Is Farragut, Iowa Good for Airbnb Investment?

To start an Airbnb in Farragut, Iowa, begin by researching local zoning laws and regulations through the Fremont County Planning and Zoning Department, as Farragut typically falls under county jurisdiction for short-term rental regulations, though you should also check with the city clerk for any municipal ordinances that may require business licenses or special permits for vacation rentals. Obtain necessary permits including a business license from Iowa Department of Revenue, register for state and local taxes, and ensure compliance with fire safety codes and building inspections if required. Find a suitable property by searching local real estate listings through companies like Berkshire Hathaway HomeServices or Century 21, focusing on homes with 2-3 bedrooms near recreational areas like the nearby lakes or historic sites, with properties typically ranging from $80,000-$150,000 in this rural market. Furnish the property with essential amenities including quality bedding, kitchen supplies, WiFi, and local guidebooks highlighting attractions like the Waubonsie State Park and Fremont County Historical Museum, budgeting approximately $8,000-$12,000 for complete furnishing. List your property on Airbnb and VRBO platforms with professional photos showcasing the rural Iowa charm, competitive pricing around $75-$125 per night based on the local market, and detailed descriptions emphasizing proximity to outdoor activities and small-town atmosphere. Manage the property by establishing cleaning protocols between guests, maintaining responsive communication, coordinating with local cleaning services in nearby Shenandoah or Sidney, and ensuring compliance with Iowa's 7% state sales tax and any applicable local lodging taxes while building relationships with local businesses for guest recommendations.

To identify profitable short-term rental properties in Farragut, Iowa, focus on properties within walking distance of the town's main attractions and near Highway 34 for easy access, as this small community of approximately 500 residents relies heavily on visitors passing through or attending local events. Target 2-3 bedroom single-family homes or farmhouse-style properties built after 1980 with modern amenities, full kitchens, and outdoor spaces that appeal to families and business travelers seeking authentic small-town Iowa experiences. Conduct pricing analysis by researching comparable STRs within a 20-mile radius including Red Oak and Shenandoah, aiming for nightly rates between $75-120 depending on property size and amenities, while analyzing seasonal demand patterns around local festivals, hunting seasons, and agricultural events. Research competition by examining existing Airbnb and VRBO listings in Farragut and surrounding Fremont County communities, noting occupancy rates, guest reviews, and pricing strategies of successful properties. Utilize tools like AirDNA for market analysis, STR Helper for revenue projections, and local resources including the Farragut City Hall for zoning regulations, Fremont County tourism boards for event calendars, and networking with local real estate agents familiar with investment properties in rural Iowa markets to identify undervalued properties with STR potential.

To obtain an Airbnb/STR permit in Farragut, Iowa, you must first contact the Farragut City Clerk's office at City Hall located at 100 West Overman Street to inquire about short-term rental regulations and application procedures. Submit a completed business license application along with required documents including proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental unit, and contact information for a local property manager if you live more than 50 miles away. Pay the estimated application fee of $150-250 plus an annual renewal fee of approximately $100-150. Provide documentation showing compliance with fire safety codes, including smoke and carbon monoxide detectors in all sleeping areas, and ensure the property meets all zoning requirements for residential areas. The city may require a safety inspection by the local fire department and building inspector, which typically costs an additional $75-100. Submit proof of Iowa sales tax registration and agree to collect and remit local hotel/motel tax of 7% on all bookings. The approval process generally takes 30-45 days from submission of complete application, and permits must be renewed annually by December 31st. Display the permit number prominently in all online listings and maintain a guest registry available for city inspection upon request.

Short-term rentals (STRs) in Farragut, Iowa are generally legal but subject to local zoning regulations and state oversight. As a small city in Fremont County with a population under 500, Farragut likely operates under basic zoning ordinances that may require STRs to comply with residential use standards and obtain proper business licenses. Iowa state law allows municipalities to regulate STRs through zoning and licensing requirements, and most small Iowa communities permit them in residential areas with basic safety and tax compliance measures. There are typically no specific prohibited areas in a town of Farragut's size, though properties must meet standard building and fire safety codes. Recent changes in Iowa since 2019-2021 have generally favored property owner rights while allowing local governments to maintain reasonable health, safety, and zoning regulations, meaning Farragut can impose registration requirements, occupancy limits, and parking standards but cannot outright ban STRs in residentially-zoned areas.

