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, as the city may require short-term rental permits and compliance with residential zoning restrictions that typically allow rentals for less than 30 days in certain districts. Contact the Johnston Building Department to obtain necessary permits, which may include a business license, occupancy permit, and potentially a special use permit depending on your property's zoning classification. Find a suitable property in residential areas like the neighborhoods near Terra Park or Beaver Creek, ensuring it meets safety requirements and has adequate parking, then purchase or lease the property with consideration for Johnston's average home prices around $300,000-400,000 as of recent years. Furnish the property with quality furniture, appliances, linens, and amenities that appeal to business travelers visiting nearby Des Moines or families exploring the area, ensuring compliance with Iowa fire safety codes including smoke detectors and carbon monoxide detectors. Create your Airbnb listing with professional photos highlighting Johnston's proximity to Des Moines attractions and the peaceful suburban setting, setting competitive rates based on similar properties in the Des Moines metro area typically ranging $80-150 per night. Manage your property by establishing cleaning protocols between guests, maintaining responsive communication, coordinating key exchanges or installing smart locks, and ensuring compliance with Iowa tax requirements including collecting and remitting state sales tax and local hotel/motel taxes that may apply to short-term rentals in Polk County.

To identify profitable short-term rental properties in Johnston, Iowa, focus on locations within 15-20 minutes of downtown Des Moines, near major employers like Principal Financial Group and Wells Fargo, and close to attractions such as Adventureland Park in nearby Altoona. Target 3-4 bedroom single-family homes or townhomes built after 2000 with modern amenities, full kitchens, parking, and outdoor spaces, as Johnston's suburban family-oriented market demands these features. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against comparable properties, aiming for $100-180 per night depending on size and amenities, while analyzing seasonal demand patterns around Iowa State Fair (August) and business travel peaks. Research competition by examining existing Airbnb and VRBO listings within 5-mile radius, identifying gaps in luxury or family-friendly accommodations, and monitor occupancy rates of similar properties using tools like AllTheRooms. Utilize local resources including the Johnston Chamber of Commerce for market insights, Polk County property records for investment analysis, STR Helper for regulatory compliance with Johnston's short-term rental ordinances, and connect with local property management companies like RedAwning or Vacasa to understand operational costs and market dynamics specific to the Des Moines metropolitan area.

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 and application process. You'll need to submit a completed STR permit 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, contact information for a local property manager if you live more than 50 miles away, and payment of the application fee which is typically around $150-200 annually. Additional requirements likely include compliance with fire safety codes, maximum occupancy limits based on square footage, parking requirements of at least two spaces per unit, and adherence to noise ordinances with quiet hours from 10 PM to 7 AM. The property must pass a safety inspection conducted by the city's building department, and you'll need to register for and collect Iowa state sales tax and Johnston's local hotel/motel tax of approximately 7%. The application process typically takes 30-45 days from submission to approval, and permits must be renewed annually. You must also provide neighbors within 200 feet written notice of your intent to operate a short-term rental and display your permit number in all online listings.

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, though operators must obtain proper business licenses and comply with local zoning ordinances. Johnston follows Iowa state law regarding STR taxation, requiring hosts to collect and remit state and local taxes including sales tax and hotel/motel tax. The city has implemented basic safety and operational standards including requirements for smoke detectors, carbon monoxide detectors, and maintaining properties in compliance with housing codes. There are no specific prohibited areas city-wide, but STRs must comply with existing residential zoning restrictions and homeowners association rules where applicable. Recent changes in 2022-2023 have focused on clarifying tax collection procedures and ensuring compliance with state regulations, while the city has maintained a relatively permissive approach compared to larger Iowa cities like Des Moines which have implemented more restrictive regulations.

The best areas for Airbnb investment in Johnston, Iowa include the downtown Johnston district near the Johnston Commons and Terra Park area, which attracts business travelers due to its proximity to major employers like Principal Financial Group and Wells Fargo offices, as well as families visiting the highly-rated Johnston Community School District. The neighborhoods around Saylorville Lake and Big Creek State Park are excellent for tourism-focused rentals, drawing visitors for boating, fishing, and outdoor recreation year-round. The areas near Merle Hay Mall and along Merle Hay Road offer strong potential due to heavy retail traffic and accessibility to Des Moines metro attractions. Properties near the Johnston Green and the historic downtown core benefit from local events, farmers markets, and the annual RAGBRAI bicycle event that passes through central Iowa. The residential areas around Beaver Creek and Pioneer Trail are attractive for longer-term stays from corporate relocations and medical professionals working at nearby UnityPoint Health facilities, while the neighborhoods near Johnston High School and middle schools see demand from visiting families during sports tournaments and academic events throughout the school year.

