Is Horace, North Dakota Good for Airbnb Investment?

To start an Airbnb in Horace, North Dakota, begin by researching local zoning laws and contacting the City of Horace planning department to confirm short-term rentals are permitted in your desired area, as some residential zones may restrict commercial activities. Obtain necessary permits including a business license from the city, register with the North Dakota Secretary of State for tax purposes, and secure appropriate insurance coverage that includes short-term rental protection. Find a suitable property by purchasing or leasing a home in residential areas like Prairie Rose or newer developments near 45th Street, ensuring it meets safety codes and has adequate parking. Furnish the property with quality basics including comfortable beds, linens, kitchen essentials, WiFi, and local touches highlighting North Dakota's agricultural heritage and proximity to Fargo attractions. Create your Airbnb listing with professional photos, competitive pricing around $80-120 per night based on Fargo metro area rates, and highlight proximity to West Fargo amenities and easy highway access. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating key exchanges or installing smart locks, maintaining the property regularly, and keeping detailed records for tax purposes including North Dakota's 5% state sales tax and any local lodging taxes that may apply to short-term rentals in Cass County.

To identify profitable short-term rental properties in Horace, North Dakota, focus on properties within 15-20 minutes of Fargo-Moorhead metro area since Horace serves as a bedroom community with limited local tourism infrastructure. Target 3-4 bedroom single-family homes built after 2000 with modern amenities, full kitchens, and outdoor spaces that appeal to business travelers, family visitors, and event attendees from nearby Fargo. Analyze pricing by researching comparable Airbnb listings in West Fargo and south Fargo suburbs, typically ranging $80-150 per night, while monitoring seasonal demand patterns around North Dakota State University events, summer festivals, and winter business travel. Competition research should focus on the limited existing STR inventory in Horace proper and nearby communities like West Fargo and Mapleton, identifying gaps in luxury or family-oriented accommodations. Utilize AirDNA for market analysis, STR Helper for performance tracking, and local Facebook groups like "Fargo Real Estate Investors" for market insights, while partnering with Fargo-area property management companies familiar with the Red River Valley market dynamics and ensuring compliance with Cass County and City of Horace zoning regulations.

To obtain an Airbnb/STR permit in Horace, North Dakota, you must first contact the Horace City Hall at 5430 Prosperity Way to inquire about their specific short-term rental ordinance requirements, as the city implemented STR regulations around 2021-2022. You'll need to submit an application form (available at city hall or their website), provide a copy of your property deed or lease agreement, submit a floor plan of the rental space, obtain a certificate of occupancy, provide proof of liability insurance (typically $1 million minimum), and include contact information for a local property manager if you're not residing locally. Required documents also include a business license application, fire safety inspection certificate, and neighbor notification forms. The application fee is estimated at $150-300 annually, with additional inspection fees of approximately $75-150. The timeline for approval typically takes 30-60 days from submission of a complete application, depending on inspection scheduling and any required corrections. Horace-specific requirements likely include parking provisions (minimum 2 spaces per unit), occupancy limits based on bedrooms plus two additional guests, quiet hours enforcement between 10 PM and 8 AM, and mandatory posting of house rules including maximum occupancy, parking locations, and emergency contact information.

Short-term rentals (STRs) are generally legal in Horace, North Dakota, as the city does not have specific ordinances prohibiting them as of 2024. However, STR operators must comply with North Dakota state regulations and any applicable zoning restrictions within Horace city limits. The city follows standard residential zoning guidelines, which may limit commercial activities in certain residential areas, so property owners should verify their specific zoning designation allows short-term rental use. Horace requires STR operators to obtain proper business licenses and collect applicable state and local taxes, including the 5% North Dakota state sales tax and any local lodging taxes. There are no recent major legal changes specific to Horace regarding STRs, but operators must ensure compliance with fire safety codes, occupancy limits, and noise ordinances. Properties in residential zones may face restrictions on the number of guests or parking requirements, and some homeowners associations may have their own restrictions on short-term rentals that supersede city regulations.

For Airbnb investment in Horace, North Dakota, the most promising areas include the newer residential developments along 76th Avenue South and the neighborhoods near Sheyenne Street, which offer modern homes attractive to business travelers visiting nearby Fargo-Moorhead metro area companies like Microsoft, Sanford Health, and Blue Cross Blue Shield. The areas close to Red River Valley Fairgrounds benefit from seasonal events and agricultural conferences throughout the year, while properties near Horace High School and elementary schools attract visiting families and sports teams. The neighborhoods along Highway 46 provide easy access to West Acres Shopping Center and downtown Fargo's business district, making them ideal for corporate travelers and weekend visitors. Properties near the planned commercial developments on the south side of town offer long-term appreciation potential, while homes close to Sheyenne River State Forest appeal to outdoor enthusiasts and hunters during peak seasons from 2019-2024 tourism data.

