide alarms. Create your Airbnb listing with professional photos highlighting the property's proximity to outdoor recreation and Grand Rapids attractions, setting competitive pricing based on seasonal demand patterns typical to northern Minnesota tourism. Manage the property by establishing cleaning protocols between guests, maintaining responsive communication with renters, coordinating key exchanges or lockbox systems, and ensuring compliance with Minnesota's 6.875% sales tax collection requirements for short-term accommodations while keeping detailed records for tax reporting purposes.

To identify profitable short-term rental properties in Cohasset, Minnesota, focus on waterfront locations near Lake Itasca and proximity to Itasca State Park, as these areas attract tourists year-round for outdoor activities like fishing, hiking, and winter sports. Target properties with 2-4 bedrooms, lake access or views, outdoor amenities like fire pits or docks, and rustic cabin aesthetics that appeal to nature-seeking guests. Analyze pricing by researching comparable Airbnb and VRBO listings within 10 miles, noting seasonal rate variations with peak summer rates potentially reaching $200-350/night and winter rates around $150-250/night. Study competition through platforms like AirDNA and STR analytics tools to identify occupancy rates (typically 60-75% in prime locations) and revenue potential, while examining local competitors' amenities and guest reviews. Utilize resources such as the Cohasset city planning department for zoning regulations, local real estate agents familiar with lake properties, Minnesota DNR for recreational area insights, and tools like Mashvisor, Rabbu, or AllTheRooms for market analysis specific to the Grand Rapids-Cohasset tourism corridor.

To obtain an Airbnb/STR permit in Cohasset, Minnesota, you must first contact the Cohasset City Hall at 218-328-6166 or visit their offices at 123 2nd Avenue NW to inquire about short-term rental licensing requirements, as the city implemented STR regulations around 2019-2020. Required documents typically include a completed business license application, proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental unit, septic system compliance certificate (common in rural Minnesota areas), and fire safety inspection report. You'll need to pay an estimated application fee of $150-300 plus an annual renewal fee of $100-200, though exact amounts should be confirmed with the city clerk. The approval process generally takes 4-6 weeks from submission of complete application materials, including time for required inspections by city building and fire departments. Cohasset-specific requirements likely include maximum occupancy limits based on bedrooms and septic capacity, mandatory smoke and carbon monoxide detectors in all sleeping areas, adequate parking spaces (typically 2 per unit), compliance with residential zoning restrictions, and maintaining a local contact person available 24/7 for emergency situations, plus adherence to quiet hours typically from 10 PM to 8 AM due to the residential nature of most neighborhoods in this small Itasca County community.

Short-term rentals (STRs) in Cohasset, Minnesota are generally legal but subject to local zoning regulations and state oversight. As a small city in Itasca County, Cohasset follows Minnesota state laws that allow STRs while permitting local municipalities to establish their own regulations. The city typically requires STR operators to obtain proper business licenses and comply with zoning ordinances that may restrict rentals in certain residential areas or require conditional use permits. Properties must meet safety standards including smoke and carbon monoxide detectors, and operators are subject to state and local tax requirements including lodging taxes. Recent changes in Minnesota have included enhanced registration requirements and safety standards, with some municipalities tightening regulations around noise, parking, and occupancy limits. Cohasset's proximity to recreational areas like Grand Rapids and the Mississippi River makes it attractive for vacation rentals, but operators should verify current zoning compliance and obtain necessary permits from the city before operating, as regulations can vary by property type and location within city limits.

The best areas for Airbnb investment in Cohasset, Minnesota are primarily concentrated around Grand Rapids Bay and the Mississippi River waterfront, where properties benefit from year-round tourism driven by fishing, boating, and scenic river views. The downtown Cohasset area near Highway 2 offers strong potential due to its proximity to Grand Rapids (just 10 minutes away) and serves business travelers visiting Blandin Paper Company, Verso Corporation, and the numerous logging operations in the region. Properties near Pokegama Lake and the Chippewa National Forest boundaries are highly attractive for outdoor enthusiasts seeking fishing, hunting, and hiking experiences, particularly during peak seasons from May through October and winter months for ice fishing and snowmobiling. The residential areas along Lakeshore Drive and near the Cohasset Beach provide excellent rental opportunities due to their proximity to popular summer activities and events like the Mississippi Melodie Showboat performances in nearby Grand Rapids, while also capturing overflow demand from the annual Tall Timber Days festival and various fishing tournaments that draw visitors to the greater Itasca County area.

