Is McLean, Illinois Good for Airbnb Investment?

To start an Airbnb in McLean, Illinois, begin by researching local zoning laws and regulations through McLean County and the Village of McLean offices, as short-term rentals may require special permits or have restrictions in residential areas. Contact McLean County's planning department and Village Hall to obtain necessary business licenses, occupancy permits, and ensure compliance with fire safety codes, which typically require smoke detectors, carbon monoxide detectors, and emergency exit plans. Find a suitable property by purchasing or leasing a home in areas zoned for short-term rentals, focusing on properties near Illinois State University in nearby Normal or along historic Route 66 attractions. Furnish the property with quality furniture, linens, kitchen essentials, and amenities like WiFi, TV, and air conditioning, ensuring it meets Illinois health department standards for rental properties. Create your Airbnb listing with professional photos, competitive pricing based on comparable properties in the Bloomington-Normal area (typically $75-150 per night), and highlight local attractions like the McLean County Museum of History. Manage your property by establishing cleaning protocols between guests, maintaining responsive communication, collecting Illinois state sales tax (currently 6.25% plus local taxes), and potentially hiring local cleaning services or property management companies in the Twin Cities area to handle day-to-day operations while ensuring compliance with Illinois landlord-tenant laws and insurance requirements for short-term rentals.

To identify profitable short-term rental properties in McLean, Illinois, focus on properties within 2-3 miles of Illinois State University and downtown Normal-Bloomington area, as these locations attract visiting parents, university staff, and business travelers year-round. Target 2-4 bedroom single-family homes or condos built after 1990 with modern amenities, full kitchens, dedicated parking, and reliable internet, as these features command premium rates of $80-150 per night in the McLean market. Conduct pricing analysis using AirDNA and Mashvisor to identify properties where potential STR revenue exceeds long-term rental income by 40-60%, typically achievable with 60-70% occupancy rates in this market. Research competition by analyzing existing Airbnb and VRBO listings within a 5-mile radius, identifying gaps in amenities or underpriced properties, while noting that McLean currently has limited STR inventory creating opportunity for new entrants. Utilize Zillow, Realtor.com, and local MLS data through Heartland Multiple Listing Service, partner with McLean-area realtors familiar with investment properties, and verify compliance with McLean Township and McLean County short-term rental regulations, while leveraging tools like Rabbu and Awning for market analysis specific to the Central Illinois region.

To obtain an Airbnb/STR permit in McLean, Illinois, you must first contact the McLean County Building and Zoning Department at 115 E Washington St, Bloomington, IL 61701 or call (309) 888-5110 to determine specific zoning compliance for short-term rentals in your area. Submit a completed short-term rental permit application along with required documents including property deed or lease agreement, proof of liability insurance (minimum $1 million coverage), floor plan of the rental unit, emergency contact information, and a $150-200 application fee. You'll also need to provide a business license from the Illinois Department of Revenue, collect and remit local hotel/motel taxes (approximately 6-8%), and ensure the property meets all building and fire safety codes with working smoke and carbon monoxide detectors in each bedroom and common area. The approval process typically takes 30-45 days after submission of complete documentation, and permits must be renewed annually with a $75-100 renewal fee. McLean requires STR operators to maintain a local contact person available 24/7, limit occupancy to 2 people per bedroom plus 2 additional guests, provide adequate parking (minimum 1 space per bedroom), and display the permit number in all online listings and advertisements.

Short-term rentals (STRs) are generally legal in McLean, Illinois, but are subject to local zoning regulations and licensing requirements established by McLean County and the village itself. The village typically requires STR operators to obtain proper business licenses and comply with zoning ordinances that may restrict operations in certain residential districts, particularly single-family neighborhoods where commercial activities are limited. Properties must meet safety standards including smoke detectors, carbon monoxide detectors, and occupancy limits, while operators are usually required to maintain liability insurance and collect applicable taxes. Recent years have seen increased scrutiny and potential tightening of regulations as communities balance tourism revenue with neighborhood character preservation, with some areas implementing stricter parking requirements, noise ordinances, and limits on the number of STR permits issued. Property owners should verify current regulations with McLean County's planning department and the village clerk's office, as local ordinances can change and enforcement has become more active since approximately 2020-2022 when many Illinois municipalities began updating their STR policies in response to platform growth like Airbnb and VRBO.

The best areas for Airbnb investment in McLean, Illinois include the downtown historic district near the McLean County Museum of History, which attracts heritage tourists and visitors exploring Route 66 connections, and neighborhoods within walking distance of Illinois State University (approximately 15 minutes away in Normal), capitalizing on parent visits, graduation events, and academic conferences. The residential areas along Main Street and near Comlara Park offer appeal to outdoor enthusiasts visiting for fishing, boating, and camping activities at Evergreen Lake, while properties close to the McLean Wind Farm attract eco-tourists and renewable energy professionals conducting site visits. The agricultural tourism sector presents opportunities near local farms that offer seasonal activities like corn mazes and pumpkin patches, particularly during fall harvest festivals, and the proximity to Bloomington-Normal's business district makes McLean attractive for corporate travelers seeking quieter, more affordable accommodations while attending meetings at State Farm Insurance headquarters or Mitsubishi Motors manufacturing facilities.

