Is Downers Grove, Illinois Good for Airbnb Investment?

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Downers Grove, Illinois Airbnb Investment Overview

Is Airbnb a Good Investment in Downers Grove, Illinois?

Investing in Airbnb properties in Downers Grove, Illinois, presents a nuanced opportunity. While it's a stable suburban community with strong residential appeal, it does not typically attract the same high volume of short-term tourists as major metropolitan or vacation destinations. Current market conditions indicate solid property values, but the growth rate might be more modest compared to high-demand urban centers. Tourism trends are largely driven by visitors attending local events, visiting family, or business travelers seeking an alternative to hotels, rather than a robust leisure tourism sector. Therefore, while property values offer a stable long-term investment, the short-term rental investment potential depends heavily on targeting specific niches, such as corporate housing or extended family stays, and thoroughly understanding local regulations which may vary from broader Illinois state laws.

How Much Does an Average Airbnb Earn in Downers Grove?

Based on available market data and rental analytics, Airbnb hosts in Downers Grove, Illinois typically earn between $1,200 to $2,800 per month, with average monthly revenues around $1,800 for a standard two-bedroom property. Seasonal variations show peak earnings during summer months (June through August) when revenues can increase by 25-35% due to higher tourism and business travel, while winter months typically see a 15-20% decrease in bookings and rates. Spring and fall maintain moderate occupancy levels with revenues hovering near the annual average. Key factors affecting earnings include proximity to downtown Chicago (approximately 22 miles), property size and amenities, with larger homes commanding $150-250 per night compared to $85-140 for smaller units. The presence of nearby corporate facilities, Midway Airport accessibility, and local events significantly impact demand, while properties offering parking, modern amenities, and professional photography typically achieve 20-30% higher occupancy rates. Market saturation levels remain moderate compared to Chicago proper, allowing for competitive pricing strategies, though hosts must factor in cleaning fees, property management costs, and local tax obligations which can reduce net earnings by 25-35%.

Airbnb Return on Investment in Downers Grove

Airbnb investments in Downers Grove, Illinois typically generate ROI between 8-12% annually, with higher-end properties near the downtown area and train stations achieving returns closer to 15% due to business traveler demand and proximity to Chicago. The average payback period ranges from 7-10 years, depending on initial investment and property management efficiency. Compared to traditional long-term rentals in Downers Grove which average 6-8% ROI, short-term rentals can outperform by 2-4 percentage points, though they require significantly more active management and carry higher vacancy risks during off-peak seasons. Properties within walking distance of the Metra station command premium nightly rates of $120-180, while suburban homes average $80-120 per night, with occupancy rates typically ranging from 60-75% annually, factoring in seasonal fluctuations and competition from nearby markets like Naperville and Oak Brook.

Average Airbnb Occupancy Rate in Downers Grove

Airbnb occupancy rates in Downers Grove, Illinois typically average around 65-70% annually, with significant seasonal variations that peak during summer months (June-August) at approximately 75-80% occupancy due to favorable weather and increased travel activity, while winter months (December-February) see lower rates around 55-60%. Spring and fall maintain moderate occupancy levels of 65-70%, with slight upticks during local events and business travel periods. Peak seasons align with summer vacation periods, major Chicago-area events, and business conference seasons, while the lowest occupancy occurs during winter months and post-holiday periods in January-February. Compared to Illinois state averages of approximately 60-65%, Downers Grove performs slightly better due to its proximity to Chicago and O'Hare Airport, attracting both leisure and business travelers, though it falls somewhat below national Airbnb averages of 70-75% that are bolstered by major tourist destinations and coastal markets.

