Is Marshalltown, Iowa Good for Airbnb Investment?

To start an Airbnb in Marshalltown, Iowa, begin by researching local zoning laws and regulations through the Marshalltown City Planning Department, as Iowa generally allows short-term rentals but municipalities may have specific requirements including business licenses, occupancy permits, and tax registration with the Iowa Department of Revenue for state sales tax collection. Contact Marshall County for any county-specific regulations and ensure compliance with fire safety codes through the Marshalltown Fire Department. Find a suitable property by working with local real estate agents like Coldwell Banker or RE/MAX offices in Marshalltown, focusing on areas near downtown or close to attractions like the Historic Marshalltown courthouse or Central Iowa Expo. Obtain necessary permits including a business license from Marshalltown City Hall (typically $25-50 annually), register for Iowa sales tax collection, and ensure the property meets building and fire codes with proper smoke detectors, carbon monoxide detectors, and emergency exits. Furnish the property with quality furniture from local stores like Furniture Row or online retailers, ensuring full kitchen amenities, comfortable bedding, Wi-Fi, and local guidebooks featuring Marshalltown attractions. Create your Airbnb listing with professional photos highlighting unique features and proximity to Iowa Veterans Home, Grimes Farm, or the Iowa River, setting competitive rates based on comparable properties in central Iowa markets. 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 keeping detailed records for tax purposes while collecting and remitting the required Iowa state sales tax and any local lodging taxes to Marshall County.

To identify profitable short-term rental properties in Marshalltown, Iowa, focus on locations within walking distance of Iowa Valley Community College, near the historic downtown district around Main Street, or close to major employers like JBS Swift & Company and Fisher Controls. Target 2-4 bedroom single-family homes or duplexes built after 1950 with updated kitchens, reliable Wi-Fi capability, parking spaces, and outdoor areas that appeal to business travelers and visiting families. Conduct pricing analysis by researching comparable Airbnb listings in Marshalltown and surrounding areas like Ames (30 minutes away), aiming for nightly rates between $75-120 while keeping acquisition costs under $150,000 to maintain healthy profit margins. Research competition using AirDNA, Mashvisor, and direct Airbnb searches to identify gaps in the market, particularly focusing on properties that cater to extended-stay business guests and families visiting the college. Utilize tools like BiggerPockets for investment analysis, Zillow and Realtor.com for property searches, STR Helper for performance tracking, and connect with local real estate agents familiar with Marshall County's rental regulations and zoning requirements to ensure compliance with city ordinances before purchasing.

To obtain an Airbnb/STR permit in Marshalltown, Iowa, contact the Marshalltown City Hall at 24 N Center Street or call (641) 754-5700 to inquire about short-term rental licensing requirements, as the city may have implemented regulations around 2020-2022 following statewide trends. You'll likely need to submit a completed application form, provide proof of property ownership or lease agreement, submit a site plan or floor plan of the rental unit, obtain a certificate of occupancy, provide proof of liability insurance (typically $1 million minimum), and pass safety inspections including smoke and carbon monoxide detectors. Required documents typically include a valid Iowa driver's license, property deed or lease, tax records, and emergency contact information for a local representative available 24/7. Application fees generally range from $100-300 initially with annual renewal fees of $50-150, and the process typically takes 30-60 days from submission to approval. Marshalltown likely requires compliance with residential zoning restrictions, limits on the number of guests and vehicles, noise ordinances, and may restrict STRs in certain residential districts while requiring permits to be visibly posted and maintaining guest registries for city inspection.

Short-term rentals (STRs) are generally legal in Marshalltown, Iowa, as the city has not enacted specific prohibitions against vacation rental properties. However, STR operators must comply with standard zoning regulations, business licensing requirements, and health and safety codes that apply to all rental properties in the city. Properties used as short-term rentals are typically required to obtain proper business licenses and may need to meet specific occupancy and safety standards. The city follows Iowa state regulations regarding rental properties, which include basic habitability requirements and tax obligations. There are no specific prohibited areas for STRs within Marshalltown's city limits, though properties must comply with existing residential zoning restrictions. Recent legal changes have been minimal, with the city maintaining a relatively permissive approach to short-term rentals while ensuring they meet the same standards as traditional rental properties. Property owners should verify current licensing requirements with the city clerk's office and ensure compliance with state tax collection requirements for short-term rental income.