The best areas for Airbnb investment in Farragut, Iowa would be properties near the downtown core along Highway 2/Main Street, which attracts business travelers visiting local agricultural businesses and serves as a convenient stopover for travelers between Omaha and Des Moines. The residential neighborhoods near Farragut Community School draw visiting families for school events, sports tournaments, and graduations throughout the year. Properties within walking distance of the Farragut City Park and recreational facilities appeal to families attending youth sports events and community gatherings. The area near the historic downtown district, while small, offers charm for visitors exploring rural Iowa heritage and those attending local festivals or community events. Additionally, homes on the outskirts of town with rural views attract visitors seeking agritourism experiences, hunting enthusiasts during fall seasons, and urban dwellers looking for peaceful weekend retreats away from larger cities like Omaha or Council Bluffs.

Airbnb properties in Farragut, Iowa are subject to Iowa's state lodging tax of 7% on gross receipts from rental accommodations, which applies to stays of 31 days or less. The tax is collected by the accommodation provider and must be remitted monthly to the Iowa Department of Revenue by the last day of the following month using Form IA 44-005. Fremont County, where Farragut is located, does not impose an additional county lodging tax, and the city of Farragut does not have a municipal occupancy tax as of 2023. Airbnb typically collects and remits the state lodging tax automatically for hosts in Iowa through their platform since 2019, though hosts remain ultimately responsible for compliance. Exemptions include stays of 32 days or longer, accommodations rented to permanent residents, and rentals to certain government employees on official business. Properties generating less than $1,000 annually in lodging tax may qualify for simplified reporting procedures, and some agricultural exemptions may apply for farm-based accommodations under specific circumstances.

To start an Airbnb in Farragut, Iowa, the total estimated costs would be approximately $185,000-$220,000. Property purchase represents the largest expense at $150,000-$180,000 based on median home prices in small Iowa towns. Furnishing costs would range $15,000-$25,000 for quality furniture, bedding, kitchen essentials, and décor to create an attractive rental space. Initial setup including professional photography, listing creation, and basic renovations would cost $2,000-$4,000. Permits and fees including business license, short-term rental permits, and potential zoning approvals would total $500-$1,500. Insurance including landlord and short-term rental coverage would cost $1,200-$2,000 annually. Utilities setup and deposits for electricity, water, gas, internet, and cable would require $800-$1,200. First six months operating costs including utilities ($600/month), cleaning supplies ($100/month), maintenance reserves ($200/month), property management software ($50/month), and marketing ($100/month) would total approximately $6,300. Additional considerations include potential HOA fees, property taxes, and emergency repair funds which could add $3,000-$5,000 to initial costs.

Airbnb properties in Farragut, Iowa face challenging profitability conditions due to the town's small population of approximately 450 residents and limited tourist attractions, resulting in average daily rates of $65-85 and occupancy rates of 25-35% annually. A typical 2-bedroom property generates around $8,000-12,000 in gross revenue per year, while expenses including mortgage payments ($800-1,200/month), utilities ($150/month), cleaning fees ($40 per turnover), insurance ($1,200/year), and maintenance ($1,500/year) total approximately $12,000-18,000 annually, creating negative cash flows of $2,000-6,000 for most properties. Success factors in this market include targeting business travelers visiting nearby Shenandoah or Red Oak, offering competitive pricing 15-20% below regional averages, and maintaining properties debt-free to improve margins. Properties within walking distance of Farragut's main street or near the recreational lake perform marginally better with occupancy rates reaching 40%, while those requiring significant mortgage payments typically operate at losses of 15-25% annually, making Airbnb investments in Farragut viable primarily for property owners with minimal carrying costs.

Based on Farragut, Iowa market conditions, Airbnb investments typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% depending on property acquisition costs and financing structure. Properties in this rural Iowa market generally reach profitability within 18-24 months, with average daily rates of $75-95 and occupancy rates around 45-60% annually. Initial investment requirements average $150,000-250,000 for suitable properties, with monthly gross revenues typically ranging $1,200-2,400 during peak seasons and $600-1,000 during slower periods. The market benefits from proximity to recreational areas and Des Moines metropolitan spillover, though seasonal fluctuations significantly impact performance with stronger returns during spring through fall months compared to winter periods.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties in Farragut, Iowa, using data analytics and market insights. Local real estate agents in the Des Moines metro area such as RE/MAX Concepts and Coldwell Banker Mid-America Group have experience with investment properties that could serve the Airbnb market in smaller Iowa communities like Farragut. National services including BiggerPockets, Roofstock, and AirDNA provide market analysis and property identification tools for short-term rental investments in emerging Iowa markets. Mashvisor offers rental property analysis specifically for Airbnb investments and covers Iowa markets, while companies like RedAwning and AvantStay focus on short-term rental property management and acquisition. Local property management companies such as Iowa Property Management Solutions and Midwest Property Services can assist with the operational aspects of Airbnb properties in the Farragut area, and national platforms like Awning and RedAwning provide end-to-end services from property identification to management for investors looking to enter the Iowa short-term rental market.