Best Neighborhoods for Airbnb in Downers Grove

The downtown Downers Grove area near the Metra station offers excellent Airbnb potential due to its direct rail access to Chicago, walkable Main Street with restaurants and shops, and appeal to business travelers seeking suburban alternatives to downtown hotels. The Belmont Prairie neighborhood attracts families and longer-stay guests with its newer construction, proximity to top-rated schools, and quiet residential feel while maintaining easy highway access. Areas near Downers Grove North and South High Schools perform well during graduation seasons, sports tournaments, and family visits, benefiting from the strong reputation of these institutions. The neighborhoods surrounding Lyman Woods and Maple Grove Forest Preserve appeal to nature-loving guests and families, offering hiking trails and outdoor activities while remaining close to suburban amenities. Properties near Yorktown Center provide convenience for shopping-focused visitors and business travelers, with the mall serving as a regional destination and the area offering numerous dining options. The historic Blodgett neighborhood features charming older homes that photograph well for listings and attract guests seeking authentic suburban character, while benefiting from tree-lined streets and proximity to downtown. Finally, areas near the Esplanade and Highland Avenue corridor offer upscale accommodations for corporate visitors and families, with newer developments, professional demographics, and higher pricing power due to the affluent surrounding community.

Short-term Rental Regulations in Downers Grove

Downers Grove, Illinois requires short-term rental operators to obtain a business license and register their properties with the village, with permits typically costing between $100-200 annually and requiring property inspections for safety compliance. The village limits occupancy to two guests per bedroom plus two additional guests, with a maximum of 10 occupants total, and requires that rentals operate only in residential zones where such use is permitted as a home occupation. Owner-occupancy is generally required for short-term rentals operating as home-based businesses, meaning the property must serve as the owner's primary residence, though some exceptions may apply for properties in specific zoning districts. The registration process involves submitting an application with property details, proof of insurance, emergency contact information, and payment of applicable fees, followed by a mandatory safety inspection covering smoke detectors, carbon monoxide detectors, and egress requirements. Recent regulatory changes have included stricter enforcement of noise ordinances, requirements for 24-hour local contact availability, enhanced parking regulations to prevent neighborhood disruption, and increased penalties for violations including potential license revocation for repeat offenders, with the village also implementing a complaint tracking system and regular compliance monitoring to address community concerns about short-term rental impacts on residential neighborhoods.

Short-term Rental Fees and Taxes in Downers Grove

Short-term rentals in Downers Grove, Illinois are subject to several fees and taxes including the state lodging tax of 6% on rental amounts, DuPage County's hotel/motel tax of approximately 3%, and the village's local accommodation tax estimated at 2-4%. Property owners must obtain a short-term rental license with an estimated annual fee of $150-300, plus an initial registration fee of approximately $75-150. Additional requirements include a business license costing around $50-100 annually, and compliance with fire safety inspections which typically cost $100-200 per inspection. Sales tax of 6.25% applies to rental income, and owners may face additional administrative fees for permit processing of $25-50. Some properties may require special use permits with fees ranging from $200-500 depending on zoning requirements, and there may be annual renewal fees for various permits totaling approximately $100-250 per year.

Is Airbnb a Good Investment in Downers Grove, Illinois?

Investing in Airbnb properties in Downers Grove, Illinois, presents a nuanced opportunity. While it's a stable suburban community with strong residential appeal, it does not typically attract the same high volume of short-term tourists as major metropolitan or vacation destinations. Current market conditions indicate solid property values, but the growth rate might be more modest compared to high-demand urban centers. Tourism trends are largely driven by visitors attending local events, visiting family, or business travelers seeking an alternative to hotels, rather than a robust leisure tourism sector. Therefore, while property values offer a stable long-term investment, the short-term rental investment potential depends heavily on targeting specific niches, such as corporate housing or extended family stays, and thoroughly understanding local regulations which may vary from broader Illinois state laws.

How Much Does an Average Airbnb Earn in Downers Grove?

Based on available market data and rental analytics, Airbnb hosts in Downers Grove, Illinois typically earn between $1,200 to $2,800 per month, with average monthly revenues around $1,800 for a standard two-bedroom property. Seasonal variations show peak earnings during summer months (June through August) when revenues can increase by 25-35% due to higher tourism and business travel, while winter months typically see a 15-20% decrease in bookings and rates. Spring and fall maintain moderate occupancy levels with revenues hovering near the annual average. Key factors affecting earnings include proximity to downtown Chicago (approximately 22 miles), property size and amenities, with larger homes commanding $150-250 per night compared to $85-140 for smaller units. The presence of nearby corporate facilities, Midway Airport accessibility, and local events significantly impact demand, while properties offering parking, modern amenities, and professional photography typically achieve 20-30% higher occupancy rates. Market saturation levels remain moderate compared to Chicago proper, allowing for competitive pricing strategies, though hosts must factor in cleaning fees, property management costs, and local tax obligations which can reduce net earnings by 25-35%.

