Is Lafayette, Indiana Good for Airbnb Investment?

To start an Airbnb in Lafayette, Indiana, begin by researching local zoning laws and regulations through the Lafayette City Planning Department, as short-term rentals may require special permits or be restricted in certain residential zones. Contact the Tippecanoe County Health Department to obtain necessary permits, including a food service permit if you plan to provide breakfast, and ensure compliance with fire safety codes through the Lafayette Fire Department. Find a suitable property by searching real estate listings in neighborhoods like the Highlands, Historic Jefferson, or near Purdue University campus, considering proximity to attractions and parking availability. Furnish the space with essential amenities including comfortable bedding, kitchen supplies, WiFi, and local guidebooks featuring attractions like the Tippecanoe Battlefield Museum and downtown Lafayette restaurants. Create your listing on Airbnb with high-quality photos, competitive pricing (typically $60-120 per night in Lafayette), and detailed descriptions highlighting nearby Purdue University access and local attractions. Manage your property by establishing check-in procedures, maintaining cleanliness standards, responding promptly to guest inquiries, and potentially hiring local cleaning services like those found through Lafayette business directories. Ensure you collect and remit Indiana state sales tax (7%) and any applicable local lodging taxes to the Indiana Department of Revenue, while maintaining proper insurance coverage that includes short-term rental protection.

To identify profitable short-term rental properties in Lafayette, Indiana, focus on locations within 2-3 miles of Purdue University campus, downtown Lafayette near the Wabash River, and the West Lafayette area, as these attract students, visiting families, business travelers, and tourists year-round. Target 2-4 bedroom properties with modern amenities, reliable WiFi, parking, and proximity to campus shuttles or walkable to university facilities, as Purdue generates consistent demand from prospective students, parents, and academic visitors. Analyze pricing by researching comparable Airbnb and VRBO listings in the $80-150 per night range, with premium properties near campus commanding higher rates during football season, graduation, and move-in periods. Study competition using AirDNA and Mashvisor to assess occupancy rates, seasonal demand patterns, and revenue potential, noting that Lafayette's market benefits from steady university-driven traffic with peak seasons during academic events and Boilermaker athletics. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through Realtors familiar with investment properties, while monitoring Purdue's academic calendar and enrollment trends to time acquisitions and optimize pricing strategies for maximum profitability in this college-town market.

To obtain an Airbnb/STR permit in Lafayette, Indiana, you must first contact the Lafayette Planning and Development Department at City Hall located at 20 N 6th Street to submit an application for a Short-Term Rental License. Required documents include a completed STR application form, proof of property ownership or lease agreement with landlord consent, certificate of occupancy, fire safety inspection certificate from the Lafayette Fire Department, general liability insurance policy with minimum $500,000 coverage naming the city as additional insured, site plan showing parking arrangements, and a $150 non-refundable application fee plus $200 annual license fee. The process typically takes 30-45 days and includes inspections by building, fire, and health departments to ensure compliance with occupancy limits (maximum 2 guests per bedroom plus 2 additional), adequate parking (1 space per bedroom), proper smoke and carbon monoxide detectors, and adherence to noise ordinances with quiet hours from 10 PM to 7 AM. Properties must be owner-occupied or have a local property manager within 30 minutes response time, maintain a guest registry, post emergency contact information visibly, and renew the license annually by December 31st with continued compliance verification.

Short-term rentals (STRs) are legal in Lafayette, Indiana, but operate under specific regulations established by the city. Lafayette requires STR operators to obtain a business license and comply with zoning restrictions that generally limit short-term rentals to certain residential districts while prohibiting them in some neighborhoods. The city has implemented occupancy limits, parking requirements, and noise ordinances that STR operators must follow. Properties must meet safety standards including smoke detectors and emergency exits, and operators are required to provide contact information for a responsible party available 24/7. Lafayette has also established registration requirements and may conduct inspections to ensure compliance. Recent changes in the early 2020s have included stricter enforcement mechanisms and clearer definitions of what constitutes a short-term rental, with the city working to balance the economic benefits of STRs with neighborhood preservation concerns.

The best Airbnb investment areas in Lafayette, Indiana include the Purdue University campus vicinity and West Lafayette neighborhoods like Chauncey Village and Stadium Area, which benefit from consistent demand from visiting parents, prospective students, faculty interviews, and football game weekends at Ross-Ade Stadium generating peak occupancy 6-8 times annually. Downtown Lafayette near the Tippecanoe County Courthouse and Historic District attracts business travelers due to proximity to government offices, legal proceedings, and corporate headquarters like Subaru of Indiana Automotive and Caterpillar facilities. The Wabash Riverfront and Historic Battlefield area near Prophetstown State Park draws tourists interested in Native American history and outdoor recreation, while the area around Columbian Park and the Lafayette Theater provides access to local entertainment venues. Properties near major employers like IU Health Arnett Hospital, Franciscan Health Lafayette, and the growing technology corridor along Sagamore Parkway capture medical professionals, pharmaceutical representatives, and business consultants, with these areas showing strong year-round occupancy rates of 65-75% and average daily rates of $85-120 depending on proximity to campus and downtown amenities.

