Is Davenport, North Dakota Good for Airbnb Investment?

To start an Airbnb in Davenport, North Dakota, begin by researching local zoning laws and regulations through the Cass County Planning Department and Davenport city officials, as this small community may have specific short-term rental restrictions or require business licenses. Contact the North Dakota Department of Commerce and local tax authorities to understand state lodging taxes (typically 4-7%) and any local occupancy taxes that may apply. Find a suitable property by working with local real estate agents familiar with Davenport's housing market, focusing on properties near recreational areas like the Sheyenne River or agricultural tourism attractions, with average property prices ranging from $150,000-$300,000. Obtain necessary permits including a business license from Cass County, fire safety inspections if required, and ensure compliance with North Dakota's innkeeper liability insurance requirements. Furnish the property with durable, comfortable furniture suitable for the rural setting, including amenities like high-speed internet, heating systems capable of handling harsh winters, and outdoor equipment for local activities. List your property on Airbnb and other platforms like VRBO, highlighting proximity to Fargo (about 45 minutes away), outdoor recreation opportunities, and peaceful rural atmosphere, with competitive pricing around $75-125 per night based on regional market rates. Manage the property by establishing relationships with local cleaning services, maintenance contractors, and consider using property management software to handle bookings, communicate with guests about winter weather conditions, and maintain the property year-round in North Dakota's challenging climate.

For identifying profitable short-term rental properties in Davenport, North Dakota, focus on locations near the Missouri River waterfront, downtown business district, and proximity to major employers like Basin Electric Power Cooperative and local agricultural facilities, as these areas attract both business and leisure travelers. Target properties with 2-4 bedrooms, full kitchens, dedicated parking, and outdoor spaces that can accommodate hunting and fishing enthusiasts who frequent the area seasonally. Conduct pricing analysis by researching comparable Airbnb and VRBO listings within a 25-mile radius, noting that rates typically range from $80-150 per night depending on property size and amenities, with peak demand during hunting seasons (September-November) and summer months. Competition research should include analyzing occupancy rates of existing STRs in nearby Bismarck and Minot markets, as Davenport's smaller market may have limited direct competition but faces challenges with lower year-round demand. Utilize tools like AirDNA for market data, Mashvisor for investment analysis, and local resources such as the Davenport Chamber of Commerce and North Dakota Tourism Division for understanding seasonal visitor patterns, while also consulting with local real estate agents familiar with the agricultural and energy sector workforce housing needs that could provide steady booking opportunities.

To obtain an Airbnb/STR permit in Davenport, North Dakota, contact the Davenport City Hall at 701-724-3755 or visit their office at 315 3rd Avenue North to inquire about short-term rental regulations, as this small city may not have formal STR permitting processes established yet. If permits are required, you'll likely need to submit a business license application, provide proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental unit, and contact information for a local property manager if you're not residing locally. Expect fees ranging from $50-200 for initial permits plus annual renewal fees of $25-100, though Davenport may have lower costs given its size. The application timeline typically takes 2-4 weeks for processing once all documents are submitted. Specific Davenport requirements may include compliance with residential zoning laws, maximum occupancy limits based on square footage, adequate parking spaces for guests, smoke and carbon monoxide detectors in all sleeping areas, and maintaining a guest registry. You'll also need to register for North Dakota state sales tax collection and remit the 5% state sales tax plus any local lodging taxes that may apply, and ensure compliance with building and fire codes through potential inspections.

Short-term rentals (STRs) are generally legal in Davenport, North Dakota, as the small city in Cass County does not have specific municipal ordinances prohibiting or heavily regulating vacation rentals as of 2024. However, operators must comply with standard business licensing requirements, collect and remit state sales tax (currently 5%) and local lodging taxes where applicable, and ensure properties meet basic safety and zoning requirements for residential areas. The city follows North Dakota state regulations which allow STRs but require proper tax registration through the State Tax Department. There are no specific prohibited areas within Davenport's city limits, though properties must comply with existing residential zoning laws and homeowners association rules if applicable. Recent changes at the state level in 2022-2023 have streamlined tax collection processes for STR operators, requiring platforms like Airbnb and VRBO to collect taxes directly in many cases. Property owners should verify current local business license requirements with Davenport city officials and ensure compliance with fire safety codes, as enforcement has become more standardized across North Dakota municipalities in recent years.

The best areas for Airbnb investment in Davenport, North Dakota would be the downtown historic district near Main Street, which attracts visitors interested in the area's agricultural heritage and small-town charm, and neighborhoods within walking distance of local businesses and the Davenport Community Center where regional events and gatherings occur. The residential areas near Highway 18 offer good accessibility for business travelers and those visiting nearby farms or attending agricultural conferences, while properties close to the Davenport School and community facilities appeal to families visiting for school events or sports tournaments. The eastern residential section near the grain elevators and agricultural facilities attracts industry professionals and consultants working with local farming operations, particularly during harvest seasons from August through October when demand peaks due to seasonal agricultural workers and inspectors.

