Is Embarrass, Minnesota Good for Airbnb Investment?

To start an Airbnb in Embarrass, Minnesota, begin by researching St. Louis County zoning regulations and contacting the county planning department to confirm short-term rental allowances in your specific area, as Embarrass falls under county jurisdiction rather than having its own municipal regulations. Obtain necessary permits including a business license from St. Louis County (approximately $50-100), ensure compliance with Minnesota Department of Health lodging regulations, and verify fire safety requirements with local fire marshal services. Find a suitable property by searching rural listings in the Embarrass area, focusing on cabins or homes near outdoor attractions like the Mesabi Trail or Superior National Forest, with properties typically ranging $150,000-400,000. Furnish the space with rustic, Minnesota-themed decor emphasizing outdoor recreation, including quality bedding, kitchen essentials, Wi-Fi, and outdoor equipment like snowshoes or fishing gear to attract tourists visiting the Iron Range region. List your property on Airbnb, VRBO, and other platforms with professional photos highlighting the natural surroundings, Northern Minnesota charm, and proximity to Duluth (45 minutes) and Ely (30 minutes), setting competitive rates around $80-150 per night depending on season and amenities. Manage the property by establishing cleaning protocols between guests, maintaining 24/7 communication availability, coordinating with local cleaning services in nearby Virginia or Ely, and ensuring winter accessibility given Embarrass's harsh climate and remote location in northeastern Minnesota's Arrowhead region.

To identify profitable short-term rental properties in Embarrass, Minnesota, focus on location criteria near the Superior National Forest, Lake Vermilion, and snowmobile trail access points, as this small unincorporated community attracts outdoor enthusiasts year-round. Target properties with 2-4 bedrooms, waterfront or forest views, outdoor amenities like fire pits, docks, or hot tubs, and ensure reliable internet for remote workers seeking nature retreats. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against similar properties in nearby Ely and Tower, aiming for $150-300 per night depending on size and amenities, with peak seasons during summer fishing months and winter snowmobiling. Research competition by analyzing existing STRs within a 15-mile radius on Airbnb and VRBO, noting occupancy rates, guest reviews, and pricing strategies of successful properties. Utilize tools like Rabbu for market analysis, STR Helper for performance tracking, and connect with local real estate agents familiar with the Iron Range region, while monitoring seasonal tourism patterns through Explore Minnesota Tourism data and considering properties that can capture both summer lake activities and winter recreation traffic from the Arrowhead Snowmobile Trail system.

To obtain an Airbnb/STR permit in Embarrass, Minnesota, you'll need to contact the St. Louis County Planning and Zoning Department since Embarrass is an unincorporated community within St. Louis County. Start by calling the county office at (218) 726-2455 or visiting their office in Duluth to inquire about short-term rental regulations and permit requirements. You'll likely need to submit a conditional use permit application, provide property ownership documentation, a site plan showing the rental property layout, proof of adequate septic and water systems, evidence of compliance with building codes, and liability insurance documentation with minimum coverage of $1 million. The application fee typically ranges from $200-500, with additional inspection fees of approximately $100-200. Submit your complete application package to the St. Louis County Planning Department, and expect a review timeline of 4-8 weeks, during which your application may need to go before the county planning commission for approval. Specific requirements for Embarrass area may include compliance with lakeshore setback requirements if near water, adherence to rural residential zoning standards, adequate parking provisions for guests, and ensuring the property meets all fire safety and building code requirements for transient occupancy.

Short-term rentals (STRs) are generally legal in Embarrass, Minnesota, as the small unincorporated community in St. Louis County does not have specific municipal ordinances prohibiting them, and Minnesota state law does not ban STRs outright. However, operators must comply with St. Louis County zoning regulations and state tax requirements, including registering with the Minnesota Department of Revenue and collecting applicable lodging taxes. The county may require conditional use permits for STRs in certain zoning districts, particularly residential areas, and properties must meet basic safety and health standards. Since Embarrass lacks incorporated city status, it falls under county jurisdiction, meaning any restrictions would come from St. Louis County's land use ordinances rather than local city codes. Recent changes in Minnesota include increased state oversight of STR taxation and reporting requirements implemented around 2019-2021, but no significant prohibitive legislation has been enacted specifically affecting rural communities like Embarrass. Property owners should verify current county zoning compliance and ensure proper business licensing and tax registration before operating an STR in the area.

The best areas for Airbnb investment in Embarrass, Minnesota are primarily concentrated around the Embarrass Lake area and the Mesabi Trail corridor, which attract outdoor enthusiasts year-round for fishing, boating, snowmobiling, and ATV activities. The historic downtown district near the old mining sites draws heritage tourists interested in Iron Range history and mining culture, particularly during summer months when visitors explore the area's Finnish and Croatian immigrant heritage. Properties near the Superior National Forest boundary perform well due to proximity to hiking trails, hunting areas, and fall foliage tourism, with peak seasons during summer recreation months and autumn color tours. The area along County Road 21 toward Biwabik offers good investment potential due to its accessibility to both Embarrass attractions and nearby Giants Ridge Resort, capturing overflow accommodation demand from the resort's golf, skiing, and conference activities. Lakefront properties on Embarrass Lake itself command premium rates during peak summer and winter recreation seasons, benefiting from direct water access for fishing and ice fishing activities that are popular with both Minnesota residents and out-of-state visitors.