Airbnb Return on Investment in Downers Grove

Airbnb investments in Downers Grove, Illinois typically generate ROI between 8-12% annually, with higher-end properties near the downtown area and train stations achieving returns closer to 15% due to business traveler demand and proximity to Chicago. The average payback period ranges from 7-10 years, depending on initial investment and property management efficiency. Compared to traditional long-term rentals in Downers Grove which average 6-8% ROI, short-term rentals can outperform by 2-4 percentage points, though they require significantly more active management and carry higher vacancy risks during off-peak seasons. Properties within walking distance of the Metra station command premium nightly rates of $120-180, while suburban homes average $80-120 per night, with occupancy rates typically ranging from 60-75% annually, factoring in seasonal fluctuations and competition from nearby markets like Naperville and Oak Brook.

Average Airbnb Occupancy Rate in Downers Grove

Airbnb occupancy rates in Downers Grove, Illinois typically average around 65-70% annually, with significant seasonal variations that peak during summer months (June-August) at approximately 75-80% occupancy due to favorable weather and increased travel activity, while winter months (December-February) see lower rates around 55-60%. Spring and fall maintain moderate occupancy levels of 65-70%, with slight upticks during local events and business travel periods. Peak seasons align with summer vacation periods, major Chicago-area events, and business conference seasons, while the lowest occupancy occurs during winter months and post-holiday periods in January-February. Compared to Illinois state averages of approximately 60-65%, Downers Grove performs slightly better due to its proximity to Chicago and O'Hare Airport, attracting both leisure and business travelers, though it falls somewhat below national Airbnb averages of 70-75% that are bolstered by major tourist destinations and coastal markets.

Best Neighborhoods for Airbnb in Downers Grove

The downtown Downers Grove area near the Metra station offers excellent Airbnb potential due to its direct rail access to Chicago, walkable Main Street with restaurants and shops, and appeal to business travelers seeking suburban alternatives to downtown hotels. The Belmont Prairie neighborhood attracts families and longer-stay guests with its newer construction, proximity to top-rated schools, and quiet residential feel while maintaining easy highway access. Areas near Downers Grove North and South High Schools perform well during graduation seasons, sports tournaments, and family visits, benefiting from the strong reputation of these institutions. The neighborhoods surrounding Lyman Woods and Maple Grove Forest Preserve appeal to nature-loving guests and families, offering hiking trails and outdoor activities while remaining close to suburban amenities. Properties near Yorktown Center provide convenience for shopping-focused visitors and business travelers, with the mall serving as a regional destination and the area offering numerous dining options. The historic Blodgett neighborhood features charming older homes that photograph well for listings and attract guests seeking authentic suburban character, while benefiting from tree-lined streets and proximity to downtown. Finally, areas near the Esplanade and Highland Avenue corridor offer upscale accommodations for corporate visitors and families, with newer developments, professional demographics, and higher pricing power due to the affluent surrounding community.

Short-term Rental Regulations in Downers Grove

Downers Grove, Illinois requires short-term rental operators to obtain a business license and register their properties with the village, with permits typically costing between $100-200 annually and requiring property inspections for safety compliance. The village limits occupancy to two guests per bedroom plus two additional guests, with a maximum of 10 occupants total, and requires that rentals operate only in residential zones where such use is permitted as a home occupation. Owner-occupancy is generally required for short-term rentals operating as home-based businesses, meaning the property must serve as the owner's primary residence, though some exceptions may apply for properties in specific zoning districts. The registration process involves submitting an application with property details, proof of insurance, emergency contact information, and payment of applicable fees, followed by a mandatory safety inspection covering smoke detectors, carbon monoxide detectors, and egress requirements. Recent regulatory changes have included stricter enforcement of noise ordinances, requirements for 24-hour local contact availability, enhanced parking regulations to prevent neighborhood disruption, and increased penalties for violations including potential license revocation for repeat offenders, with the village also implementing a complaint tracking system and regular compliance monitoring to address community concerns about short-term rental impacts on residential neighborhoods.

