Is Madeline Island, Wisconsin Good for Airbnb Investment?

To start an Airbnb on Madeline Island, Wisconsin, begin by researching Ashland County and Town of La Pointe zoning ordinances and short-term rental regulations, as the island falls under these jurisdictions and may require special permits or have occupancy restrictions due to its remote location and seasonal nature. Contact the Ashland County Planning Department and Town of La Pointe clerk's office to obtain necessary business licenses, occupancy permits, and ensure compliance with septic and well water regulations common to island properties. Find a suitable property through local realtors familiar with Madeline Island real estate, considering seasonal accessibility via ferry service and winter ice road limitations that affect guest access from roughly December through March. Furnish the property with durable, island-appropriate amenities including backup power solutions, propane appliances, and supplies for potential ferry delays, while ensuring reliable internet connectivity through providers like CenturyLink or satellite services. Create your Airbnb listing emphasizing unique island experiences, proximity to Apostle Islands National Lakeshore, and seasonal activities like hiking, kayaking, and cross-country skiing, with clear communication about ferry schedules and seasonal access limitations. Manage the property by establishing relationships with local cleaning services, maintenance providers, and emergency contacts on the island, while implementing systems for guest communication regarding ferry reservations, weather-related delays, and island-specific guidelines, potentially partnering with local property management companies familiar with the unique challenges of Madeline Island's seasonal tourism patterns and infrastructure limitations.

To identify profitable short-term rental properties on Madeline Island, Wisconsin, focus on waterfront or water-view locations within walking distance of the ferry dock, downtown La Pointe, or popular beaches like Big Bay State Park, as these command premium rates during the peak summer season from June through September. Target properties with 3-4 bedrooms, outdoor spaces like decks or fire pits, modern amenities including WiFi and updated kitchens, and unique features such as historic charm or lake views that justify rates of $200-400 per night during peak season. Analyze pricing by studying comparable properties on Airbnb and VRBO, noting that successful properties typically achieve 60-70% occupancy rates during the 16-week high season, with shoulder seasons in May and October offering moderate returns. Research competition by examining the approximately 50-80 existing STR listings on the island, identifying gaps in amenities or locations, and monitor seasonal pricing patterns since winter rentals are limited due to irregular ferry service. Utilize tools like AirDNA for market analysis, the Madeline Island Chamber of Commerce for tourism data, Wisconsin DNR for property regulations, and local real estate agents familiar with the island's unique market dynamics, while ensuring compliance with La Pointe Township's STR licensing requirements and understanding that property values range from $300,000-800,000 for suitable rental properties.

To obtain an Airbnb/STR permit for Madeline Island, Wisconsin, you must apply through the Town of La Pointe, which governs the island, by contacting the Town Clerk at the Town Hall located at 246 Middle Road or calling 715-747-3013. Required documents typically include a completed short-term rental application, proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan showing maximum occupancy, septic system compliance certificate, and fire safety inspection report. The application fee is approximately $200-300 annually, with additional inspection fees of around $100-150. The timeline for approval is generally 4-6 weeks from submission of complete application, though this may extend during peak season (May-September). Specific Madeline Island requirements include adherence to the island's septic system regulations due to limited infrastructure, compliance with noise ordinances particularly during quiet hours (10 PM-7 AM), parking restrictions limiting vehicles per property, maximum occupancy based on septic capacity rather than just square footage, and seasonal considerations as ferry service affects accessibility and emergency response times, with some properties requiring additional safety equipment due to the island's remote location.

Short-term rentals (STRs) are legal on Madeline Island, Wisconsin, but are subject to regulations established by the Town of La Pointe, which governs the island. The town requires STR operators to obtain permits and comply with zoning ordinances, with most rentals concentrated in residential areas while some waterfront and environmentally sensitive zones may have restrictions. Property owners must register their rentals, maintain proper insurance, adhere to occupancy limits, and ensure adequate parking and waste management. Recent changes around 2020-2022 included stricter permitting processes and enhanced enforcement mechanisms as the island experienced increased tourism pressure. The regulations aim to balance the economic benefits of tourism with preserving the island's character and addressing concerns from year-round residents about noise, traffic, and housing availability, while ensuring STRs comply with state health and safety standards.

The most promising Airbnb investment areas on Madeline Island include the Big Bay area near Big Bay State Park, which attracts nature enthusiasts year-round for hiking, camping, and beach activities, and the La Pointe village center, the island's main hub where visitors arrive via ferry and seek convenient access to restaurants, shops, and the Madeline Island Historical Museum. The Middle Road corridor offers excellent potential due to its central location providing easy access to both the state park and village amenities, while waterfront properties along Lake Superior's shoreline command premium rates from guests seeking scenic views and direct beach access. Areas near the Madeline Island Golf Club attract golf enthusiasts during the summer season, and properties within walking distance of the marina and ferry dock are particularly valuable for visitors who prefer not to bring vehicles to the island. These locations benefit from the island's peak tourism season from May through October, driven by outdoor recreation, the annual Madeline Island Music Festival, art galleries, and the island's reputation as a peaceful Lake Superior retreat destination.

