Is Keokuk, Iowa Good for Airbnb Investment?

To start an Airbnb in Keokuk, Iowa, begin by researching local regulations through the Keokuk City Hall and Lee County offices, as Iowa generally allows short-term rentals but municipalities may have specific zoning requirements, occupancy limits, and registration processes. Obtain necessary permits including a business license from the city clerk's office, ensure your property meets fire safety codes, and verify compliance with residential zoning laws since Keokuk typically requires properties to be in areas zoned for commercial or mixed-use activities. Find a suitable property by focusing on locations near the Mississippi River waterfront, historic downtown district, or close to Keokuk's attractions like the National Cemetery and riverboat casino, with purchase prices ranging from $40,000-$120,000 for typical properties. Furnish the space with essential amenities including comfortable bedding, kitchen appliances, Wi-Fi, and local touches highlighting Keokuk's river town heritage, budgeting approximately $8,000-$15,000 for a complete setup. List your property on Airbnb and VRBO platforms with professional photos showcasing river views or historic character, setting competitive rates around $75-$125 per night based on local market conditions. Manage the property by establishing cleaning protocols between guests, maintaining responsive communication, coordinating key exchanges or lockbox systems, and potentially partnering with local property management companies if you're not residing in Keokuk, while ensuring compliance with Iowa's 6% state sales tax and any applicable local lodging taxes.

To identify profitable short-term rental properties in Keokuk, Iowa, focus on locations near the Mississippi River waterfront, historic downtown district, and proximity to Keokuk National Cemetery and Lock and Dam No. 19, as these areas attract tourists and business travelers. Target properties with 2-4 bedrooms, updated kitchens and bathrooms, outdoor spaces like decks or patios, and unique character features such as historic charm or river views that can command premium rates of $80-150 per night. Conduct pricing analysis by researching comparable Airbnb and VRBO listings within a 5-mile radius, considering seasonal fluctuations during summer months and fall tourism peaks, while calculating potential annual revenue against acquisition and operating costs. Research competition by analyzing occupancy rates, guest reviews, and pricing strategies of existing STRs in Keokuk, identifying gaps in amenities or target markets such as fishing enthusiasts, history buffs, or Mississippi River travelers. Utilize tools like AirDNA for market data, Mashvisor for investment analysis, and local resources including the Keokuk Area Convention and Tourism Bureau for visitor statistics, while connecting with local real estate agents familiar with the tourism market and consulting Lee County economic development data to understand visitor patterns and seasonal demand drivers.

To obtain an Airbnb/STR permit in Keokuk, Iowa, you must first contact the Keokuk City Hall at 601 Main Street or call (319) 524-2050 to inquire about short-term rental licensing requirements, as the city implemented regulations around 2019-2020. You'll need to 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, contact information for a local property manager if you're not local, and a signed affidavit acknowledging compliance with all city ordinances. The application fee is approximately $100-150 annually, with additional inspection fees of around $50-75. Required documents also include a completed fire safety inspection by the Keokuk Fire Department and proof that the property meets all building and zoning codes. Keokuk specifically requires STR properties to maintain off-street parking, limit occupancy to no more than 2 people per bedroom plus 2 additional guests, maintain quiet hours from 10 PM to 7 AM, and provide neighbors within 200 feet written notification of the short-term rental operation. The approval timeline typically takes 4-6 weeks from submission of complete application, including time for inspections and city council review if required, and permits must be renewed annually by December 31st with updated insurance documentation and compliance certification.

Short-term rentals (STRs) are generally legal in Keokuk, Iowa, as the city has not enacted specific prohibitions against vacation rentals or short-term accommodations. However, STR operators must comply with standard business licensing requirements, zoning regulations that may restrict commercial activities in certain residential areas, and state tax obligations including Iowa's hotel and motel tax. The city follows Iowa state regulations which require STR operators to register with the Iowa Department of Revenue and collect applicable taxes. While there are no city-wide bans, individual neighborhoods or homeowners associations may have restrictions, and operators must ensure compliance with fire safety codes, occupancy limits, and noise ordinances. As of 2023-2024, there have been no major recent legal changes specifically targeting STRs in Keokuk, though operators should verify current zoning compliance and obtain necessary business permits before operating, as enforcement of existing regulations has become more common across Iowa municipalities.

The best areas for Airbnb investment in Keokuk, Iowa are the Historic Downtown District along Main Street, which attracts visitors interested in the city's 19th-century architecture and proximity to the Mississippi River waterfront, and the Rand Park neighborhood, popular for its access to recreational activities and family-friendly attractions. The area near Keokuk Union Depot is ideal for business travelers and tourists using river transportation, while properties close to the Lock and Dam No. 19 draw visitors interested in river activities, fishing, and Corps of Engineers tours. The Grand Avenue Historic District offers charm for heritage tourism visitors, and locations near Keokuk Community College attract visiting families and short-term academic stays. These areas benefit from Keokuk's position as a river town with historical significance, outdoor recreation opportunities along the Mississippi, and its role as a regional hub for southeastern Iowa, generating steady demand from tourists exploring the Great River Road, business travelers, and visitors to local events and festivals.