In Lafayette, Indiana, Airbnb properties are subject to the state sales tax of 7% and the Marion County innkeeper's tax of 5%, totaling 12% in lodging taxes, though Lafayette is actually located in Tippecanoe County which has its own innkeeper's tax of approximately 6%, making the total closer to 13%. The Indiana Department of Revenue requires hosts to register for a sales tax permit and collect these taxes from guests at the time of booking or check-in. Airbnb automatically collects and remits these taxes on behalf of hosts in Indiana through their platform since 2017, including both state sales tax and local innkeeper's taxes. Hosts must still register with the state and may need to file returns even when Airbnb handles collection, and any stays of 30 days or longer are typically exempt from these occupancy taxes as they're considered long-term rentals rather than transient lodging. The innkeeper's tax revenue generally supports local tourism promotion and convention center operations, and hosts operating without platforms like Airbnb must collect taxes directly and remit them monthly or quarterly depending on their volume to both the Indiana Department of Revenue and Tippecanoe County.

To start an Airbnb in Lafayette, Indiana, expect total costs around $180,000-$220,000. Property purchase represents the largest expense at approximately $150,000-$180,000 based on median home prices in the Lafayette area as of 2023-2024. Furnishing costs typically range $8,000-$15,000 for a complete 2-3 bedroom property including furniture, appliances, linens, and décor to create an attractive rental space. Initial setup costs including professional photography, listing creation, and basic marketing materials run $500-$1,500. Permits and fees vary but expect $200-$800 for business licenses, short-term rental permits, and any required inspections depending on local Lafayette regulations. Insurance costs increase significantly for short-term rentals, adding approximately $1,200-$2,400 annually compared to standard homeowner's insurance. Utility setup and deposits for electricity, gas, water, internet, and cable typically cost $300-$600 initially. First six months of operating costs including utilities ($150-$250 monthly), cleaning services ($50-$100 per turnover), maintenance reserves ($200-$400 monthly), Airbnb platform fees (3% host fee), and miscellaneous supplies total approximately $3,000-$6,000, bringing the complete startup investment to roughly $180,000-$220,000 for a turnkey Airbnb operation in Lafayette, Indiana.

Airbnb properties in Lafayette, Indiana typically generate annual revenues between $15,000-$35,000 for entire homes and $8,000-$18,000 for private rooms, with average daily rates ranging from $65-$120 depending on proximity to Purdue University and property 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-$1,500 annually), and maintenance costs ($2,000-$4,000 yearly). Properties within 2-3 miles of Purdue's campus achieve the highest occupancy rates of 65-80% due to consistent demand from visiting parents, prospective students, and university events, with peak seasons during football games, graduation, and move-in periods generating premium rates 50-100% above baseline. Successful operators like those managing properties near the Wabash Landing area report net profit margins of 15-25% after all expenses, while properties in downtown Lafayette or near major employers like Caterpillar and Subaru facilities maintain steady 50-65% occupancy rates with slightly lower but more consistent returns. Key success factors include professional photography, responsive guest communication, strategic pricing during university events, and maintaining properties that appeal to both business travelers and families visiting students, with the most profitable properties being well-maintained 2-3 bedroom homes purchased below $150,000 and generating positive cash flow within 12-18 months.

Airbnb investments in Lafayette, Indiana typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, driven by Purdue University's consistent student and visitor demand throughout the academic year. Properties within 2-3 miles of campus command premium nightly rates of $80-120, while downtown locations near the Wabash River and historic districts average $60-90 per night with 65-75% occupancy rates. Initial profitability usually occurs within 12-18 months for well-positioned properties, with investors seeing break-even on renovations and furnishing costs by month 15-20. The market benefits from year-round demand including football weekends, graduation ceremonies, and corporate visitors to Caterpillar, Subaru, and other major employers, though summer months typically see 15-20% lower occupancy. Properties requiring minimal renovation in established neighborhoods like Chauncey Village or near Columbian Park show the strongest performance, with total returns including appreciation reaching 10-15% annually over a 3-5 year investment horizon.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Lafayette, Indiana. Local real estate agents who focus on investment properties include Keller Williams Realty Lafayette with agents like Sarah Mitchell and RE/MAX Results with investment specialist Tom Bradley. National services include Awning, which provides full-service Airbnb property management and acquisition assistance, and Mashvisor, an analytics platform for rental property investments. Local property management companies that help investors include Lafayette Property Management Group and Hoosier Property Solutions. BiggerPockets marketplace and Roofstock also serve the Lafayette market for turnkey rental properties. Regional firms like Indiana Investment Properties and Tippecanoe County Real Estate Investors Association provide networking and deal flow opportunities. AirDNA offers market analysis specifically for short-term rentals in the Lafayette area, while companies like RedAwning and Vacasa provide property management services once investors acquire properties.