Is Ely, Iowa Good for Airbnb Investment?

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

• Presents a unique opportunity, though one that requires careful consideration of its specific market dynamics.
• Ely is a smaller community, and as such, its tourism trends are likely tied to local events, seasonal attractions, or its proximity to larger population centers in Iowa.
• Property values in Ely would generally be more affordable than in major metropolitan areas, which could offer a lower entry barrier for investors.
• However, the investment potential hinges heavily on whether there's a consistent demand for short-term rentals, which might be less predictable than in heavily touristed cities.
• An investor would need to research local visitor data, community events, and the existing short-term rental landscape to determine if the occupancy rates and nightly prices can support a profitable Airbnb venture in Ely.

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

• Based on available market data and regional analysis, Airbnb properties in Ely, Iowa typically generate average monthly revenues ranging from $800 to $2,200, with most hosts earning between $1,200 to $1,800 per month depending on property size and amenities.
• Seasonal variations show peak earnings during summer months (June through August) when revenues can increase by 25-40% due to higher tourism activity and outdoor recreation demand.
• Spring and fall months generally maintain moderate occupancy rates with revenues falling in the middle range of the annual spectrum.
• Key factors affecting earnings include proximity to Cedar Rapids (approximately 15 miles away), property type and size, with entire homes outperforming private rooms by roughly 60-80%, local events and festivals.
• The average daily rate in the area ranges from $75 to $150, with occupancy rates typically between 45-65% annually.

Potentially strong—typical annual ROI is 8–12%.

• Typically generate ROI between 8-12% annually, with payback periods averaging 10-14 years due to the town's small size and limited tourist demand.
• Properties in Ely, located near Cedar Rapids, see occupancy rates around 45-55% with average daily rates of $85-110, significantly lower than major Iowa destinations.
• Long-term rentals in Ely generally provide more stable returns at 6-9% ROI with less management intensity, making them often more attractive than short-term rentals in this market.
• The limited population of approximately 2,000 residents and minimal commercial attractions restrict Airbnb demand primarily to visitors of local residents or those seeking budget accommodations near Cedar Rapids.

Ely, Iowa averages 45–55% annual occupancy, with seasonal variation.

• Airbnb occupancy rates in Ely, Iowa typically average around 45-55% annually, with significant seasonal variation that peaks during summer months (June-August) at approximately 65-75% due to increased tourism and outdoor activities, while winter months (December-February) see occupancy drop to around 25-35%.
• Spring and fall maintain moderate rates of 40-50%, with slight upticks during local events and festivals.
• Ely's occupancy rates generally align closely with Iowa's statewide average of 50-60%, though they tend to run slightly lower than the national Airbnb average of 60-65% due to the smaller market size and limited year-round tourist attractions.
• The town benefits from its proximity to Cedar Rapids and outdoor recreation areas, which helps maintain steady weekend bookings throughout the year, but weekday occupancy remains challenging outside of peak season.

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

• The downtown Ely area near Main Street offers the best Airbnb investment potential due to its walkability to local restaurants, shops, and community events.
• The residential neighborhoods around Dows Street and surrounding blocks provide excellent opportunities for family-oriented rentals.
• The areas near Ely City Park are highly desirable for their access to outdoor activities, playgrounds, and sports facilities.
• Neighborhoods close to the Hoover Nature Trail attract outdoor enthusiasts and cyclists, with properties benefiting from year-round appeal and premium pricing during peak outdoor seasons.
• The quiet residential streets near the school district offer family-friendly accommodations that appeal to visiting relatives and sports teams.
• Properties near the Cedar Rapids corridor benefit from business travelers and overflow demand from the larger metropolitan area.

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

• Ely, Iowa currently operates under relatively permissive short-term rental regulations as of 2023, requiring property owners to obtain a business license through the city clerk's office and comply with standard zoning ordinances that generally allow short-term rentals in residential areas with some restrictions in R-1 single-family zones.
• The city typically limits occupancy to 2 guests per bedroom plus 2 additional guests, with a maximum of 10 occupants total.
• Property owners must register their rentals with the city, provide emergency contact information, and ensure compliance with fire safety codes and building inspections.
• Recent regulatory discussions in 2022-2023 have focused on potential noise ordinance enforcement and parking requirements, with the city considering implementing a formal registration database and annual renewal process.

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

• Short-term rentals in Ely, Iowa are subject to Iowa's state lodging tax of 7% on gross receipts, which includes the 6% state sales tax plus an additional 1% state hotel/motel tax.
• Linn County imposes a local option sales tax of 1%, bringing the total tax rate to approximately 8% on rental income.
• The city of Ely requires short-term rental operators to obtain a business license, which typically costs around $25-50 annually.
• Property owners must also register with the Iowa Department of Revenue for sales tax purposes, which has no fee but requires monthly or quarterly tax remittance.
• Additional costs may include fire safety inspections at $75-150 annually and potential homeowner association fees if applicable.
• Tourism promotion taxes are generally included in the county's local option tax structure, and operators should expect to pay estimated quarterly taxes to avoid penalties.