Is Donnelly, Idaho Good for Airbnb Investment?

To start an Airbnb in Donnelly, Idaho, begin by researching Valley County's short-term rental regulations, which typically require a business license and may have zoning restrictions, particularly in residential areas near Tamarack Resort. Contact Valley County Planning and Zoning Department to obtain necessary permits, which usually include a conditional use permit for short-term rentals and compliance with fire safety codes. Find a suitable property by working with local real estate agents familiar with Donnelly's market, focusing on areas near Brundage Mountain or Lake Cascade that attract tourists year-round, with properties typically ranging from $300,000-$800,000 depending on location and size. Furnish the property with durable, mountain-appropriate furniture and amenities like ski storage, hot tub, and high-speed internet, budgeting approximately $15,000-$30,000 for a complete setup. Create your Airbnb listing with professional photos highlighting outdoor activities, proximity to skiing and lake recreation, and target seasonal pricing of $150-$400 per night depending on property size and season. Manage the property by either handling it yourself or hiring a local property management company like McCall Property Management, ensuring regular maintenance, cleaning between guests, and compliance with Idaho's lodging tax requirements of 2% state tax plus any local taxes, while maintaining proper insurance coverage for short-term rentals.

To identify profitable short-term rental properties in Donnelly, Idaho, focus on locations within 1-2 miles of Tamarack Resort and near Cascade Reservoir for year-round appeal, prioritizing properties with mountain or water views and easy access to recreational activities. Target 3-4 bedroom cabins or homes built after 1990 with amenities like hot tubs, fireplaces, game rooms, and ski storage, as these command premium rates of $200-400 per night during peak seasons. Analyze pricing using AirDNA and Mashvisor to identify properties where potential STR revenue exceeds long-term rental income by 40-60%, typically requiring purchase prices under $600,000 to maintain healthy cash flow. Research competition by studying similar properties within a 5-mile radius on Airbnb and VRBO, noting occupancy rates of 60-75% are achievable with proper marketing, and identify gaps in amenities or property types. Utilize Valley County property records, work with local realtors familiar with STR regulations, monitor Tamarack Resort development plans, and leverage tools like Rabbu and Rentometer while ensuring compliance with Valley County's short-term rental permit requirements and HOA restrictions that may limit rental activities.

To obtain an Airbnb/STR permit in Donnelly, Idaho, you must first contact the City of Donnelly Planning Department at City Hall located at 105 Lakeshore Drive, as the city requires a Conditional Use Permit for short-term rentals in residential zones. Submit an application including a completed CUP form, site plan showing parking and property layout, proof of property ownership or authorization letter, liability insurance documentation (minimum $1 million coverage), septic system approval if applicable, and a neighborhood notification list with adjacent property owners' contact information. Required documents also include a floor plan showing maximum occupancy, parking plan demonstrating adequate off-street parking (typically 2 spaces minimum), and a property management plan detailing noise control, trash collection, and emergency contact procedures. The application fee is approximately $500-750 for the conditional use permit, with additional fees for public notices around $150-200. The timeline typically takes 60-90 days including a mandatory public hearing before the Planning and Zoning Commission, followed by City Council review if required. Donnelly-specific requirements include adherence to the city's noise ordinance, maximum occupancy limits based on septic capacity and square footage, mandatory local contact person available 24/7 within 30 minutes of the property, annual permit renewal, and compliance with fire safety codes including smoke detectors and emergency egress plans.

Short-term rentals (STRs) are legal in Donnelly, Idaho, but operate under Valley County regulations since the city has not enacted its own specific STR ordinances as of 2023. Valley County requires STR operators to obtain a conditional use permit and business license, with properties subject to occupancy limits, parking requirements, and noise restrictions. The county prohibits STRs in certain residential zones without proper permits and requires 24/7 local contact information for guests. Recent changes in 2022-2023 have included stricter enforcement of existing regulations and increased permit fees, with the county responding to growing concerns about housing availability and neighborhood impacts from platforms like Airbnb and VRBO. Properties must comply with fire safety codes, septic system capacity limits, and maintain adequate parking for the maximum occupancy allowed, with violations potentially resulting in permit revocation.

The best areas for Airbnb investment in Donnelly, Idaho are primarily concentrated around Tamarack Resort and the Lake Cascade waterfront districts. The Tamarack Resort area offers year-round appeal with winter skiing and snowboarding from December through March, plus summer mountain biking, hiking, and golf activities that attract outdoor enthusiasts and families seeking mountain recreation experiences. The Lake Cascade waterfront neighborhoods, particularly along the eastern and southern shores, provide excellent investment opportunities due to their proximity to water activities like boating, fishing, and swimming during the peak summer season from June through September, when tourism peaks and nightly rates can command premium pricing. The downtown Donnelly core area near Highway 55 also presents solid investment potential as it serves as a convenient base for visitors accessing both Brundage Mountain (20 minutes north) and Tamarack Resort, while offering easy access to restaurants and local amenities. Properties within walking distance of the lake or with mountain views typically generate 15-25% higher occupancy rates and can charge $50-100 more per night compared to standard locations, making waterfront and resort-adjacent areas the most lucrative for short-term rental investments.

