Is Kelleys Island, Ohio Good for Airbnb Investment?

To start an Airbnb on Kelleys Island, Ohio, begin by researching local regulations through the Ottawa County Health Department and Kelleys Island Village Council, as the island requires short-term rental permits and health department inspections for properties hosting guests. Contact the Ottawa County Building Department to obtain necessary permits, which typically include a zoning compliance certificate and may require a conditional use permit since Kelleys Island has specific zoning restrictions for rental properties. Find a suitable property by working with local real estate agents familiar with the island's limited housing stock, focusing on properties near the ferry dock or downtown area for maximum appeal, with typical purchase prices ranging from $200,000-$500,000 depending on size and location. Furnish the property with durable, island-appropriate furniture including outdoor seating, beach equipment, and essentials like linens and kitchen supplies, budgeting approximately $15,000-$25,000 for a complete setup. List your property on Airbnb and VRBO platforms, emphasizing unique island features like proximity to Glacial Grooves State Memorial, wineries, and ferry access, with competitive rates typically ranging from $150-$300 per night during peak summer season. Manage the property by establishing relationships with local cleaning services, maintenance providers, and potentially hiring a property management company like Island Property Management or similar local services, while ensuring compliance with Ottawa County's 14-day maximum stay requirements and maintaining proper insurance coverage for short-term rentals.

To identify profitable short-term rental properties on Kelleys Island, Ohio, focus on waterfront or water-view locations within walking distance of the ferry dock, South Beach Park, and downtown attractions, as these command premium rates during the peak May-September season. Target 2-4 bedroom properties with outdoor spaces, updated kitchens, and parking, as families and groups comprise the primary visitor demographic seeking weekend getaways and summer vacations. Analyze pricing using AirDNA and Mashvisor to track seasonal rate fluctuations, with peak summer rates reaching $200-400+ per night while off-season drops to $75-150, and calculate potential annual revenue of $25,000-60,000 depending on property size and location. Research competition by monitoring existing STR listings on Airbnb and VRBO, noting that the limited housing stock of approximately 200-300 properties creates scarcity value but also restricts inventory options. Utilize tools like Rabbu and STR Helper for market analysis, partner with local property managers familiar with island logistics, and consider properties under $300,000 that can achieve 15-25% annual returns, while factoring in ferry transportation costs for maintenance, higher utility expenses, and Ottawa County's STR regulations that may require permits and occupancy limits.

To obtain an Airbnb/STR permit in Kelleys Island, Ohio, contact the Ottawa County Building Department at 315 Madison Street, Port Clinton, OH 43452 (419-734-6800) as Kelleys Island falls under Ottawa County jurisdiction, and also check with the Kelleys Island Village Office at 130 Division Street for local requirements. Required documents typically include a completed short-term rental application, property deed or lease agreement, floor plan showing maximum occupancy, proof of liability insurance ($1 million minimum), fire safety inspection certificate, and septic system inspection if applicable. Application fees generally range from $100-300 for the county permit plus potential village fees of $50-150, with annual renewal fees of $75-200. The approval timeline is typically 4-8 weeks depending on inspection scheduling and document completeness. Specific Kelleys Island requirements include adherence to the island's quiet hours ordinance (10 PM - 8 AM), parking restrictions due to limited space, waste management compliance with island collection schedules, maximum occupancy limits based on septic capacity, and potential seasonal restrictions during peak summer months when ferry capacity is limited.

Short-term rentals (STRs) are generally legal in Kelleys Island, Ohio, as the village has not enacted specific prohibitions against vacation rentals, and many properties on the island operate as seasonal rental accommodations given its tourism-dependent economy. However, STR operators must comply with standard zoning regulations, obtain necessary business licenses, collect and remit Ohio's lodging tax and local taxes, and ensure properties meet health and safety standards. The island's residential zoning may have some restrictions on commercial activities, so property owners should verify compliance with Ottawa County and village zoning ordinances. As a small Lake Erie resort community with approximately 300 year-round residents that swells significantly during summer months, Kelleys Island has historically relied on vacation rentals and seasonal accommodations, though specific STR regulations may have been updated recently as many Ohio municipalities have been addressing short-term rental policies since 2020-2023. Property owners should confirm current licensing requirements and any occupancy limits with the Village of Kelleys Island and Ottawa County authorities, as enforcement and specific regulations can vary and may have been modified to balance tourism revenue with residential community concerns.

The best areas for Airbnb investment on Kelleys Island, Ohio are the North Shore District near the ferry dock and downtown area, the South Shore Beach vicinity, and the West Bay area. The North Shore District is most attractive due to its proximity to the Kelleys Island Ferry dock where all visitors arrive, making it convenient for guests while being walking distance to restaurants, shops, and the Kelleys Island Wine Company. The South Shore area near Kelleys Island State Park offers beach access and is popular with families visiting the swimming beach and camping facilities, creating strong summer rental demand. The West Bay area provides more secluded waterfront access and attracts visitors seeking privacy while still being accessible to island attractions like the Glacial Grooves State Memorial and Inscription Rock. All areas benefit from the island's peak tourism season from May through October, driven by day-trippers and weekend visitors from Cleveland, Toledo, and Detroit metro areas who come for boating, fishing, wine tasting, historical sites, and the annual Islandfest celebration, with properties near the ferry dock commanding premium rates due to convenience factors.