Short-term Rental Fees and Taxes in Downers Grove

Short-term rentals in Downers Grove, Illinois are subject to several fees and taxes including the state lodging tax of 6% on rental amounts, DuPage County's hotel/motel tax of approximately 3%, and the village's local accommodation tax estimated at 2-4%. Property owners must obtain a short-term rental license with an estimated annual fee of $150-300, plus an initial registration fee of approximately $75-150. Additional requirements include a business license costing around $50-100 annually, and compliance with fire safety inspections which typically cost $100-200 per inspection. Sales tax of 6.25% applies to rental income, and owners may face additional administrative fees for permit processing of $25-50. Some properties may require special use permits with fees ranging from $200-500 depending on zoning requirements, and there may be annual renewal fees for various permits totaling approximately $100-250 per year.

* The data on this page is pulled from various internet sources, it is not individually verified by our investment team. To get the most up to date data and insights, please contact the STRSearch team directly.

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Everything Smart Investors Ask About STR Wealth Building

How to start an Airbnb in Downers Grove, Illinois?

To start an Airbnb in Downers Grove, Illinois, begin by researching local regulations as the village requires short-term rental operators to obtain a business license and comply with zoning ordinances that typically restrict rentals to no more than 30 days and require owner occupancy or special permits for non-owner occupied properties. Contact the Downers Grove Planning Department at 801 Burlington Avenue to verify current requirements and obtain necessary permits, which may include a home occupation permit ($50-100) and annual business license ($25-75). Find a suitable property in residential zones that allow short-term rentals, ensuring it meets safety codes including smoke detectors, carbon monoxide detectors, and proper egress windows. Furnish the space with quality furniture, linens, kitchen essentials, and amenities like WiFi, focusing on a clean, modern aesthetic that appeals to business travelers visiting nearby corporate offices or families visiting Argonne National Laboratory. Create your Airbnb listing with professional photos, competitive pricing ($80-150/night based on local market rates), and detailed descriptions highlighting proximity to downtown Chicago (30 minutes by train), local attractions like the Tivoli Theatre, and nearby restaurants. Manage your property by establishing check-in procedures, maintaining cleanliness standards, responding promptly to guest inquiries, and ensuring compliance with the village's noise ordinances and parking requirements, while keeping detailed records for tax purposes and annual license renewals.

What's the best way to identify good STR properties in Downers Grove, Illinois?

To identify profitable short-term rental properties in Downers Grove, Illinois, focus on locations within walking distance of the Metra BNSF Railway line for easy Chicago access, near downtown Downers Grove's shopping and dining district, or close to Morton Arboretum which attracts year-round visitors. Target 2-4 bedroom single-family homes or condos built after 1980 with modern amenities, parking, and outdoor space, as these appeal to business travelers and families visiting the area. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against comparable properties, aiming for $100-200 per night depending on size and amenities, while analyzing seasonal demand patterns driven by corporate travel and summer tourism. Research competition by studying existing Airbnb and VRBO listings within a 2-mile radius, identifying gaps in amenities or pricing, and monitor occupancy rates of similar properties using tools like AllTheRooms or STR analytics platforms. Leverage local resources including the Downers Grove Economic Development Corporation for market insights, connect with local real estate agents familiar with investment properties, and utilize the village's zoning maps to ensure STR compliance, while considering proximity to major employers like Advocate Health Care and the accessibility to both O'Hare and Midway airports via public transportation.

How to get an Airbnb permit in Downers Grove, Illinois?

