Is Edwardsville, Illinois Good for Airbnb Investment?

To start an Airbnb in Edwardsville, Illinois, begin by researching local regulations as the city requires short-term rental operators to obtain a business license and comply with zoning ordinances that typically allow rentals in residential areas with certain restrictions. Contact Edwardsville City Hall at 118 Hillsboro Avenue to obtain the necessary permits, which may include a business license ($25-50 annually), occupancy permit, and potential fire safety inspection. Find a suitable property by searching areas near Southern Illinois University Edwardsville or downtown districts, considering properties that meet the city's safety requirements including smoke detectors, carbon monoxide detectors, and proper egress windows. Furnish the space with quality basics including comfortable bedding, kitchen essentials, WiFi, and local guidebooks featuring attractions like the Cahokia Mounds or Lewis and Clark sites. List your property on Airbnb and VRBO platforms with professional photos, competitive pricing ($75-150/night depending on size and location), and detailed descriptions highlighting proximity to SIUE campus and St. Louis metro area (20 minutes away). Manage your rental by establishing check-in procedures, maintaining cleanliness standards, responding promptly to guests, and keeping detailed records for tax purposes while ensuring compliance with Illinois state tax requirements (6.25% sales tax) and any local occupancy taxes that Edwardsville may implement.

To identify profitable short-term rental properties in Edwardsville, Illinois, focus on locations within 2-3 miles of Southern Illinois University Edwardsville campus, near the historic downtown district along Main Street, and properties with easy access to Interstate 270 for St. Louis commuters. Target 2-4 bedroom homes or condos built after 1990 with modern amenities, full kitchens, dedicated parking, and outdoor spaces, as these appeal to visiting families, university guests, and business travelers. Conduct pricing analysis by researching comparable Airbnb and VRBO listings in the $80-150 per night range, accounting for seasonal fluctuations during university events and summer months. Competition research should include monitoring occupancy rates of existing STRs within a 5-mile radius, particularly around Glen Carbon and the Goshen Road corridor, while identifying gaps in luxury or pet-friendly accommodations. Utilize tools like AirDNA for market analytics, Mashvisor for investment analysis, and local resources including the Edwardsville Chamber of Commerce for event calendars, Madison County property records for purchase comparables, and SIUE's academic calendar to understand peak demand periods that can drive rates 20-40% higher than baseline pricing.

To obtain an Airbnb/STR permit in Edwardsville, Illinois, you must first contact the City of Edwardsville Planning and Development Department at City Hall located at 118 Hillsboro Avenue to determine current zoning compliance and submit a Special Use Permit application if operating in residential zones. Required documents typically include a completed application form, property deed or lease agreement, floor plans, parking plan, contact information for a local property manager if you're non-resident, proof of insurance with minimum $1 million liability coverage, and a safety inspection certificate showing working smoke detectors, carbon monoxide detectors, and fire extinguishers. The application fee is estimated at $200-400 plus potential inspection fees of $50-100. You must also register for a business license through the City Clerk's office for approximately $25-50 annually and obtain an Illinois Department of Revenue sales tax permit. The timeline typically takes 4-6 weeks including a public hearing before the Planning Commission and potential City Council approval. Edwardsville-specific requirements likely include maximum occupancy limits based on bedrooms, designated parking spaces, quiet hours enforcement between 10 PM and 7 AM, and maintaining a local contact person available 24/7 for neighbor complaints, with properties potentially limited to owner-occupied or adjacent owner-supervised operations in certain residential districts.

Short-term rentals (STRs) in Edwardsville, Illinois are generally legal but subject to local regulations and zoning restrictions. The city requires STR operators to obtain proper business licenses and comply with zoning ordinances, which typically limit short-term rentals to certain residential districts while prohibiting them in areas zoned for single-family residential use only. Properties must meet safety requirements including smoke detectors, carbon monoxide detectors, and fire extinguishers, and operators are required to maintain liability insurance. The city has implemented occupancy limits based on property size and requires designated parking spaces for guests. Recent changes around 2022-2023 have included stricter enforcement of noise ordinances and neighbor complaint procedures, with the city requiring STR operators to provide 24-hour contact information for addressing issues. Some neighborhoods near Southern Illinois University Edwardsville have additional restrictions due to concerns about student housing conversions, and the city maintains the right to revoke permits for properties with repeated violations or complaints.

The best areas for Airbnb investment in Edwardsville, Illinois include the Historic Downtown District near Main Street, which attracts visitors to local shops, restaurants, and cultural events, plus offers proximity to the Edwardsville Arts Center and seasonal festivals. The area near Southern Illinois University Edwardsville (SIUE) campus is highly attractive for parent visits, graduation weekends, university events, and academic conferences, providing consistent year-round demand. The Watershed Nature Center vicinity appeals to outdoor enthusiasts and families visiting for recreational activities, hiking, and educational programs. Properties near the Edwardsville Sports Complex and YMCA benefit from youth sports tournaments, swim meets, and athletic events that bring traveling families. The residential areas around Plum Street and Vandalia Street offer quiet, family-friendly accommodations for visitors attending weddings at local venues like Leclaire Park or the N.O. Nelson Campus. Additionally, locations with easy access to Interstate 55 and Highway 159 are valuable for business travelers commuting to St. Louis (approximately 20 minutes away) who prefer more affordable and spacious accommodations outside the city, as well as visitors to nearby attractions like the Lewis and Clark State Historic Site and Cahokia Mounds.