Airbnb properties in Embarrass, Minnesota are subject to Minnesota's statewide lodging tax of 3% on gross receipts from short-term rentals under 30 days, which is automatically collected by Airbnb and remitted to the Minnesota Department of Revenue on behalf of hosts. St. Louis County, where Embarrass is located, does not impose an additional county lodging tax, but hosts must still register with the Minnesota Department of Revenue if they have other tax obligations or collect taxes independently. The city of Embarrass itself does not appear to have a municipal lodging tax as of 2023, though hosts should verify current local ordinances as small municipalities can change tax policies. Collection occurs automatically through Airbnb's platform for bookings made through the site, with Airbnb handling quarterly remittance to the state, while hosts booking directly must collect and remit the 3% tax themselves using Minnesota tax forms. Exemptions typically include stays of 30 days or longer, which are considered long-term rentals rather than transient lodging, and certain government or charitable organization bookings may qualify for exemptions under specific circumstances.

To start an Airbnb in Embarrass, Minnesota, the total costs would be approximately $185,000-$220,000. Property purchase represents the largest expense at $150,000-$180,000 for a median-priced cabin or home suitable for vacation rental in this rural area near the Iron Range. Furnishing costs would run $8,000-$12,000 to create a comfortable, rustic retreat with quality furniture, bedding, kitchen essentials, and outdoor equipment appropriate for the area's outdoor recreation focus. Initial setup including professional photography, listing creation, and basic marketing materials would cost $800-$1,200. Permits and fees including business licenses, short-term rental permits from St. Louis County, and tax registrations would total $300-$600. Insurance for short-term rental coverage would cost $1,800-$2,400 annually, with the first year paid upfront. Utilities including electricity, propane/heating, water, internet, and waste management would run $200-$350 monthly. First six months of operating costs including utilities ($1,200-$2,100), cleaning supplies and services ($600-$900), maintenance reserves ($1,000), platform fees to Airbnb and VRBO ($400-$600 estimated), and miscellaneous expenses ($500-$800) would total approximately $3,700-$5,400.

Airbnb properties in Embarrass, Minnesota, face challenging profitability conditions due to the town's remote location and limited tourism infrastructure, with most properties generating annual revenues between $8,000-$15,000 compared to expenses of $12,000-$18,000 including mortgage, utilities, maintenance, and cleaning fees, resulting in negative profit margins of -15% to -25% for many hosts. The small population of approximately 700 residents and seasonal nature of visitors, primarily hunters and outdoor enthusiasts during fall and winter months, creates occupancy rates averaging only 25-35% annually. Success factors for the few profitable properties include offering unique experiences like ice fishing packages, snowmobile trail access, or hunting lodge amenities, with properties near Embarrass Lake or the Mesabi Trail performing marginally better at 40-45% occupancy. A typical 3-bedroom cabin listed at $120/night might achieve 90 bookings annually ($10,800 revenue) but face $14,500 in expenses, while properties that differentiate with outdoor recreation packages can reach $18,000-$22,000 in revenue with similar expense structures, achieving 10-15% profit margins. The market remains highly seasonal and dependent on regional economic conditions affecting discretionary travel spending.

Airbnb investments in Embarrass, Minnesota typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, primarily driven by seasonal tourism to the nearby Superior National Forest and Boundary Waters Canoe Area Wilderness. Properties in this small Iron Range community of approximately 700 residents can expect to reach profitability within 18-24 months, with peak earning potential during summer months (June-September) when outdoor recreation drives occupancy rates to 65-75%. The limited housing stock and proximity to Ely and Virginia create competitive advantages, though investors should anticipate seasonal fluctuations with winter occupancy dropping to 25-35%, resulting in average daily rates of $85-120 during peak season and $60-85 during off-peak periods.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Embarrass, Minnesota. Local real estate agents in the Duluth-Superior area such as Edina Realty, RE/MAX Results, and Coldwell Banker Burnet serve the Embarrass region and have experience with investment properties suitable for Airbnb conversions. National services like Mashvisor, BiggerPockets, and AirDNA provide market analysis and property identification tools for the northern Minnesota vacation rental market. RedAwning and Vacasa offer property management services that can help investors evaluate potential Airbnb properties in the area. Local property management companies such as North Shore Property Management and Arrowhead Property Services understand the seasonal rental dynamics of the Iron Range region where Embarrass is located. Investment-focused real estate companies like HomeVestors and BiggerPockets-affiliated agents also work with investors seeking profitable short-term rental opportunities in rural Minnesota markets, while platforms like Roofstock and Fundrise occasionally feature properties in similar northern Minnesota communities that could serve as Airbnb investments.