Airbnb properties in Donnelly, Idaho are subject to both state and local lodging taxes. Idaho imposes a 2% state sales tax on lodging accommodations, while Valley County levies an additional 3% lodging tax, bringing the total occupancy tax rate to approximately 5% on short-term rental stays. These taxes are typically collected by Airbnb directly from guests at the time of booking through their automated tax collection system, which began operating in Idaho around 2018. Airbnb then remits these taxes quarterly to the appropriate state and local tax authorities on behalf of hosts. However, some hosts may still need to register independently with the Idaho State Tax Commission and Valley County for business licensing purposes. Stays of 30 days or longer are generally exempt from lodging taxes as they are considered long-term rentals rather than transient accommodations. Property owners should verify their specific obligations with local authorities as requirements can vary based on the number of rental days per year and gross rental income thresholds.

To start an Airbnb in Donnelly, Idaho, expect total costs around $520,000-$580,000. Property purchase represents the largest expense at approximately $450,000-$500,000 based on median home prices in the area as of 2023-2024. Furnishing costs typically range $15,000-$25,000 for a complete setup including beds, linens, kitchen essentials, living room furniture, and outdoor gear appropriate for the recreational area. Initial setup costs including professional photography, listing creation, and marketing materials run $2,000-$3,000. Permits and fees vary but budget $1,500-$2,500 for business licenses, short-term rental permits, and potential HOA approvals. Insurance costs approximately $2,000-$3,000 annually for short-term rental coverage beyond standard homeowner's insurance. Utilities including electricity, gas, water, internet, and cable average $300-$400 monthly or $1,800-$2,400 for six months. First six months operating costs including cleaning services ($150-$200 per turnover), supplies, maintenance, property management software, and marketing total approximately $8,000-$12,000. Additional considerations include potential property management fees if outsourced (20-30% of revenue) and seasonal fluctuations in this mountain recreation market near Tamarack Resort and McCall.

Airbnb properties in Donnelly, Idaho demonstrate strong seasonal profitability with average nightly rates ranging from $150-300 during peak winter months (December-March) due to proximity to Brundage Mountain ski resort, while summer rates typically fall to $100-180 per night. Annual gross revenues for well-positioned properties average $35,000-55,000, with operating expenses including cleaning fees ($50-75 per turnover), property management (15-25% of revenue), utilities ($200-400 monthly), insurance ($1,500-2,500 annually), and maintenance costs averaging 8-12% of gross revenue. Net profit margins typically range from 25-40% for owner-operated properties, with successful hosts like those managing lakefront cabins near Donnelly Lake achieving occupancy rates of 65-80% annually. Key success factors include strategic location within 10 minutes of Brundage Mountain, professional photography showcasing mountain and lake views, competitive pricing during McCall Winter Carnival season, and amenities like hot tubs, game rooms, and ski equipment storage. Properties purchased in 2019-2021 for $400,000-600,000 have shown strong ROI of 8-12% annually, though recent interest rate increases and increased competition from new STR developments have compressed margins by approximately 15-20% since 2022.

Airbnb investments in Donnelly, Idaho typically generate annual ROI of 12-18% due to the area's proximity to Tamarack Resort and Brundage Mountain ski areas, with peak winter season occupancy rates reaching 75-85% and average daily rates of $180-250 for well-appointed properties. Cash-on-cash returns generally range from 8-14% annually, with higher-end cabins and homes near recreational amenities achieving the upper range, while standard properties average 10-12%. Most investors in Donnelly's short-term rental market achieve profitability within 18-24 months, particularly for properties purchased in the $400,000-600,000 range that can command premium rates during ski season (December-March) and summer recreation months (June-September). Properties within walking distance of Valley County recreational facilities or offering luxury amenities like hot tubs and mountain views typically see faster paths to profitability, often breaking even within 12-18 months due to Donnelly's growing reputation as a year-round outdoor recreation destination serving the Boise metropolitan area.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Donnelly, Idaho. Local real estate agents like those at Tamarack Resort Realty and McCall Real Estate Company have extensive knowledge of the Donnelly and Brundage Mountain area vacation rental market. Vacasa, founded in 2009, provides both property management and acquisition consulting services for Airbnb investors in mountain resort communities like Donnelly. AirDNA offers market data and analytics specifically for short-term rental investments in the McCall-Donnelly region. RedAwning and AvantStay focus on identifying and managing premium vacation rental properties in ski resort areas including central Idaho. Local services include Brundage Baye Property Management and High Country Property Services, both established in the early 2010s to serve the growing vacation rental market. National companies like Awning and Mashvisor provide investment analysis tools and property recommendations for markets like Donnelly that benefit from proximity to Brundage Mountain and Payette Lake recreational activities.