Airbnb properties in Horace, North Dakota are subject to the state's 5% lodging tax, which applies to all short-term rental accommodations under 30 days, collected by the North Dakota Tax Commissioner's office through monthly remittance by hosts or property managers, with no specific municipal lodging taxes imposed by the city of Horace as of 2023. The state lodging tax is calculated on gross receipts from rental income and must be remitted by the 20th of the month following collection, with hosts required to register for a lodging tax permit through the North Dakota Tax Commissioner's online portal. Cass County, where Horace is located, does not impose additional occupancy taxes beyond the state requirement, and exemptions are limited to rentals exceeding 30 consecutive days which are considered long-term leases rather than short-term lodging. Airbnb as a platform may collect and remit these taxes directly on behalf of hosts in North Dakota through their automated tax collection system implemented in 2019, though hosts remain ultimately responsible for compliance and should verify that taxes are being properly collected and remitted.

To start an Airbnb in Horace, North Dakota, expect total costs around $285,000-$320,000. Property purchase represents the largest expense at approximately $250,000-$280,000 based on median home prices in the Fargo-Moorhead metro area where Horace is located. Furnishing costs typically range $15,000-$25,000 for a complete 3-bedroom home including furniture, bedding, kitchenware, and décor to create an attractive rental space. Initial setup costs including professional photography, listing creation, welcome materials, and basic supplies total around $2,000-$3,000. Permits and fees vary but budget $500-$1,500 for business licenses, short-term rental permits, and any required inspections. Insurance costs approximately $1,200-$2,000 annually for landlord and short-term rental coverage. Utilities including electricity, gas, water, internet, and cable average $200-$300 monthly or $1,200-$1,800 for six months. First six months operating costs including cleaning services, maintenance, property management software, marketing, and miscellaneous expenses total $3,000-$5,000. Additional considerations include potential HOA fees, property taxes, and a cash reserve for unexpected repairs or vacancy periods.

Airbnb properties in Horace, North Dakota typically generate modest returns due to the small market size and limited tourist demand in this suburban community of approximately 3,000 residents located near Fargo. Average nightly rates range from $75-120 for entire homes, with occupancy rates averaging 35-45% annually, resulting in gross revenues of $8,000-15,000 per year for typical 2-3 bedroom properties. Operating expenses including cleaning fees ($25-40 per turnover), utilities ($150-200 monthly), insurance ($800-1,200 annually), property management (15-25% of revenue), and maintenance typically consume 60-70% of gross revenue. Net profit margins generally range from 8-15% annually, with successful properties achieving $1,200-3,500 in annual profit. Success factors include proximity to Fargo attractions, competitive pricing below $100/night, professional photography, and targeting business travelers or families visiting the region. Properties within 15 minutes of downtown Fargo or near Red River Valley fairgrounds perform better, while those offering amenities like hot tubs or fire pits can command premium rates during summer months when demand peaks for outdoor activities and local events.

Based on Horace, North Dakota 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 recreational areas or serving oil industry workers tend to perform better, with average daily rates of $75-120 and occupancy rates of 45-65% annually. Initial profitability usually occurs within 18-24 months after accounting for startup costs, furnishing, and marketing expenses. The market benefits from steady demand from business travelers, seasonal hunters, and visitors to nearby attractions, though investors should expect seasonal fluctuations with stronger performance during summer months and hunting seasons. Total investment recovery typically occurs within 7-10 years, with properties requiring initial capital of $15,000-25,000 for furnishing and setup costs beyond the property acquisition.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for Airbnb investors across markets including Horace, North Dakota. In the Fargo-Moorhead metropolitan area where Horace is located, real estate agents like those at Coldwell Banker King, RE/MAX Results, and Century 21 Morrison Realty have experience with investment properties and can assist with Airbnb acquisitions. National services such as Mashvisor, AirDNA, and Rabbu provide market analysis and property identification tools for short-term rental investments in smaller North Dakota markets. Local property management companies like Fargo Property Management and Red River Property Management, established around 2015-2018, offer services that can help investors identify suitable properties and manage Airbnb operations. Investment-focused platforms like BiggerPockets connects investors with local professionals, while companies such as AvantStay and RedAwning provide market insights and property sourcing services for short-term rental investments in emerging markets like the greater Fargo area where Horace is situated.