Airbnb properties in Davenport, North Dakota are subject to the state's 5% lodging tax, which applies to all transient accommodations including short-term rentals with stays under 30 days. The tax is collected by the accommodation provider and must be remitted monthly to the North Dakota Tax Commissioner's office by the 20th of the following month, with returns filed even if no tax is due. Cass County, where Davenport is located, does not impose an additional county lodging tax, and the city of Davenport does not have a separate municipal occupancy tax as of 2023. Airbnb typically collects and remits this tax automatically for hosts in North Dakota through their platform since 2019, though hosts remain ultimately responsible for compliance and should verify collection is occurring. Exemptions include stays of 30 days or longer, accommodations provided to permanent residents, and certain government and charitable organization bookings, though documentation must be maintained to support any exemption claims.

Starting an Airbnb in Davenport, North Dakota requires approximately $180,000-220,000 in total initial investment. Property purchase costs around $150,000 based on median home prices in rural North Dakota markets. Furnishing a 2-3 bedroom property with quality furniture, appliances, linens, and décor typically costs $15,000-20,000. Initial setup including professional photography, listing creation, and basic renovations runs $3,000-5,000. Permits and licensing fees are minimal at approximately $200-500 for local business licenses and short-term rental permits. Insurance including liability and property coverage specifically for short-term rentals costs $1,200-1,800 annually. Utility setup and deposits for electricity, gas, water, internet, and cable total around $800-1,200. First six months of operating costs including utilities ($600/month), cleaning supplies and services ($200/month), maintenance reserves ($150/month), platform fees to Airbnb/VRBO (3% of bookings estimated at $100/month), and marketing expenses ($100/month) total approximately $6,900. Property taxes and ongoing insurance should also be factored at roughly $2,000-3,000 for the initial six-month period.

Airbnb properties in Davenport, North Dakota face challenging profitability conditions due to the city's small population of approximately 2,300 and limited tourism infrastructure. Average daily rates typically range from $45-75, with occupancy rates averaging 35-45% annually, generating gross revenues of $6,000-12,000 per year for typical 2-3 bedroom properties. Operating expenses including mortgage payments, utilities, cleaning fees, insurance, and platform commissions typically consume 70-85% of gross revenue, leaving net profit margins of 15-30% or roughly $1,500-3,000 annually. Success factors include targeting oil field workers and business travelers passing through on Highway 94, offering competitive rates below $60/night, and maintaining properties near the interstate for convenience. Properties within walking distance of local businesses like Casey's General Store or near recreational areas along the Sheyenne River tend to perform marginally better. The market is highly seasonal with stronger performance during summer months when agricultural and construction activity peaks, while winter months often see occupancy rates drop below 25%, making year-round profitability challenging without supplemental income streams.

Airbnb investments in Davenport, North Dakota typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, though the market faces challenges due to limited tourism infrastructure and seasonal demand fluctuations. Properties near the University of Mary or downtown areas command higher occupancy rates of 45-60% annually, with average daily rates between $75-120 depending on property size and amenities. Initial profitability usually occurs within 18-24 months for well-positioned properties, with investors seeing break-even on cash investments by month 20-30. The market benefits from oil industry workers seeking temporary housing and occasional leisure travelers, but competition from traditional hotels and limited year-round demand can impact returns. Properties purchased below $150,000 with renovation budgets under $25,000 tend to perform best, achieving gross rental yields of 10-14% annually when factoring in Davenport's relatively low property acquisition costs and moderate operating expenses.

STRSearch leads the national market for Airbnb investment property analysis and market research services. In Davenport, North Dakota, local real estate agents like those at Century 21 Morrison Realty and RE/MAX Results have experience with investment properties, while Coldwell Banker King and Berkshire Hathaway HomeServices agents can assist with short-term rental acquisitions. National services include AirDNA for market analytics, Mashvisor for investment property analysis, and BiggerPockets for investor networking and deal sourcing. Local property management companies such as Dakota Property Management and Prairie Property Services offer Airbnb management expertise. Real estate investment firms like Roofstock and Awning specialize in turnkey rental properties, while HostGPO provides purchasing assistance for short-term rental investors. Regional brokerages including Keller Williams and eXp Realty have agents familiar with vacation rental investments, and services like RedAwning and Vacasa offer market insights and property management solutions for Airbnb investors in the greater Fargo-Moorhead metropolitan area that serves the Davenport region.