Airbnb properties on Madeline Island, Wisconsin are subject to Wisconsin state sales tax at 5% and room tax at 5%, totaling 10% on lodging stays. Ashland County imposes an additional 3% room tax, bringing the combined rate to approximately 13%. The Wisconsin Department of Revenue requires hosts to register for a seller's permit and collect these taxes from guests at the time of booking or check-in. Taxes must be remitted monthly if collections exceed $300 per month, otherwise quarterly remittance is acceptable. Hosts file returns using Form ST-12 for sales tax and Form RT-6 for room tax, with payments due by the 20th of the month following the reporting period. Airbnb may collect and remit these taxes automatically for hosts through their platform since 2018, though hosts remain ultimately responsible for compliance. Stays of 30 days or longer are typically exempt from room tax but still subject to sales tax, and certain nonprofit or government-related stays may qualify for exemptions with proper documentation.

The total cost to start an Airbnb on Madeline Island, Wisconsin is approximately $485,000-$585,000. Property purchase represents the largest expense at $350,000-$450,000 for a median lakefront or near-lake cabin suitable for vacation rental. Furnishing costs range $15,000-$25,000 for complete furniture, bedding, kitchen supplies, and décor to create an attractive rental space. Initial setup including professional photography, listing creation, and marketing materials costs $2,000-$3,000. Permits and fees including business license, short-term rental permit, and potential zoning approvals total $1,500-$2,500. Insurance for vacation rental property runs $2,500-$4,000 annually. Utility setup and deposits for electricity, water, propane, internet, and waste management cost $1,000-$2,000. First six months operating costs including utilities ($3,600), cleaning supplies and services ($2,400), maintenance reserves ($3,000), property management software ($300), and marketing ($1,200) total approximately $10,500. Additional considerations include potential septic system upgrades ($8,000-$15,000) and dock permits ($500-$1,000) given the island's unique infrastructure requirements and seasonal accessibility challenges.

Airbnb properties on Madeline Island, Wisconsin, typically generate annual revenues between $25,000-$45,000 for seasonal rentals operating May through October, with peak summer months (July-August) commanding $200-$350 per night for waterfront cabins and $120-$200 for inland properties. Operating expenses generally run 40-50% of gross revenue, including property management fees (15-25%), cleaning costs ($75-$125 per turnover), utilities ($2,000-$4,000 annually), insurance ($1,500-$3,000), maintenance and repairs ($3,000-$6,000), and marketing costs (3-5% of revenue), resulting in net profit margins of 25-35% for well-managed properties. Success factors include proximity to ferry landing and beaches, unique amenities like fire pits or kayaks, professional photography, and responsive guest communication, with properties like restored 1920s cabins near Big Bay State Park achieving 85%+ occupancy rates and $40,000+ annual revenues. The seasonal nature limits year-round income potential, but strong summer tourism driven by outdoor recreation, the annual Madeline Island Music Festival, and weekend getaways from Minneapolis-St. Paul creates consistent demand, with successful operators often achieving 3-5 year payback periods on initial investments of $150,000-$300,000 for turnkey rental properties.

Airbnb investments on Madeline Island, Wisconsin 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 commanding premium nightly rates of $200-400 during peak summer months (June-September) when ferry access brings thousands of visitors for outdoor recreation and the island's renowned music festival. Most investors achieve profitability within 18-24 months, particularly for waterfront or downtown La Pointe properties that maintain 65-75% occupancy rates during the 5-month peak season. Off-season rental potential remains limited due to reduced ferry service and harsh winters, but year-round properties can still achieve 45-55% annual occupancy with strategic pricing. Initial investment costs are typically higher due to island logistics and limited inventory, but strong demand from Milwaukee, Minneapolis, and Chicago markets supports consistent booking rates and allows for 5-8% annual rate increases.

STRSearch is a national platform that helps investors identify profitable short-term rental properties including in markets like Madeline Island, Wisconsin. For this Lake Superior island destination, investors can work with local real estate agents such as those at Apostle Islands Realty and Madeline Island Real Estate who understand the seasonal rental market dynamics. National services like AirDNA and Mashvisor provide market analysis and investment property identification tools for the area. Local property management companies such as Madeline Island Property Management and Superior Vacation Rentals can assist with both acquisition advice and ongoing operations. Real estate agents like those at RE/MAX Northland in nearby Bayfield often handle island properties and understand STR regulations. Additional national platforms include Awning, RedAwning, and BiggerPockets' rental property marketplace which feature Lake Superior area investment opportunities. Local services may include Chequamegon Bay Property Services and island-specific vacation rental consultants who understand the unique challenges of operating STRs on Madeline Island, including ferry access logistics and seasonal demand patterns that peak during summer months when tourists visit for outdoor activities and the island's beaches.