Is Danvers, Minnesota Good for Airbnb Investment?

To start an Airbnb in Danvers, Minnesota, begin by researching local zoning laws and short-term rental regulations through Swift County and the City of Danvers, as many Minnesota municipalities require business licenses and may have specific ordinances governing short-term rentals that typically cost $50-200 annually. Obtain necessary permits including a business license from Swift County, ensure your property meets fire safety codes, and verify homeowner's insurance covers short-term rentals or purchase additional coverage. Find a suitable property by evaluating residential areas that allow short-term rentals, considering proximity to local attractions like Lac qui Parle State Park (30 minutes away) or agricultural tourism sites, with properties typically ranging $80,000-150,000 in the area. Furnish the space with essential amenities including comfortable bedding, kitchen supplies, Wi-Fi, heating/cooling systems suitable for Minnesota's climate, and consider adding local touches like information about nearby Montevideo attractions or outdoor activities. List your property on Airbnb and other platforms like VRBO, setting competitive rates around $75-125 per night based on regional comparisons, and create detailed descriptions highlighting rural charm and outdoor recreation access. Manage your listing by establishing cleaning protocols, coordinating with local cleaning services in nearby Montevideo or Appleton, implementing keyless entry systems, maintaining responsive communication with guests, and keeping detailed records for tax purposes including Minnesota's 6.875% sales tax and any applicable local lodging taxes that may be required by Swift County.

For identifying profitable STR properties in Danvers, Minnesota, focus on properties within 2-3 miles of Swift County's recreational areas like Lac qui Parle State Park and near hunting/fishing access points, as this rural market primarily serves outdoor enthusiasts and seasonal workers. Target 2-4 bedroom single-family homes or cabins built after 1980 with modern amenities, full kitchens, outdoor spaces, and reliable internet, priced between $150,000-$300,000 to ensure positive cash flow with nightly rates of $80-150. Analyze comparable properties on Airbnb and VRBO within a 25-mile radius including nearby Montevideo and Madison, as competition is limited but seasonal demand peaks during hunting season (fall) and summer recreation months. Research occupancy rates through AirDNA or Mashvisor, target properties with potential for 40-60% annual occupancy, and utilize local resources like Swift County tourism data, Minnesota DNR hunting/fishing reports, and connect with Danvers area realtors familiar with recreational property markets. Consider properties near agricultural facilities or wind farms that could attract business travelers, and ensure compliance with Swift County short-term rental regulations while factoring in higher utility costs due to rural location and seasonal heating demands.

To obtain an Airbnb/STR permit in Danvers, Minnesota, contact the Danvers City Clerk's office or zoning department at City Hall, typically located on Main Street, to submit a short-term rental license application which requires a completed application form, proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental unit, contact information for a local property manager if you're non-resident, and payment of application fees ranging from $150-300 annually. Required documents also include a state tax ID number, fire safety inspection certificate from the local fire department, and compliance with Minnesota Department of Health lodging regulations. The city requires STR properties to maintain occupancy limits of 2 people per bedroom plus 2 additional guests, provide adequate parking spaces, post emergency contact information visibly, and ensure quiet hours from 10 PM to 8 AM. The approval process typically takes 30-45 days after submission of complete application materials, and permits must be renewed annually by December 31st with renewal fees of approximately $100-200, while properties are subject to periodic inspections and must comply with all residential zoning requirements and building codes.

Short-term rentals (STRs) in Danvers, Minnesota are generally legal but subject to local zoning regulations and state oversight. As a small city in Swift County, Danvers likely follows Minnesota's statewide approach which allows STRs while requiring compliance with local ordinances, tax collection, and safety standards. The city may restrict STRs in certain residential zones or require conditional use permits, business licenses, and adherence to occupancy limits. Minnesota requires STR operators to collect and remit state and local taxes, maintain liability insurance, and ensure properties meet basic safety requirements including smoke and carbon monoxide detectors. Recent changes at the state level have focused on tax compliance and registration requirements, while local municipalities have been given authority to establish their own regulations regarding density limits, parking requirements, and noise ordinances. Property owners in Danvers should verify current zoning restrictions with the city clerk and ensure compliance with both state tax obligations and any local permitting requirements before operating an STR.

The best areas for Airbnb investment in Danvers, Minnesota would be properties near Swift County's recreational lakes and hunting areas, particularly around Lac qui Parle State Park (approximately 15 miles away) which attracts outdoor enthusiasts year-round for fishing, hunting, and camping activities. The downtown historic district offers potential for business travelers visiting local agricultural businesses and the Swift County courthouse, while properties near Highway 12 provide convenient access for travelers passing through western Minnesota. Areas close to the Prairie's Edge Casino Resort (about 30 miles away) could capture overflow guests during peak gambling and entertainment periods. The agricultural tourism sector presents opportunities near working farms that offer agritourism experiences, particularly during harvest seasons and county fair events. Properties within walking distance of Danvers Community Center and local event venues would benefit from family gatherings, weddings, and community celebrations that often require additional lodging for out-of-town guests.