Airbnb properties in Edwardsville, Illinois are subject to multiple tax obligations including the Illinois Hotel Operators' Occupation Tax at 6% of gross rental receipts, which is collected by the state and remitted monthly by hosts earning over $2,000 annually. Madison County imposes a 3% lodging tax on short-term rentals under 30 days, collected directly from guests and remitted quarterly by property owners to the Madison County Treasurer's office. The City of Edwardsville levies a 2% municipal occupancy tax on all transient accommodations, with hosts required to register with the city clerk's office and file monthly returns by the 20th of the following month. Additionally, standard Illinois sales tax of 6.25% plus local sales taxes totaling approximately 2.75% apply to the rental charges, bringing the combined tax rate to roughly 20% of gross rental income. Exemptions typically include rentals exceeding 30 consecutive days, properties rented to permanent residents, and accommodations provided to certain government employees or during declared emergencies, though hosts must maintain proper documentation and file exemption certificates with the respective tax authorities.

The total cost to start an Airbnb in Edwardsville, Illinois is approximately $285,000-$320,000. Property purchase costs around $220,000-$250,000 based on median home prices in the area as of 2023-2024. Furnishing a 2-3 bedroom property typically runs $15,000-$25,000 including furniture, bedding, kitchenware, and decor from retailers like IKEA, Wayfair, and local stores. Initial setup costs including professional photography, listing creation, and marketing materials total $1,500-$2,500. Permits and fees vary but generally include business license ($100-$300), short-term rental permit if required ($200-$500), and potential HOA approval fees. Insurance specifically for short-term rentals costs $1,200-$2,000 annually through companies like Proper Insurance or CBIZ. Utility setup and deposits for electricity, gas, water, internet, and cable run $500-$800 initially. First six months operating costs including utilities ($1,800), cleaning services ($2,400), maintenance ($1,000), property management software ($300), and marketing ($600) total approximately $6,100. Additional considerations include potential property improvements ($5,000-$10,000) and working capital for unexpected expenses ($5,000-$10,000).

Airbnb properties in Edwardsville, Illinois typically generate annual revenues between $15,000-$35,000 for entire homes and $8,000-$18,000 for private rooms, with average daily rates ranging from $75-$120 depending on property size and amenities. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($25-$40 per turnover), utilities ($150-$250 monthly), property management (10-20% of revenue), insurance ($800-$1,200 annually), and maintenance costs ($2,000-$4,000 yearly). Properties near Southern Illinois University Edwardsville campus and downtown areas achieve higher occupancy rates of 65-75% compared to suburban locations at 45-55%, with successful hosts reporting net profit margins of 25-40% after all expenses. Key success factors include proximity to SIUE campus for consistent student and visitor demand, professional photography, competitive pricing during university events and graduation periods, and maintaining 4.8+ star ratings through excellent guest communication and property upkeep. A typical 3-bedroom home purchased for $180,000 and generating $28,000 annually with $16,000 in expenses would yield approximately $12,000 net profit, representing a 6.7% return on investment before mortgage considerations, making Edwardsville a moderately profitable market for Airbnb investments when managed effectively.

Based on Edwardsville, Illinois market conditions, Airbnb investments typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% depending on property type and location within the city. Properties near Southern Illinois University Edwardsville command higher rates during academic periods, with furnished 2-3 bedroom homes averaging $85-120 per night and achieving 60-75% occupancy rates annually. Initial profitability usually occurs within 18-24 months after accounting for furnishing costs, marketing expenses, and property management fees of approximately 15-20% of gross revenue. Properties in historic downtown Edwardsville or within 3 miles of SIUE campus show stronger performance, with some investors reporting cash-on-cash returns up to 12-15% by year two, while properties requiring significant renovations may see break-even points extending to 30-36 months with lower initial returns of 4-7% until market positioning is optimized.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Edwardsville, Illinois. Local real estate agents specializing in investment properties include Coldwell Banker Brown Realtors, RE/MAX Professionals, and Berkshire Hathaway HomeServices, with agents like those at Edwardsville Realty Group focusing on rental property investments since 2018. National services include Mashvisor for property analysis, AirDNA for market data, and Awning for turnkey Airbnb investments, while companies like RedAwning and Vacasa offer property management services for short-term rentals. Local property management companies such as Gateway Property Management and Metro East Property Services have expanded into Airbnb management since 2019, and investment-focused firms like BiggerPockets-affiliated agents and HostGPO provide purchasing guidance and operational support for vacation rental properties in the greater St. Louis metropolitan area including Edwardsville.