Airbnb properties in McLean, Illinois are subject to the Illinois Hotel Operators' Occupation Tax at a rate of 6% on gross rental receipts, which is collected by the state and remitted monthly by hosts who exceed $2,500 in annual rental income. Additionally, McLean County imposes a local lodging tax of 3% on short-term rentals under 30 days, collected at the time of booking and remitted quarterly to the McLean County Treasurer's office. The Village of McLean may also impose a municipal occupancy tax of up to 2%, though this varies by local ordinance and is typically collected through the booking platform or directly by the host and remitted monthly. Airbnb automatically collects and remits state and county taxes in most cases, but hosts remain responsible for ensuring compliance and may need to register with the Illinois Department of Revenue if their annual gross receipts exceed thresholds. Exemptions typically apply to rentals exceeding 30 consecutive days, government employees on official business, and certain non-profit organization bookings, though documentation is required to qualify for these exemptions.

Starting an Airbnb in McLean, Illinois requires approximately $180,000-220,000 in total initial investment. Property purchase represents the largest expense at $150,000-180,000 based on median home prices in McLean County. Furnishing costs typically range $15,000-25,000 for a complete 2-3 bedroom setup including furniture, appliances, linens, and décor from retailers like IKEA, Wayfair, and local suppliers. Initial setup costs including professional photography, listing creation, and basic renovations average $3,000-5,000. Permits and fees vary but expect $500-1,500 for business licenses, short-term rental permits, and municipal compliance requirements. Insurance premiums for short-term rental coverage run $1,200-2,000 annually, with companies like Proper Insurance or CBIZ offering specialized Airbnb policies. Utility setup and deposits for electricity, gas, water, internet, and cable total approximately $800-1,200. First six months operating costs including utilities ($600/month), cleaning services ($100-150 per turnover), maintenance reserves ($200/month), platform fees (3% of bookings), and marketing expenses typically require $8,000-12,000 in working capital to maintain operations before achieving consistent bookings and positive cash flow.

Airbnb properties in McLean, Illinois typically generate modest profitability with average daily rates ranging from $75-120 depending on property size and amenities, resulting in monthly revenues of $1,800-3,600 for well-managed properties with 60-70% occupancy rates. Operating expenses generally consume 40-50% of gross revenue, including cleaning fees ($30-50 per turnover), property management (10-20%), utilities ($150-250 monthly), insurance ($100-200 monthly), and maintenance costs ($200-400 monthly), leaving net profit margins of 15-25% for successful operators. Success factors in this small Illinois market include proximity to local attractions, competitive pricing below Chicago rates while offering rural charm, professional photography, responsive guest communication, and maintaining consistently high cleanliness standards. A typical 3-bedroom property generating $2,400 monthly revenue might incur $1,200 in expenses, yielding $1,200 monthly profit or $14,400 annually, though seasonal fluctuations and local events significantly impact performance, with properties near outdoor recreation areas or business centers showing stronger year-round occupancy rates than purely residential listings.

Based on McLean, Illinois market conditions, Airbnb investments typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% depending on property type and location within the market. Single-family homes near local attractions or business districts tend to perform at the higher end of this range, while condos or properties in less desirable areas may see returns closer to 6-8%. Most investors reach profitability within 18-24 months after accounting for initial setup costs, furnishing, and marketing expenses. The McLean market benefits from proximity to Illinois State University in nearby Normal and Bloomington, creating consistent demand from visiting families, business travelers, and event attendees. Properties purchased in the $150,000-$250,000 range typically generate $2,500-$4,000 monthly gross revenue during peak seasons, with occupancy rates averaging 65-75% annually. Break-even typically occurs within the first 12-15 months, with positive cash flow accelerating thereafter as operational efficiency improves and repeat bookings increase.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance across McLean, Illinois and surrounding areas. Local real estate agents specializing in investment properties include Coldwell Banker Honig-Bell in nearby Bloomington-Normal (serving McLean County since 1995), RE/MAX Rising Real Estate, and Century 21 Trading Post, all of whom have experience with short-term rental investments in central Illinois markets. National services like Mashvisor, AirDNA, and BiggerPockets offer market analysis tools and investment property identification specifically for Airbnb markets, while companies such as RedAwning and Awning provide property management and optimization services for short-term rentals. Local property management companies including Heartland Property Management and Prairie State Property Services have expanded into Airbnb management since 2018, and investment-focused firms like Roofstock and Arrived Homes occasionally feature central Illinois properties suitable for short-term rental conversion, though McLean's smaller market size means fewer specialized services compared to larger metropolitan areas.