The best areas for Airbnb investment in Marshalltown, Iowa include the Historic Downtown District near Main Street, which attracts visitors to the Marshall County Courthouse, local festivals, and the Iowa River Trail system. The area around Iowa Valley Community College draws consistent demand from visiting families, prospective students, and academic conference attendees. The neighborhoods near Marshalltown Community School District and Fisher Controls International (Emerson) facilities capture business travelers and relocated employees. The residential areas close to Central Park and the Marshalltown Arts & Civic Center benefit from cultural events, summer concerts, and recreational activities. Properties within walking distance of the BNSF Railway corridor appeal to railroad workers and transportation industry professionals who require temporary housing. The vicinity of MercyOne Central Iowa Medical Center generates demand from medical tourists, patient families, and traveling healthcare professionals, making it a reliable market for short-term rentals throughout the year.

Airbnb properties in Marshalltown, Iowa are subject to Iowa's state lodging tax of 7% on gross receipts from rental accommodations, which applies to stays of 31 days or less. The tax is collected by the accommodation provider and must be remitted monthly to the Iowa Department of Revenue by the last day of the following month using Form IA 44-005. Marshalltown itself does not impose a separate local lodging or occupancy tax as of 2023, so Airbnb hosts only need to collect and remit the state tax. The tax applies to the total rental amount charged to guests, including cleaning fees and other service charges, but excludes separately stated sales tax. Exemptions include rentals to permanent residents (stays over 31 consecutive days) and accommodations provided to certain government employees on official business. Airbnb may collect and remit these taxes automatically for hosts through their platform in Iowa, but hosts remain ultimately responsible for ensuring compliance and should verify that taxes are being properly collected and remitted.

To start an Airbnb in Marshalltown, Iowa, expect total costs of approximately $95,000-$115,000. Property purchase costs around $75,000-$85,000 based on median home prices in the area. Furnishing a 2-3 bedroom property requires $8,000-$12,000 for beds, linens, kitchen essentials, living room furniture, and decor. Initial setup including professional photography, listing creation, and basic renovations costs $2,000-$3,500. Permits and fees including business license, short-term rental permit, and inspection fees total $300-$800. Insurance for short-term rental coverage adds $1,200-$1,800 annually. Utility deposits and connections for electricity, gas, water, internet, and cable cost $500-$800. First six months operating costs including utilities ($180/month), cleaning supplies ($50/month), maintenance reserves ($100/month), property management software ($30/month), and marketing ($50/month) total approximately $2,460. Additional considerations include potential HOA fees, property taxes, and emergency repair funds which could add $2,000-$4,000 to initial costs.

Airbnb properties in Marshalltown, Iowa typically generate modest returns with average daily rates ranging from $65-85 and occupancy rates around 45-55% annually, resulting in gross revenues of $10,000-15,000 per year for a typical 2-bedroom property. Operating expenses including cleaning fees ($25-35 per turnover), utilities ($150-200 monthly), insurance ($800-1,200 annually), property management (15-25% of revenue), and maintenance costs typically consume 60-70% of gross revenue, leaving net profit margins between 15-25%. Success factors in this market include proximity to Iowa Valley Community College, competitive pricing below Des Moines rates, strong local photography showcasing Iowa hospitality, and targeting business travelers and family visitors to the area. A case study of a renovated 1920s home near downtown Marshalltown showed annual gross revenue of $12,800 with $8,900 in expenses, yielding a 30% profit margin, while properties further from the city center typically see 10-15% lower performance due to reduced demand from the limited tourist and business traveler market in this smaller Iowa community of approximately 27,000 residents.

Based on Marshalltown, Iowa 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 renovation requirements. Properties in downtown Marshalltown near the courthouse square and historic district command higher nightly rates of $75-95, while suburban locations average $60-80 per night with 55-65% occupancy rates annually. Initial profitability usually occurs within 18-24 months, factored against average property purchase prices of $80,000-120,000 and renovation costs of $15,000-25,000 for competitive listings. The market benefits from Iowa Valley Community College visitors, business travelers to Fisher Controls and Lennox International facilities, and tourism related to the Historic Marshalltown courthouse and nearby state parks, though seasonal fluctuations impact winter occupancy rates by 20-30% compared to summer peaks.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Marshalltown, Iowa. Local real estate agents specializing in investment properties include Coldwell Banker Hedges Realty Group and RE/MAX Concepts, both with agents experienced in rental property investments. Nationally, companies like Awning, RedAwning, and Vacasa offer end-to-end services from property acquisition to management for short-term rental investors. AirDNA and Mashvisor provide market analytics and property search tools specifically for Airbnb investments, while local property management companies such as Iowa Property Management Group can assist with ongoing operations. Real estate investment firms like Roofstock and Fundrise have expanded into short-term rental markets, and platforms like BiggerPockets connect investors with local professionals. Century 21 and Keller Williams offices in the Des Moines metro area, approximately 50 miles from Marshalltown, also have agents specializing in investment properties who serve the central Iowa market.