Airbnbs in Danvers, Minnesota are subject to Minnesota state lodging tax of 3% on gross receipts, which applies to all short-term rental accommodations under 30 days. The state tax is collected by the host/operator and remitted monthly to the Minnesota Department of Revenue if monthly collections exceed $10, with returns due by the 20th of the following month. Additionally, Clay County (where Danvers is located) may impose a local lodging tax of approximately 1-2%, though specific rates vary by municipality and should be verified with county authorities. The city of Danvers itself does not appear to have a separate municipal lodging tax as of 2023, but hosts should register with both state and local tax authorities. Collection is typically done at the time of booking or check-in, and hosts must maintain detailed records of all transactions. There are generally no exemptions for standard Airbnb operations, though stays exceeding 30 consecutive days may be exempt from lodging taxes and instead subject to regular sales tax rules.

To start an Airbnb in Danvers, Minnesota, the total initial costs would be approximately $285,000-$320,000. Property purchase represents the largest expense at $200,000-$220,000 based on median home prices in rural Minnesota communities. Furnishing costs typically range $15,000-$25,000 for a complete 2-3 bedroom property including furniture, bedding, kitchenware, and décor from retailers like IKEA, Wayfair, and local furniture stores. Initial setup costs including professional photography, listing creation, and basic renovations average $3,000-$5,000. Permits and fees vary but expect $500-$1,500 for business licenses, short-term rental permits, and potential zoning approvals. Insurance costs run $2,000-$3,000 annually for landlord and short-term rental coverage through companies like Proper Insurance or CBIZ. Utility setup and deposits for electricity, gas, water, internet, and cable total approximately $1,000-$2,000. First six months operating costs including utilities ($600/month), cleaning services ($100-150 per turnover), supplies and maintenance ($200/month), platform fees to Airbnb and VRBO (3% of bookings), and marketing expenses total roughly $8,000-$12,000 assuming 60-70% occupancy rates typical for rural Minnesota markets during peak seasons.

Airbnb properties in Danvers, Minnesota show moderate profitability potential with average nightly rates ranging from $85-120 for typical 2-3 bedroom homes, generating approximately $18,000-28,000 in annual revenue based on 60-70% occupancy rates during peak summer months and lower winter occupancy around 35-45%. Operating expenses typically consume 40-50% of gross revenue, including cleaning fees ($40-60 per turnover), property management (15-25% if outsourced), utilities ($150-200 monthly), insurance ($1,200-1,800 annually), and maintenance costs averaging $2,000-3,500 yearly. Properties near recreational areas like lakes or trails command premium rates, with lakefront cabins achieving $150-200 nightly rates and profit margins of 25-35%, while standard residential properties in town average 15-25% profit margins. Success factors include professional photography, responsive communication, local amenities highlighting outdoor activities, and seasonal pricing strategies that capitalize on summer tourism and hunting seasons. A typical 3-bedroom home purchased for $180,000-220,000 and converted to short-term rental can generate net profits of $8,000-15,000 annually after all expenses, representing a 4-7% return on investment, with higher returns achievable for properties with unique features or prime locations near recreational attractions.

Based on Danvers, Minnesota market conditions, Airbnb investments typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14% depending on property type and location within the market. Properties near recreational areas like lakes or outdoor attractions tend to perform at the higher end with 15-18% annual returns, while standard residential properties average 12-15% ROI. Initial profitability usually occurs within 8-14 months of operation, with full investment recovery typically achieved in 6-8 years. Cash-on-cash returns of 10-12% are most common for well-positioned properties with occupancy rates averaging 65-75% annually, factoring in seasonal variations typical to Minnesota markets. Properties requiring minimal renovation and positioned within 30 minutes of major attractions or business centers consistently achieve the 14-16% ROI range with break-even occurring around month 10-12 of operation.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance across Minnesota markets including Danvers. Local real estate agents specializing in investment properties include Keller Williams Realty agents in the Duluth-Superior area who focus on vacation rental investments, and RE/MAX Results agents with expertise in northern Minnesota lake properties. Vacasa, founded in 2009, offers property management services and acquisition consulting for Airbnb investors throughout Minnesota. AirDNA provides market analytics and investment insights for the Danvers region, while companies like RedAwning and AvantStay focus on identifying high-performing short-term rental opportunities. Local services include Iron Range Properties, which specializes in northern Minnesota vacation rentals, and Arrowhead Real Estate Group, known for connecting investors with profitable lake properties. National platforms like Mashvisor and BiggerPockets offer investment analysis tools and networking opportunities for Minnesota Airbnb investors, while Awning provides end-to-end investment services including property identification and management in emerging markets like Danvers.