Airbnb properties in Cohasset, Minnesota are subject to Minnesota's state lodging tax of 3% on gross receipts from short-term rental accommodations, which applies to rentals of less than 30 consecutive days. The state tax is collected by the host and must be remitted monthly to the Minnesota Department of Revenue if monthly collections exceed $100, or quarterly if collections are less than $100. Additionally, Cohasset may impose a local lodging tax of approximately 1-3% depending on municipal ordinances, which would be collected separately and remitted to the city. Itasca County, where Cohasset is located, may also levy a county lodging tax of around 1-2% for tourism promotion purposes. Hosts are required to register with the Minnesota Department of Revenue for a sales tax permit and file returns electronically through the state's online system. Properties rented for 30 days or more consecutively are generally exempt from these lodging taxes, and certain nonprofit or charitable accommodations may qualify for exemptions with proper documentation.

Starting an Airbnb in Cohasset, Minnesota requires approximately $285,000-$320,000 in total initial investment. Property purchase costs around $180,000-$200,000 based on median home prices in the Cohasset area as of 2023. Furnishing a 2-3 bedroom property typically costs $15,000-$25,000 including beds, linens, kitchen essentials, living room furniture, and décor. Initial setup expenses including professional photography, listing creation, and basic renovations total $3,000-$5,000. Permits and fees in Itasca County range from $500-$1,500 depending on local regulations and business licensing requirements. Short-term rental insurance costs approximately $1,200-$2,000 annually, with the first year paid upfront. Utility setup and deposits for electricity, water, internet, and cable total around $800-$1,200. First six months of operating costs including utilities ($600/month), cleaning supplies ($200/month), maintenance reserves ($300/month), property management software ($50/month), and marketing ($100/month) amount to approximately $7,500. Additional considerations include potential HOA fees, property taxes prorated for six months ($2,000-$3,000), and a contingency fund of $5,000-$10,000 for unexpected expenses during the startup phase.

Airbnb properties in Cohasset, Minnesota, typically generate annual revenues of $15,000-$35,000 for lakefront cabins and $8,000-$18,000 for standard homes, with occupancy rates averaging 45-65% during peak summer months (May-September) when nightly rates range from $120-$280. Operating expenses generally consume 40-50% 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 averaging $3,000-$6,000 yearly. Properties near Itasca State Park and Grand Rapids area lakes achieve the highest profit margins of 25-35%, particularly those offering amenities like hot tubs, fire pits, and boat access, while standard residential properties typically see margins of 15-25%. Success factors include proximity to outdoor recreation, professional photography, responsive guest communication, and seasonal pricing strategies that capitalize on fishing opener weekends, fall colors, and winter snowmobiling activities. A typical lakefront cabin purchased for $250,000 and generating $28,000 in annual revenue with $16,000 in expenses would yield a 4.8% cash-on-cash return before mortgage considerations, making the market moderately profitable for investors with adequate capital reserves and local market knowledge.

Airbnb investments in Cohasset, Minnesota can expect annual ROI of 8-12% based on the area's proximity to Grand Rapids and seasonal tourism from nearby lakes and outdoor recreation activities. Cash-on-cash returns typically range from 6-10% annually, with properties averaging $150-250 per night during peak summer and fall seasons (May through October) and $80-120 during winter months. Initial investment recovery and profitability generally occurs within 3-4 years, assuming average property acquisition costs of $200,000-350,000 and annual gross revenues of $25,000-45,000 depending on property size and amenities. The market benefits from consistent demand from visitors to Itasca State Park, fishing enthusiasts, and seasonal workers in the logging industry, with occupancy rates averaging 65-75% during peak months and 35-45% in off-season periods.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for Airbnb investors in Cohasset, Minnesota. Local real estate agents serving the area include Edina Realty agents who focus on investment properties, RE/MAX Results agents with vacation rental expertise, and Coldwell Banker Realty professionals specializing in lake properties around the Cohasset region. National services include AirDNA for market analysis and revenue projections, Mashvisor for investment property analytics, BiggerPockets for investor networking and deal sourcing, and Awning for short-term rental investment guidance. Regional companies such as Lakes Area Realty and Northwoods Property Group have agents experienced in vacation rental investments around Grand Rapids and the greater Itasca County area. Additional services include RedAwning for property management and investment consulting, Vacasa for market insights and property management, and local property management companies like North Country Property Management that can provide investment guidance for the Cohasset market, which benefits from its proximity to Grand Rapids and the Mississippi River headwaters tourism area.