To obtain an Airbnb/STR permit in Downers Grove, Illinois, you must first contact the Village of Downers Grove Community Development Department at 801 Burlington Avenue or call (630) 434-5515, as short-term rentals require a special use permit and business license. Required documents typically include a completed special use permit application, site plan showing the property layout, proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental unit, parking plan demonstrating adequate off-street parking, and a management plan detailing how the property will be operated and maintained. The application fee is approximately $500-800 for the special use permit plus $100-200 for the business license, with additional fees for public hearing notices estimated at $200-300. The timeline generally takes 60-90 days as applications must go through staff review, Planning and Zoning Commission review, and Village Council approval through public hearings. Specific Downers Grove requirements include maintaining the property as owner-occupied (owner must live on-site), limiting rentals to no more than 30 consecutive days, providing adequate off-street parking for guests, ensuring compliance with all building and fire codes, maintaining a local contact person available 24/7 for issues, and adhering to noise ordinances and occupancy limits based on the property size and zoning district.

Is it legal to operate a short-term rental in Downers Grove, Illinois?

Short-term rentals (STRs) are currently prohibited in Downers Grove, Illinois. The village has maintained a ban on STRs in residential areas since approximately 2018-2019, when many Chicago suburbs began implementing restrictions in response to growing concerns about neighborhood disruption and housing availability. Downers Grove's municipal code specifically prohibits the use of residential properties for transient lodging or short-term rental purposes, with violations subject to fines and enforcement action. The ban applies to all residential zoning districts within the village, effectively preventing platforms like Airbnb and VRBO from operating legally in residential neighborhoods. Unlike some neighboring communities that have created regulatory frameworks with licensing and restrictions, Downers Grove has maintained its prohibition stance, citing concerns about parking, noise, safety, and the preservation of residential neighborhood character. Property owners caught operating illegal STRs face code violations and potential legal action from the village.

What are the best places to invest in Airbnb in Downers Grove, Illinois?

The most promising Airbnb investment areas in Downers Grove, Illinois include the downtown Main Street district, which attracts visitors due to its proximity to the Metra BNSF Railway line providing direct access to Chicago, local festivals like the Grove Fest, and walkable dining and shopping options. The Belmont Road corridor near the Downers Grove Golf Club offers appeal for golf tourism and business travelers attending corporate events at nearby venues. Areas near Argonne National Laboratory (approximately 10 minutes away) present strong potential for extended-stay business travelers and researchers visiting the facility. The neighborhoods surrounding Tivoli Theatre benefit from cultural tourism and visitors attending performances and community events. Properties near the Morton Arboretum (adjacent to Downers Grove) capitalize on nature tourism, wedding guests, and seasonal visitors exploring the 1,700-acre outdoor museum, while areas close to Advocate Good Samaritan Hospital attract medical tourists and families of patients requiring extended stays.

Airbnb and lodging taxes in Downers Grove, Illinois

In Downers Grove, Illinois, Airbnb hosts are subject to multiple lodging taxes including the Illinois Hotel Operators' Occupation Tax at 6% of gross rental receipts, DuPage County's hotel/motel tax at approximately 3%, and Downers Grove's local hotel tax at an estimated 3-4%, resulting in a combined tax rate of roughly 12-13% on short-term rental income. The Illinois state tax is collected by the Illinois Department of Revenue with monthly remittance required for operators with over $20,000 in annual receipts, while smaller operators may file quarterly. County and municipal taxes are typically collected by their respective tax departments, with DuPage County requiring registration and monthly filing by the 20th of the following month. Airbnb may collect and remit some of these taxes automatically through their platform agreements with certain jurisdictions, but hosts remain ultimately responsible for compliance. Exemptions generally apply to stays exceeding 30 consecutive days, rentals to permanent residents, and certain government or charitable organization bookings, though hosts must maintain proper documentation to claim these exemptions and should verify current rates and procedures with the Illinois Department of Revenue, DuPage County, and Downers Grove municipal offices as tax rates and collection methods can change.