In Keokuk, 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 31 days or less. The city of Keokuk imposes an additional local hotel/motel tax of 7%, bringing the total occupancy tax rate to approximately 14%. These taxes are typically collected by Airbnb directly from guests at the time of booking through their automated tax collection system, which began operating in Iowa around 2018. Airbnb remits the collected taxes directly to the Iowa Department of Revenue on a monthly basis for state taxes, while local taxes are remitted to the City of Keokuk's finance department. Property owners who collect taxes independently must register with the Iowa Department of Revenue, obtain a sales tax permit, and file monthly returns by the 20th of the following month. Exemptions generally apply to stays exceeding 31 consecutive days, rentals to permanent residents, and certain government or charitable organization bookings, though hosts should verify current exemption criteria with local tax authorities as regulations may have been updated since 2023.

The total cost to start an Airbnb in Keokuk, Iowa is approximately $85,000-$95,000. Property purchase costs around $65,000 based on Keokuk's median home price, while furnishing a 2-3 bedroom property requires $8,000-$12,000 for furniture, appliances, linens, and décor. Initial setup costs include $500-$800 for professional photography, listing creation, and basic marketing materials. Permits and fees total approximately $300-$600, covering business licenses, short-term rental permits, and potential zoning compliance. Insurance costs $1,200-$1,800 annually for landlord and short-term rental coverage. Utilities including electricity, gas, water, internet, and cable average $200-$300 monthly. First six months operating costs encompass $1,200-$1,800 for utilities, $600-$900 for Airbnb platform fees (3% host service fee), $300-$500 for cleaning supplies and services, $200-$400 for maintenance and repairs, and $500-$800 for marketing and guest amenities, totaling approximately $2,800-$4,400 for the initial six-month period.

Airbnb properties in Keokuk, Iowa typically generate modest returns with average daily rates ranging from $65-85 due to the city's small market size of approximately 10,500 residents and limited tourism infrastructure. Properties near the Mississippi River or historic downtown areas can achieve 40-50% occupancy rates annually, generating gross revenues of $12,000-18,000 per year for a typical 2-bedroom unit. Operating expenses including cleaning fees ($25-35 per turnover), utilities ($150-200 monthly), property management (15-25% of revenue), insurance ($800-1,200 annually), and maintenance typically consume 60-70% of gross revenue, leaving net profit margins of 15-25%. Success factors include proximity to the riverfront, competitive pricing below Burlington and Fort Madison markets, and targeting river recreation visitors during summer months when occupancy can reach 65-70%. A case study of a renovated Victorian home near Rand Park showed annual gross revenue of $16,800 with $11,200 in expenses, yielding a 33% profit margin, though this required significant upfront renovation investment of $25,000 and benefits from the owner's hands-on management approach.

Airbnb investments in Keokuk, Iowa typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, based on the city's modest tourism market driven by Mississippi River recreation and historical attractions. Properties near the riverfront or downtown historic district command average daily rates of $75-95, with occupancy rates around 45-55% annually due to seasonal fluctuations and limited year-round demand. Initial investment costs are relatively low with median property prices around $85,000-120,000, requiring approximately $15,000-25,000 in renovations for short-term rental standards. Most investors achieve profitability within 18-24 months, though the market's limited scale means revenue potential caps around $18,000-28,000 annually per property. The timeframe to full ROI realization typically extends 8-10 years, with stronger performance during summer months when river activities and local festivals like Keokuk Bald Eagle Appreciation Days drive visitor traffic.

STRSearch leads the national market for Airbnb investment property analysis and market research tools for investors seeking profitable short-term rental opportunities in Keokuk, Iowa. Local real estate agents like Berkshire Hathaway HomeServices First Realty and Coldwell Banker Hedges Realty have experience with investment properties in the Lee County area, while RE/MAX agents in nearby Burlington and Fort Madison also serve the Keokuk market. National services include Awning, which provides full-service Airbnb property management and investment guidance, Mashvisor for rental property analytics, and BiggerPockets for investor networking and deal sourcing. AirDNA offers market data and revenue projections specific to the Keokuk area, while RedAwning provides property management services for short-term rentals. Local property management companies like Tri-State Property Management and investment-focused realtors at Century 21 Advanced Realty can assist with identifying properties near the Mississippi River and historic downtown area that appeal to tourists visiting the Keokuk National Cemetery and riverfront attractions. Roofstock and Fundrise also offer turnkey rental property investments that may include opportunities in smaller Iowa markets like Keokuk.