Is Milaca, Minnesota Good for Airbnb Investment?

To start an Airbnb in Milaca, Minnesota, begin by researching local zoning laws and regulations through the Milaca City Hall (320-983-2161) as the city may require business licenses or have specific short-term rental ordinances, though many smaller Minnesota cities have minimal restrictions as of 2023. Contact Mille Lacs County for any county-level permits and check homeowner association rules if applicable. Find a suitable property by searching MLS listings through local realtors like Coldwell Banker or RE/MAX agents familiar with the Milaca area, focusing on properties near Mille Lacs Lake or downtown attractions with good access to Highway 169. Obtain necessary permits including a Minnesota sales tax permit through the Department of Revenue since short-term rentals are subject to state lodging taxes, and potentially a local business license from Milaca City Hall. Furnish the property with quality furniture from retailers like Ashley HomeStore in nearby St. Cloud or online through Wayfair, ensuring you include essentials like linens, kitchen supplies, WiFi, and local amenities information. Create your Airbnb listing with professional photos highlighting proximity to Mille Lacs Lake activities, fishing, and local attractions like the Mille Lacs Indian Museum, pricing competitively around $80-150 per night based on seasonal demand. Manage the property by establishing cleaning protocols, possibly hiring local cleaning services, installing keyless entry systems, and maintaining responsive communication with guests while monitoring reviews and adjusting pricing seasonally to capitalize on summer lake tourism and winter ice fishing seasons.

To identify profitable short-term rental properties in Milaca, Minnesota, focus on properties within 1-2 miles of Mille Lacs Lake shoreline, particularly near popular fishing access points and boat launches, as this area attracts year-round tourism for fishing, hunting, and lake activities. Target 2-4 bedroom cabins or homes with lake views, waterfront access, boat storage, fishing cleaning stations, and outdoor amenities like fire pits, decks, and hot tubs that appeal to fishing enthusiasts and families. Analyze pricing by researching comparable Airbnb and VRBO listings within 10 miles, noting seasonal rate variations with peak summer rates ($150-300/night) and ice fishing season premiums (December-February), while considering lower spring/fall rates ($80-150/night). Research competition using AirDNA, STR Helper, or manual searches on booking platforms to identify supply gaps, particularly properties that cater to fishing groups or offer unique amenities like pontoon rentals or guided services. Utilize tools like Mashvisor, BiggerPockets calculators, and local MLS data through Edina Realty or RE/MAX agents familiar with the Mille Lacs area, while connecting with the Milaca Chamber of Commerce and local tourism boards for market insights, seasonal trends, and upcoming developments that could impact demand.

To obtain an Airbnb/STR permit in Milaca, Minnesota, contact the Milaca City Hall at 145 Central Avenue South or call (320) 983-2161 to begin the application process, as the city likely requires a conditional use permit or business license for short-term rentals. You'll need to submit a completed application form, property deed or lease agreement, floor plan of the rental unit, proof of insurance with minimum $1 million liability coverage, contact information for a local property manager if you're not local, and pay an estimated application fee of $150-300. Additional requirements may include maintaining a guest registry, providing adequate parking spaces, ensuring compliance with fire safety codes, limiting occupancy to 2 people per bedroom plus 2 additional guests, and obtaining neighbor notification within 200 feet of the property. The approval process typically takes 4-6 weeks after submission of complete documentation, and you may need to attend a city council meeting for final approval. Annual renewal fees of approximately $100-200 are common, and you must also register with the Minnesota Department of Revenue for tax collection purposes and maintain compliance with state lodging tax requirements.

Short-term rentals (STRs) in Milaca, Minnesota are generally legal but subject to local regulations and state oversight. As of 2023, Minnesota requires STR operators to register with the state and collect lodging taxes, while Milaca, a small city in Mille Lacs County, typically follows county and state guidelines rather than having extensive municipal STR ordinances due to its size. The city may require basic business licenses and compliance with zoning regulations, particularly distinguishing between residential and commercial areas. Recent Minnesota legislation has strengthened registration requirements and tax collection enforcement statewide, affecting operators in smaller communities like Milaca. Property owners should verify current zoning compliance, obtain necessary permits, and ensure proper tax registration with both state and local authorities, as enforcement has increased following legislative changes in 2021-2022 that standardized STR oversight across Minnesota municipalities.

The best areas for Airbnb investment in Milaca, Minnesota include the downtown historic district near Main Street, which attracts visitors interested in the city's heritage and local events like the annual Fun Days celebration, and properties near Mille Lacs Lake's southern shores, approximately 15 miles north, which draw fishing enthusiasts, boaters, and summer tourists year-round. The residential neighborhoods around Milaca High School and near Highway 169 offer good potential due to their proximity to youth sports tournaments and visiting families, while properties within walking distance of the Milaca Community Hospital can capture medical tourism and visiting family members. Areas near the Rum River and local parks like Memorial Park are attractive for outdoor recreation visitors, hunters during fall seasons, and those attending local fishing tournaments, with the region's proximity to the Twin Cities (about 90 minutes south) making it accessible for weekend getaways and corporate retreats seeking rural settings.