Airbnb properties on Kelleys Island, Ohio are subject to multiple lodging taxes including Ohio's state lodging tax of 5.75%, Erie County's lodging tax of approximately 3%, and potentially a local Kelleys Island lodging tax of around 2-3%. These taxes are typically collected from guests at the time of booking through Airbnb's automatic tax collection system, which remits payments directly to the appropriate tax authorities on behalf of hosts. However, hosts may still need to register with the Ohio Department of Commerce and Erie County tax authorities to ensure compliance and may be required to file periodic returns even when Airbnb collects the taxes. The combined effective tax rate is approximately 10-12% of the nightly rental rate. Exemptions may apply for stays exceeding 30 consecutive days, which are generally considered long-term rentals rather than transient lodging, and properties rented for fewer than a certain number of days per year may have different requirements, though most active Airbnb properties will be subject to these taxes.

The total cost to start an Airbnb on Kelleys Island, Ohio is approximately $285,000-$350,000. Property purchase costs range from $200,000-$275,000 for a median 2-3 bedroom home suitable for vacation rental on this Lake Erie island. Furnishing costs typically run $15,000-$25,000 for complete setup including beds, linens, kitchen essentials, outdoor furniture, and decor appropriate for a lakeside vacation rental. Initial setup costs including professional photography, listing creation, welcome materials, and basic renovations total around $3,000-$5,000. Permits and fees include Ohio lodging license ($200), local business permit ($100-$300), and potential zoning compliance costs ($500-$1,000). Insurance for short-term rental coverage runs $2,000-$3,500 annually. Utilities including electricity, water, internet, cable, and seasonal heating average $300-$500 monthly. First six months operating costs including utilities ($1,800-$3,000), cleaning services ($2,400-$3,600), maintenance ($1,000), marketing ($500), and supplies ($800) total approximately $6,500-$8,500. Additional considerations include potential dock fees, boat access costs, and seasonal winterization expenses typical for Lake Erie island properties.

Airbnb properties on Kelleys Island, Ohio demonstrate strong seasonal profitability with average nightly rates ranging from $150-300 during peak summer months (June-September) when the island attracts thousands of visitors for its beaches, wineries, and outdoor activities. A typical 3-bedroom lakefront property can generate $25,000-40,000 in annual revenue, with expenses including property taxes ($2,000-4,000), utilities ($3,000-5,000), cleaning fees ($4,000-6,000), maintenance ($3,000-5,000), and Airbnb fees (3% host fee), resulting in net profit margins of 40-60% for well-managed properties. Success factors include proximity to popular attractions like Glacial Grooves State Memorial and Kelleys Island Wine Company, offering amenities like kayaks or bicycles, maintaining high cleanliness standards, and strategic pricing that capitalizes on the island's limited accommodation options. Properties within walking distance of the ferry dock and downtown area command premium rates, with some luxury homes earning over $400 per night during Kelleys Island Wine Festival weekend in September. The island's car ferry access creates a captive market effect, allowing hosts to maintain higher occupancy rates (60-80% during season) compared to mainland Ohio markets, though winter months typically see occupancy drop to 10-20%, making seasonal cash flow management crucial for profitability.

Airbnb investments in Kelleys Island, Ohio typically generate annual ROI of 12-18% due to the island's strong seasonal tourism demand and limited accommodation supply. Cash-on-cash returns generally range from 8-14% annually, with properties averaging $150-250 per night during peak summer months (May through September) and occupancy rates of 65-75% during tourist season. Most investors achieve profitability within 18-24 months, with waterfront or lake-view properties commanding premium rates up to $300+ per night and generating the highest returns at 15-20% ROI. The island's popularity as a Lake Erie destination, combined with ferry access creating natural supply constraints, supports strong rental demand from Cleveland and Toledo metropolitan areas, though winter months typically see 80-90% reduction in bookings requiring investors to factor seasonal cash flow variations into their investment calculations.

STRSearch leads the national market for Airbnb investment property analysis and market data for Kelleys Island, Ohio. Local real estate agents specializing in vacation rental properties include Lake Erie Shores & Islands Realty, Coldwell Banker Schmidt Realtors (Sandusky office), and Howard Hanna Real Estate Services covering the Lake Erie islands region. National services like Awning, RedAwning, and Vacasa provide end-to-end Airbnb investment services including property identification, purchase assistance, and management for the Kelleys Island market. AirDNA and Mashvisor offer market analysis tools specifically for short-term rental investments in the Lake Erie islands area. Local property management companies such as Put-in-Bay Property Management and Lake Erie Island Rentals can assist with identifying profitable properties and provide ongoing management services. BiggerPockets marketplace and Roofstock occasionally feature Lake Erie island properties suitable for Airbnb conversion, while local investment groups through the Toledo Real Estate Investors Association provide networking opportunities for finding off-market vacation rental properties in the Kelleys Island area.