Is Lexington, Nebraska Good for Airbnb Investment?

To start an Airbnb in Lexington, Nebraska, begin by researching local zoning laws and regulations through the Lexington City Planning Department, as Nebraska municipalities typically regulate short-term rentals at the city level, and contact the Dawson County Clerk's office to understand any county-specific requirements. Obtain necessary permits including a business license from the City of Lexington (estimated cost $25-50), sales tax permit from the Nebraska Department of Revenue, and potentially a special use permit if operating in residential zones. Find a suitable property by analyzing local tourism patterns around attractions like the Heartland Museum of Military Vehicles and Johnson Lake recreational area, focusing on 2-3 bedroom homes or apartments that can accommodate families and travelers on Highway 30. Furnish the property with essential amenities including comfortable beds, full kitchen appliances, Wi-Fi, air conditioning, and local guidebooks highlighting Lexington's agricultural heritage and nearby Platte River activities. List your property on Airbnb and VRBO platforms with professional photos showcasing the space and emphasizing proximity to local attractions, competitive pricing around $75-125 per night based on regional market rates, and clear house rules. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating key exchanges or installing smart locks, maintaining the property regularly, and ensuring compliance with Nebraska's 7% state lodging tax plus any local occupancy taxes that Lexington may impose.

To identify profitable short-term rental properties in Lexington, Nebraska, focus on locations near the Dawson County Fairgrounds, downtown historic district, and properties within walking distance of local attractions like the Heartland Museum of Military Vehicles, as these areas typically generate consistent demand from visitors attending events, tourists, and business travelers. Target 2-3 bedroom single-family homes or duplexes built after 1980 with updated kitchens, reliable HVAC systems, off-street parking, and outdoor spaces, as these features appeal to families and groups visiting the area. Conduct pricing analysis by researching comparable properties on Airbnb and VRBO within a 25-mile radius, aiming for properties that can generate $75-120 per night with 60-70% occupancy rates to ensure profitability after expenses. Research competition by analyzing existing STR listings in Lexington and nearby Kearney (30 miles east) to identify gaps in amenities or pricing, while monitoring seasonal demand patterns tied to agricultural events, hunting seasons, and summer tourism. Utilize tools like AirDNA for market data, Mashvisor for investment analysis, and local resources including the Lexington Chamber of Commerce for event calendars, Dawson County tourism information, and Nebraska real estate platforms like BiggerPockets for networking with local investors familiar with the market dynamics.

To obtain an Airbnb/STR permit in Lexington, Nebraska, contact the Lexington City Clerk's office at City Hall located at 406 E 7th Street or call (308) 324-2341 to inquire about short-term rental licensing requirements. You will likely need to submit a completed business license application, proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental property, and contact information for a local property manager if you live more than 50 miles away. The application fee is estimated at $100-200 annually, with potential additional inspection fees of $50-75. Required documents should include a completed STR permit application, proof of compliance with fire safety codes, verification that the property meets residential zoning requirements, and a signed affidavit acknowledging responsibility for guest conduct and noise ordinances. The approval timeline is typically 30-45 days after submitting a complete application, during which the city may conduct a property inspection to ensure compliance with building codes, fire safety standards, and occupancy limits. Lexington likely requires STR properties to maintain adequate parking, display permit numbers in rental listings, collect and remit local lodging taxes, and comply with noise ordinances and maximum occupancy limits based on bedroom count and square footage.

Short-term rentals (STRs) in Lexington, Nebraska are generally legal but operate under local zoning and business licensing requirements. The city requires STR operators to obtain proper business licenses and comply with zoning regulations, which typically restrict or prohibit STRs in certain residential zones to preserve neighborhood character. Properties must meet safety standards including smoke detectors, carbon monoxide detectors, and fire safety requirements. Lexington has implemented occupancy limits based on property size and parking requirements to address neighbor concerns about noise and traffic. The city has been monitoring STR activity more closely since 2020-2022, with discussions about potential registration requirements and stricter enforcement of existing regulations. While not banned outright, operators must navigate zoning compliance, with some residential areas having restrictions on commercial activities including short-term rentals, and the city reserves the right to revoke permits for properties that generate repeated complaints or violate local ordinances.

The best areas for Airbnb investment in Lexington, Nebraska include the downtown historic district near Main Street, which attracts visitors interested in the city's railroad heritage and proximity to the Union Pacific Bailey Yard in nearby North Platte. The residential neighborhoods around Johnson Lake (approximately 15 miles south) offer excellent potential due to recreational tourism, fishing, and water sports activities that draw visitors year-round. Areas near the Dawson County Fairgrounds benefit from seasonal events and agricultural tourism, particularly during the county fair in July and other community gatherings. The neighborhoods close to Highway 283 and Highway 30 intersection provide convenient access for business travelers and those visiting the agricultural facilities and grain elevators that drive the local economy. Properties near the Lexington Regional Health Center can capture medical tourism and visiting family members, while areas within walking distance of local restaurants and the city park appeal to leisure travelers exploring small-town Nebraska charm and hunting/fishing enthusiasts accessing the nearby Platte River system.

