Is Johnston, Iowa Good for Airbnb Investment?

To start an Airbnb in Johnston, Iowa, begin by researching local zoning laws and regulations through the Johnston City Hall (515-278-2344), as Johnston requires short-term rental operators to obtain a business license and comply with residential zoning restrictions that may limit rentals to owner-occupied properties or specific districts. Contact the Polk County Health Department for any required health permits and ensure compliance with Iowa state tax requirements including sales tax registration through the Iowa Department of Revenue. Find a suitable property by working with local real estate agents familiar with Johnston's neighborhoods like Beaver Creek or Terra Park, ensuring the property meets safety codes and HOA restrictions if applicable. Furnish the space with quality furniture from Des Moines area stores like Homemakers Furniture or online retailers, focusing on durability and comfort while including essentials like Wi-Fi, linens, and kitchen supplies. Create your Airbnb listing with professional photos highlighting Johnston's proximity to Des Moines (15 minutes), local attractions like Beaver Creek Golf Course, and nearby shopping at Jordan Creek Town Center. Set competitive pricing by researching similar properties in Johnston and surrounding areas like Urbandale and Grimes, typically ranging $80-150 per night depending on size and amenities. Manage your property by establishing cleaning protocols, installing keyless entry systems, maintaining responsive communication with guests, and considering property management companies like Awning or RedAwning if you prefer hands-off management, while ensuring compliance with Johnston's noise ordinances and parking requirements to maintain good neighbor relations.

To identify profitable short-term rental properties in Johnston, Iowa, focus on locations within 15-20 minutes of Des Moines downtown, near major employers like Principal Financial Group and Wells Fargo, and close to attractions such as Saylorville Lake and local golf courses. Target 3-4 bedroom single-family homes or townhomes built after 1990 with modern amenities, full kitchens, dedicated workspaces, and outdoor spaces like decks or patios that appeal to business travelers and families visiting the metro area. Conduct pricing analysis using AirDNA and Mashvisor to identify properties where potential STR revenue exceeds traditional rental income by 20-30%, typically ranging from $100-150 per night in Johnston's market. Research competition by analyzing existing Airbnb and VRBO listings within a 5-mile radius, identifying gaps in amenities or property types, and studying occupancy rates and guest reviews to understand market saturation. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through Realtor.com, while consulting with Johnston city planning department regarding STR regulations and connecting with local real estate agents familiar with the Saylorville and Northwest Des Moines submarkets to identify emerging neighborhoods with strong rental demand from Drake University visitors, medical professionals at nearby facilities, and corporate travelers.

To obtain an Airbnb/STR permit in Johnston, Iowa, you must first contact the Johnston City Hall at 6221 Merle Hay Road or call 515-278-2344 to inquire about their short-term rental ordinance requirements, as Johnston adopted STR regulations around 2019-2020. You'll need to submit an application form 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, contact information for a local property manager if you're not local, and a completed fire safety inspection from the Johnston Fire Department. The application fee is typically around $150-200 with an annual renewal fee of approximately $100. You must also obtain a business license from the city for roughly $50 and register with the Iowa Department of Revenue for state tax collection purposes. The property must meet all building and fire codes, have working smoke and carbon monoxide detectors in each bedroom and common area, provide emergency contact information posted visibly, and maintain off-street parking for guests. The approval process generally takes 30-45 days after submitting a complete application, and you cannot operate your short-term rental until you receive written approval from the city. Johnston also requires STR operators to collect and remit local hotel/motel tax, maintain a guest registry, and respond to any complaints within 2 hours if you're not local or have a property manager available 24/7.

Short-term rentals (STRs) are legal in Johnston, Iowa, but operate under the city's zoning regulations and business licensing requirements. The city generally allows STRs in residential areas as an accessory use, but property owners must obtain proper business licenses and comply with local zoning ordinances. Johnston requires STR operators to register their properties and may impose occupancy limits, parking requirements, and noise restrictions to maintain neighborhood character. The city has not implemented a cap on the number of STR permits but reserves the right to review and modify regulations as needed. Recent years have seen Johnston, like many Iowa municipalities, refining its STR policies to balance tourism revenue with residential community concerns, though no major prohibitive changes have been enacted as of 2023-2024.

