Is Des Moines, Iowa Good for Airbnb Investment?

Potentially—Des Moines, Iowa combines visitor demand with long-term real estate upside.

• Presents a promising opportunity, largely driven by the city's growing economy, affordable property values, and increasing tourism.
• Des Moines, as the state capital and a burgeoning hub for insurance and financial services, attracts business travelers, while its growing arts and culture scene, along with events like the Iowa State Fair.
• Current market conditions indicate a stable real estate market with relatively low entry costs compared to larger metropolitan areas, offering a higher potential for positive cash flow.
• While tourism trends are not as robust as major coastal cities, Des Moines has seen consistent growth in visitor numbers.
• Property values remain attractive, making it accessible for new investors, and the investment potential is further enhanced by a strong local economy and a supportive environment for small businesses.

$1,200–$2,800 per month based on location, season, and property quality.

• Based on available market data, Airbnb hosts in Des Moines, Iowa typically earn between $1,200 to $2,800 per month.
• Seasonal variations show peak earnings during summer months (June through August) when revenue can increase by 25-40% due to higher tourism and business travel.
• Spring and fall maintain moderate occupancy levels with earnings closer to the annual average.
• Key factors affecting earnings include property location (downtown and near Iowa State Fairgrounds command premium rates).
• Occupancy rates in Des Moines generally range from 60-75% annually, with successful hosts maintaining higher occupancy through competitive pricing, quality photos, and responsive guest communication.

Potentially strong—typical annual ROI is 8–15%.

• Airbnb investments in Des Moines typically generate ROI between 8-15% annually, with higher-performing properties in downtown areas and near Drake University achieving 12-18% returns due to consistent business traveler and event demand.
• The average payback period ranges from 6-9 years, depending on initial investment and property location, with downtown condos and renovated historic properties showing faster returns.
• Compared to traditional long-term rentals in Des Moines that average 6-10% ROI, short-term rentals can generate 20-40% higher returns but require significantly more active management and face seasonal fluctuations.
• Properties within 3 miles of downtown Des Moines command average nightly rates of $85-120, with occupancy rates of 65-75% annually, while suburban properties typically see $60-85 nightly rates with 55-65% occupancy.

Des Moines, Iowa averages 55–65% annual occupancy, with seasonal variation.

• Airbnb occupancy rates in Des Moines, Iowa typically average around 55-65% annually, with peak seasons occurring during summer months (June-August) when rates can reach 70-75% due to increased tourism, outdoor events.
• Spring and fall months generally see moderate occupancy rates of 50-60%, while winter months (December-February) experience the lowest occupancy at approximately 40-50% due to harsh weather conditions and reduced travel demand.
• Des Moines performs slightly below the Iowa state average of 60-68% and significantly below the national Airbnb average of 70-75%.
• The city's occupancy rates are heavily influenced by business travel during weekdays and event-driven demand, particularly during major conferences at the Iowa Events Center, Drake Relays in April.

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

• The best neighborhoods for Airbnb investment in Des Moines include Downtown/Court Avenue District, which offers proximity to entertainment venues, restaurants.
• East Village stands out for its trendy atmosphere, walkability to farmers markets, boutique shops, and appeals to younger demographics willing to pay premium rates for hip accommodations.
• Ingersoll Park provides a balance of residential charm and accessibility to Drake University, attracting visiting families and university-related guests with moderate pricing potential.
• Sherman Hill offers historic character with Victorian homes that photograph well for listings, drawing tourists interested in architectural heritage while maintaining reasonable investment costs.
• Beaverdale presents a family-friendly suburban option with good value pricing, appealing to longer-term stays from relocating families or extended business trips.
• Gray's Lake area capitalizes on recreational attractions and scenic views, commanding higher rates during summer months from visitors seeking outdoor activities and waterfront proximity.
• Valley Junction in nearby West Des Moines provides antique shopping district appeal and historic train depot attractions.

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

• Des Moines requires short-term rental operators to obtain a business license and register their property with the city.
• Properties are limited to a maximum occupancy of two people per bedroom plus two additional guests, with total occupancy not exceeding 10 people regardless of bedroom count.
• Owner-occupancy is not required for short-term rentals, allowing investment properties to operate as vacation rentals.
• Zoning restrictions permit short-term rentals in most residential districts including R1, R2, and R3 zones.
• The registration process involves submitting an application with property details, proof of insurance, emergency contact information, and passing a city inspection that covers fire safety, egress routes.
• Recent changes implemented around 2020-2022 include stricter noise ordinance enforcement with potential permit revocation for repeated violations, mandatory posting of house rules regarding parking and quiet hours.

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

• Short-term rentals in Des Moines, Iowa are subject to several fees and taxes including the state lodging tax of 7% and local hotel/motel tax of 7% for a combined rate of 14% on gross rental receipts.
• Property owners must obtain a business license from the city costing approximately $25-50 annually, register with the Iowa Department of Revenue for sales tax collection.
• The state sales tax of 6% applies to rental income, and operators must remit the 7% state lodging tax monthly if gross receipts exceed $2,000 annually.
• Additional costs may include fire safety inspections at $75-150, zoning compliance fees of $100-300, and potential homeowners association fees.
• Property taxes may increase if the residential property is reclassified for commercial use, and operators must maintain proper insurance coverage which can cost $500-1,500 annually above standard homeowners policies.