In Milaca, Minnesota, Airbnb hosts are subject to Minnesota state sales tax of 6.875% on lodging rentals, which applies to stays of less than 30 consecutive days. The state requires hosts to register for a sales tax permit and collect tax from guests at the time of booking, with remittance due monthly if annual tax liability exceeds $500, or annually for smaller operators. Mille Lacs County imposes an additional lodging tax of approximately 3% on short-term rentals, collected similarly to state tax and remitted quarterly to the county. The City of Milaca may impose local lodging taxes up to 3%, though specific rates vary by municipal ordinance and are typically collected through the same registration system. Airbnb can collect and remit these taxes automatically for hosts who opt into their tax collection service, which covers Minnesota state sales tax and participating local jurisdictions. Exemptions generally apply to stays of 30 days or longer, certain government and nonprofit travelers, and in some cases, weekly or monthly rentals depending on local ordinances. Hosts must maintain detailed records of all bookings, tax collected, and payments made, with penalties for non-compliance ranging from interest charges to significant fines imposed by the Minnesota Department of Revenue.

The total cost to start an Airbnb in Milaca, Minnesota is approximately $185,000-$225,000. Property purchase costs around $150,000-$180,000 based on median home prices in rural Minnesota markets. Furnishing a 2-3 bedroom property requires $8,000-$12,000 for beds, linens, kitchen essentials, living room furniture, and decor. Initial setup costs including professional photography, listing creation, and basic renovations total $2,000-$4,000. Permits and fees including business license, short-term rental permit, and tax registrations cost $300-$800. Insurance premiums for short-term rental coverage run $1,200-$2,000 annually. Utility deposits and connections for electricity, gas, water, internet, and cable cost $500-$800. First six months operating costs including utilities ($600/month), cleaning supplies ($100/month), maintenance reserves ($200/month), property management software ($50/month), and marketing ($100/month) total approximately $6,300. Additional considerations include potential HOA fees, property taxes, and emergency repair funds which could add $3,000-$5,000 to initial startup costs.

Airbnb properties in Milaca, Minnesota typically generate modest returns due to the small-town market dynamics, with average nightly rates ranging from $75-120 for entire homes and occupancy rates around 40-55% annually. Revenue for a typical 2-3 bedroom property averages $12,000-18,000 per year, while expenses including mortgage payments, utilities, cleaning fees, insurance, and maintenance typically run $8,000-14,000 annually, resulting in net profit margins of 15-25% for most operators. Success factors in this rural Minnesota market include proximity to Mille Lacs Lake recreational activities, competitive pricing during peak summer and ice fishing seasons, and maintaining high cleanliness standards to attract repeat visitors from the Twin Cities metro area. Properties within walking distance of the lake or featuring amenities like fire pits, boat access, or fishing equipment storage tend to achieve 20-30% higher occupancy rates, with some lakefront cabins reaching $150+ per night during peak summer weekends and generating annual revenues exceeding $25,000, though these premium properties also carry higher acquisition and maintenance costs that can impact overall profitability.

Based on Milaca, Minnesota 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 Milaca, located near Mille Lacs Lake, benefit from seasonal tourism and fishing activities, with average daily rates of $85-120 during peak summer months (May-September) and $60-85 during off-season. Initial profitability usually occurs within 18-24 months, assuming 55-65% annual occupancy rates and property acquisition costs between $150,000-250,000 for suitable vacation rental properties. The market shows stronger performance for lakefront or lake-access properties, which can achieve the higher end of ROI ranges, while in-town properties typically perform at the lower end of these projections.

STRSearch is a national platform that helps investors identify profitable short-term rental properties across markets including Milaca, Minnesota. AirDNA provides market data and analytics for Airbnb investments in the Milaca area, while Mashvisor offers property analysis tools for Minnesota vacation rental markets. Local real estate agents like those at Coldwell Banker Realty and RE/MAX Results in nearby St. Cloud and Princeton serve the Milaca market and can assist with Airbnb property acquisitions. Century 21 and Keller Williams agents in the greater Mille Lacs County area also work with investors seeking vacation rental properties. RedAwning and Vacasa provide property management services for Airbnb hosts in central Minnesota markets including Milaca. BiggerPockets connects investors with local professionals familiar with the Milaca short-term rental market, while Roofstock and HomeUnion focus on turnkey rental property investments that could include vacation rentals in Minnesota lake communities. Local property management companies like Lake Country Property Management and Central Minnesota Property Services can assist with Airbnb operations in the Milaca region.