The best areas for Airbnb investment in Johnston, Iowa include the downtown Johnston district near the Johnston Commons and Terra Park area, which attracts families visiting youth sports tournaments and events at the numerous recreational facilities. The neighborhoods around Saylorville Lake, particularly near the marina and beach areas, are highly attractive for seasonal rentals due to water recreation activities, fishing tournaments, and summer events that draw visitors from Des Moines metro area. The corridor along Merle Hay Road and NW 62nd Avenue offers strong potential due to proximity to major employers like Principal Financial Group and Wells Fargo campuses, generating consistent business travel demand. Areas near the Johnston Green and the historic downtown core benefit from the city's growing restaurant scene, farmers markets, and community festivals like RAGBRAI stops that periodically bring cycling tourists. The neighborhoods around Terra Lake and Beaver Creek offer appeal for nature-focused travelers seeking outdoor recreation while maintaining easy access to Des Moines attractions, making them ideal for weekend getaways and extended stays for corporate relocations to the numerous insurance and financial services companies in the greater Des Moines area.

In Johnston, Iowa, Airbnb properties are subject to Iowa's state hotel and motel tax of 7% on gross receipts from lodging rentals, which applies to stays of less than 31 consecutive days. The tax is collected by the host at the time of booking or payment and must be remitted monthly to the Iowa Department of Revenue by the 20th of the following month using Form IA 44-005. Johnston does not impose an additional local lodging tax beyond the state requirement. Polk County, where Johnston is located, does not have a separate county lodging tax. Exemptions include stays of 31 days or longer, rentals to permanent residents, and accommodations provided to employees. Hosts must register with the Iowa Department of Revenue to obtain a sales tax permit before collecting the tax, and failure to collect and remit the tax can result in penalties and interest charges. The tax applies to the total rental amount including cleaning fees but excludes separately stated taxes.

To start an Airbnb in Johnston, Iowa, the total initial costs would be approximately $285,000-$320,000. Property purchase represents the largest expense at $250,000-$280,000 based on Johnston's median home prices in 2024. 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, and basic marketing materials run $1,500-$2,500. Permits and fees in Johnston include business license ($100-$200), short-term rental permit ($200-$400), and potential HOA approval costs totaling $500-$800. Insurance for short-term rentals costs $2,000-$3,500 annually, with most providers requiring upfront payment. Utility setup and deposits for electricity, gas, water, internet, and cable services total $800-$1,200. First six months of operating costs including utilities ($900/month), cleaning services ($150 per turnover), supplies and maintenance ($200/month), platform fees (3% of bookings), and property management software ($50/month) amount to approximately $8,000-$12,000 depending on occupancy rates and seasonal demand in the Des Moines metro area.

Airbnb properties in Johnston, Iowa typically generate annual revenues between $15,000-$35,000 for entire home listings, with average daily rates ranging from $85-$140 depending on property size and amenities. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($25-$40 per turnover), property management (10-20% of revenue), utilities ($150-$300 monthly), insurance ($800-$1,500 annually), and maintenance costs averaging $2,000-$4,000 yearly. Net profit margins typically range from 15-35% for well-managed properties, with higher-end homes near Beaver Creek or newer developments achieving better performance. Success factors include proximity to Des Moines corporate districts (attracting business travelers), competitive pricing against hotels like Hampton Inn or Holiday Inn Express, professional photography, and maintaining 4.8+ star ratings. Properties within 15 minutes of downtown Des Moines or near recreational areas like Saylorville Lake tend to achieve 65-75% occupancy rates, while those offering unique amenities such as hot tubs, game rooms, or pet-friendly accommodations command premium pricing and generate $25,000-$45,000 annually with profit margins reaching 25-40%.

Based on Johnston, Iowa 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. Single-family homes near Johnston's downtown area and close to Des Moines metropolitan amenities tend to perform at the higher end of this range, while properties farther from main attractions may see returns closer to 6-8%. Most investors reach profitability within 18-24 months, with initial investment recovery timeframes of 8-12 years. The market benefits from Johnston's proximity to Des Moines business district, local events, and recreational facilities, with average daily rates of $85-120 and occupancy rates of 65-75% annually. Properties requiring significant renovation may see extended profitability timelines of 30-36 months, while turnkey properties often achieve positive cash flow within 12-15 months of operation.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking to enter the Airbnb market in Johnston, Iowa. Local real estate agents like Keller Williams Des Moines and RE/MAX Concepts have agents experienced in investment properties who understand the Johnston market dynamics and zoning regulations for short-term rentals. Mashvisor and AirDNA provide data analytics services to help investors analyze potential Airbnb profitability in the Johnston area, while BiggerPockets connects investors with local experts and financing options. Iowa Realty, being one of the largest brokerages in the state since 1987, has agents familiar with investment properties in Johnston and surrounding Polk County areas. RedAwning and Awning offer property management and investment analysis services for short-term rental properties. Local property management companies like Meridian Property Management and Iowa Property Management Group can assist with the operational aspects of running Airbnb properties in Johnston. Additionally, national services like Roofstock and Fundrise have expanded into secondary markets like Des Moines metro area, which includes Johnston, offering turnkey investment opportunities and market analysis tools for potential Airbnb investors.