In Johnston, Iowa, Airbnb hosts are subject to Iowa state sales tax of 6% on lodging rentals, which applies to short-term rentals under 31 consecutive days. Additionally, hosts must collect and remit local hotel/motel tax, which in Johnston is typically 7% as part of the greater Des Moines metropolitan area tax structure. These taxes are collected from guests at the time of booking and must be remitted monthly to the Iowa Department of Revenue by the 20th of the following month using form IA 42-001 for state sales tax and separate local tax forms for municipal taxes. Airbnb may collect and remit these taxes automatically in some cases through their platform since approximately 2018, but hosts remain ultimately responsible for compliance. Properties rented for 31 days or longer are generally exempt from transient lodging taxes, and certain agricultural or educational exemptions may apply in specific circumstances, though these are rare for typical Airbnb operations in Johnston.

To start an Airbnb in Johnston, Iowa, expect total costs around $285,000-$320,000. Property purchase represents the largest expense at approximately $250,000-$280,000 based on Johnston's median home prices as of 2023. 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 renovations average $3,000-$5,000. Permits and fees in Johnston include business license ($50-$100), short-term rental permit if required ($200-$500), and potential HOA approval processes. Insurance costs run $1,200-$2,000 annually for short-term rental coverage beyond standard homeowner's insurance. Utility setup and deposits for electricity, gas, water, internet, and cable total approximately $500-$800 initially. First six months of operating costs including utilities ($200-$300 monthly), cleaning services ($75-$100 per turnover), supplies and maintenance ($150-$250 monthly), platform fees (3% of bookings), and property management if outsourced (10-20% of revenue) typically range $8,000-$12,000 depending on occupancy rates and property size.

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), utilities ($150-$250 monthly), property management (10-20% of revenue), insurance ($800-$1,200 annually), and maintenance costs ($2,000-$4,000 yearly). Net profit margins typically range from 15-35% for well-managed properties, with higher-end homes near Beaver Creek Park or Terra Park achieving better performance due to proximity to recreational amenities and Des Moines metro access. Success factors include strategic pricing during Iowa State University events, Drake Relays, and RAGBRAI cycling events, maintaining 4.8+ star ratings, and targeting business travelers visiting nearby companies like Hy-Vee corporate headquarters or John Deere facilities. Properties with 3+ bedrooms and modern amenities consistently outperform smaller units, with some investors reporting $8,000-$18,000 annual net profits per property after accounting for mortgage payments, though market saturation has increased since 2019 as more hosts entered the Johnston market.

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 after initial setup costs, with break-even on cash investment occurring around month 14-20. The market benefits from Johnston's proximity to Des Moines business district, Drake University, and Iowa Events Center, creating steady demand from business travelers and event attendees. Properties requiring minimal renovation typically see faster profitability timelines, while those needing significant updates may extend the break-even period to 24-30 months but can achieve higher long-term returns of 10-14% annually once established.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Johnston, Iowa. Locally, RE/MAX Real Estate Group and Coldwell Banker Mid-America Group have agents experienced in investment properties, while Berkshire Hathaway HomeServices Iowa Properties offers specialized investor services. Keller Williams Des Moines and Century 21 Signature Real Estate maintain investment-focused agents familiar with Johnston's rental market dynamics. National services include Mashvisor for property analysis, AirDNA for market data and revenue projections, and BiggerPockets for investor networking and deal sourcing. RedAwning provides short-term rental market insights, while Awning offers full-service Airbnb property management and acquisition consulting. Local property management companies like Iowa Property Management Group and Meridian Property Management can assist with operational aspects post-purchase. Real estate investment groups such as Des Moines Real Estate Investors Association provide networking opportunities and market knowledge specific to the Johnston area's short-term rental potential.