Total cost to purchase, furnish and operate an Airbnb in Downers Grove, Illinois

Starting an Airbnb in Downers Grove, Illinois requires approximately $450,000-$550,000 in total initial investment. Property purchase costs average $425,000 based on median home prices in the area as of 2023. Furnishing a 2-3 bedroom property typically runs $15,000-$25,000 including furniture, appliances, linens, and decor to create an attractive rental space. Initial setup costs including professional photography, listing creation, and basic marketing materials total around $2,000-$3,000. Permits and fees in DuPage County include business license ($100-$200), short-term rental permit ($300-$500), and potential HOA approval fees ($200-$500). Insurance for short-term rentals costs approximately $2,000-$3,500 annually, with the first year paid upfront. Utility setup and deposits for electricity, gas, water, internet, and cable average $500-$800 initially. First six months of operating costs including utilities ($1,200), cleaning services ($2,400), maintenance reserves ($1,500), platform fees ($1,800 assuming 15% occupancy revenue), and miscellaneous supplies ($800) total approximately $7,700. Property taxes and mortgage payments would add significantly to ongoing costs but vary based on financing terms and down payment amount.

Are Airbnb properties in Downers Grove, Illinois profitable?

Airbnb properties in Downers Grove, Illinois typically generate annual revenues between $18,000-$35,000 for entire homes and $8,000-$15,000 for private rooms, with average daily rates ranging from $85-$140 depending on property size and amenities. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($40-$80 per turnover), property management (10-20% of revenue), utilities ($150-$300 monthly), insurance ($800-$1,500 annually), and maintenance costs averaging $2,000-$4,000 yearly. Net profit margins typically range from 15-35% for well-managed properties, with successful hosts in the area reporting annual profits of $8,000-$18,000 per property. Key success factors include proximity to Argonne National Laboratory and corporate housing demand, maintaining 4.8+ star ratings, offering amenities like high-speed internet and parking, and achieving 65-80% occupancy rates. Properties within walking distance of the Metra station and downtown area command premium rates, with some hosts reporting 25-30% higher revenues than suburban locations. The market benefits from consistent business travel demand and weekend leisure guests visiting the Chicago suburbs, though profitability heavily depends on property acquisition costs and financing terms, with break-even typically occurring when monthly mortgage payments don't exceed 60% of gross rental income.

What is the expected return on investment for an Airbnb in Downers Grove, Illinois?

Airbnb investments in Downers Grove, Illinois typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% based on current market conditions. Properties in this Chicago suburb, particularly those near the Metra station and downtown area, can achieve profitability within 18-24 months due to steady demand from business travelers visiting nearby corporate offices and families attending events at local venues. The average daily rate ranges from $85-120 depending on property size and amenities, with occupancy rates averaging 65-75% annually. Initial investment costs including property acquisition, furnishing, and setup typically range from $180,000-280,000 for a 2-3 bedroom property, generating monthly gross revenues of $2,800-4,200. After accounting for expenses including cleaning, utilities, property management, and maintenance costs averaging 35-45% of gross revenue, net annual returns consistently fall within the 8-12% range, making Downers Grove a moderately attractive market for Airbnb investment compared to higher-performing Chicago neighborhoods.

What company can help me find and buy a profitable Airbnb in Downers Grove, Illinois?

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for investors in Downers Grove, Illinois. Local real estate agents like Coldwell Banker Realty and RE/MAX Suburban have agents experienced in investment properties who understand the Downers Grove market dynamics and zoning regulations for short-term rentals. National services include Mashvisor, which provides data analytics for Airbnb investment properties, and BiggerPockets, which connects investors with local market experts in the Chicago suburbs. RedAwning offers property management and investment consulting services for short-term rentals in the area, while AirDNA provides market data and revenue projections specific to Downers Grove. Local property management companies like Awning and HostGPO can help investors manage their Airbnb properties once purchased. Roofstock and Arrived Homes are national platforms that occasionally feature investment properties in the Chicago metropolitan area including Downers Grove. Additionally, local investment groups and meetups through BiggerPockets Chicago chapter can connect investors with agents and service providers who specialize in short-term rental investments in DuPage County.

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