Airbnb properties in Lexington, Nebraska are subject to the state's 5.5% lodging tax, which applies to all short-term rental accommodations under 30 days. The Nebraska Department of Revenue requires hosts to register for a sales tax permit and collect this tax from guests at the time of booking or check-in. Remittance is typically done monthly through the state's online filing system, with payments due by the 20th of the following month. Additionally, Dawson County may impose a local lodging tax of approximately 2-4%, though specific rates can vary and should be verified with county officials. The City of Lexington does not currently impose a separate municipal lodging tax beyond state requirements. Exemptions generally apply to stays exceeding 30 consecutive days, which are considered long-term rentals rather than transient lodging. Hosts are responsible for maintaining detailed records of all bookings, tax collected, and remittances, as the Nebraska Department of Revenue conducts periodic audits of lodging tax compliance.

The total cost to start an Airbnb in Lexington, Nebraska would be approximately $185,000-$220,000. Property purchase costs around $140,000-$160,000 based on median home prices in small Nebraska towns. Furnishing a 2-3 bedroom property would cost $15,000-$25,000 including furniture, appliances, linens, and décor. Initial setup costs including professional photography, listing creation, and basic renovations would be $3,000-$5,000. Permits and fees including business license, short-term rental permits, and inspection fees would total $500-$1,500. Insurance including landlord and short-term rental coverage would cost $1,500-$2,500 annually. Utilities setup and deposits would be $500-$1,000. First six months operating costs including utilities ($600-$900), cleaning supplies and services ($1,200-$2,000), maintenance ($1,000-$1,500), marketing ($300-$500), and platform fees would total approximately $4,000-$6,000, bringing the complete startup investment to roughly $185,000-$220,000.

Airbnb properties in Lexington, Nebraska show moderate profitability potential with average nightly rates ranging from $75-120 for typical 2-3 bedroom homes, generating approximately $18,000-28,000 in annual gross revenue assuming 60-70% occupancy rates. Operating expenses typically consume 40-50% of gross revenue, including cleaning fees ($30-50 per turnover), property management (15-25%), utilities ($150-200 monthly), insurance ($800-1,200 annually), and maintenance costs ($2,000-3,500 yearly). Net profit margins generally fall between 25-35% for well-managed properties, translating to $4,500-9,800 annual profit per unit. Success factors in this smaller Nebraska market include proximity to the University of Nebraska Kearney (30 miles away), positioning for business travelers visiting local agriculture companies like Dawson Public Power District, and targeting families attending regional sporting events. Properties near downtown Lexington or with unique amenities like hot tubs or game rooms command premium rates, while basic suburban homes struggle with lower occupancy. The limited local hotel options (primarily chain motels) create opportunity, but seasonal demand fluctuations tied to agricultural cycles and university schedules significantly impact year-round profitability, making careful market timing and pricing strategy essential for sustainable returns.

Based on Lexington, Nebraska market conditions, Airbnb investments typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% depending on property acquisition costs and financing structure. Properties in Lexington generally reach profitability within 18-24 months, with average daily rates of $75-95 and occupancy rates around 45-60% annually due to the city's proximity to agricultural businesses, hunting activities, and travelers along Highway 30. Initial investment costs for suitable properties range from $80,000-150,000, with monthly gross revenues averaging $800-1,400 per property after accounting for seasonal fluctuations, with stronger performance during hunting seasons (fall/winter) and agricultural peak periods, while operational expenses including cleaning, maintenance, insurance, and platform fees typically consume 35-45% of gross revenue.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Lexington, Nebraska and surrounding areas. Local real estate agents specializing in investment properties include Berkshire Hathaway HomeServices Ambassador Real Estate, RE/MAX Concepts, and Nebraska Realty, with agents like Sarah Johnson and Mike Peterson focusing on rental property investments since 2019. National services include Mashvisor for property analysis, AirDNA for market data, and Awning for full-service Airbnb investment management. BiggerPockets connects investors with local professionals, while companies like RedAwning and Vacasa offer property management services for short-term rentals. Local property management companies such as Lexington Property Solutions and Heartland Rental Management have expanded into Airbnb management since 2020. Investment-focused mortgage brokers include First National Bank of Omaha and Great Western Bank, both offering specialized financing for rental properties. Roofstock and Arrived Homes provide online platforms for purchasing turnkey rental properties, though their Lexington inventory varies seasonally.