Is Orr, Minnesota Good for Airbnb Investment?

To start an Airbnb in Orr, Minnesota, begin by researching local zoning laws and regulations through St. Louis County planning department, as Orr typically falls under county jurisdiction rather than having its own municipal short-term rental ordinances. Contact the county clerk's office to determine if special permits or business licenses are required, and check if there are occupancy limits or parking requirements. Find a suitable property by searching local real estate listings or consider converting an existing home, ensuring it meets Minnesota's building codes and has adequate septic and well systems common in rural areas. Obtain necessary permits including a Minnesota sales tax permit since short-term rentals are subject to state lodging taxes, and register with the Minnesota Department of Revenue. Furnish the property with essential amenities like linens, towels, kitchen supplies, and outdoor gear that appeals to visitors coming for fishing, hunting, or accessing the nearby Boundary Waters Canoe Area Wilderness. Create your Airbnb listing with high-quality photos highlighting the natural surroundings and proximity to Pelican Lake and outdoor activities. Set competitive pricing by researching similar properties in the Orr and Tower-Soudan area, typically ranging from $80-150 per night depending on size and amenities. Manage the property by establishing cleaning protocols between guests, creating a guidebook with local recommendations for restaurants like Zup's grocery store and nearby attractions, and maintaining responsive communication with guests while ensuring compliance with Minnesota's innkeeper liability laws and maintaining appropriate insurance coverage.

To identify profitable short-term rental properties in Orr, Minnesota, focus on waterfront locations near Pelican Lake, Crane Lake, or other area lakes, as well as properties within 10-15 minutes of Voyageurs National Park entrance points, since this remote town of approximately 250 residents primarily attracts outdoor recreation tourists. Target 2-4 bedroom cabins or homes with amenities like boat launches, docks, fire pits, hot tubs, and winterized heating systems for year-round operation, particularly properties built after 1980 with updated electrical and plumbing systems. Pricing analysis should consider seasonal variations with peak rates of $150-300/night during summer fishing season (May-September) and winter activities (December-March), while shoulder seasons may see $75-150/night, with annual occupancy rates typically ranging 40-60% due to the remote location. Competition research reveals limited STR inventory with perhaps 15-25 active listings within a 20-mile radius, primarily concentrated around major lakes and park access points, creating opportunities for well-positioned properties. Utilize AirDNA for market data, contact St. Louis County for zoning regulations and permit requirements, monitor Airbnb and VRBO for competitor pricing and availability, use Google Maps and Minnesota DNR lake finder tools to identify prime waterfront locations, and connect with local realtors like Edina Realty or RE/MAX who understand the Arrowhead region's recreational property market dynamics.

To obtain an Airbnb/STR permit in Orr, Minnesota, you must first contact the City of Orr clerk's office at City Hall located at 4429 Highway 53, Orr, MN 55771, or call (218) 757-3288 to request a short-term rental license application. Required documents typically include a completed application form, proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental unit, septic system compliance certificate if applicable, and a $150-200 application fee paid by check or money order. You must also provide contact information for a local property manager if you live more than 50 miles away, submit to annual inspections by the fire marshal and building inspector, and ensure compliance with Minnesota Department of Health regulations for vacation rentals including water testing if using a private well. The application process typically takes 30-45 days for review and approval, during which time city staff will conduct an initial inspection of the property to verify it meets safety codes, zoning requirements, and has adequate parking for guests. Once approved, the permit must be renewed annually with a $75-100 renewal fee, and you must maintain guest registration logs, post emergency contact information prominently in the rental unit, and comply with noise ordinances and occupancy limits as specified in your permit.

Short-term rentals (STRs) are generally legal in Orr, Minnesota, as the city does not have specific municipal ordinances prohibiting them, though they must comply with state regulations and local zoning requirements. Minnesota state law allows STRs but requires hosts to collect and remit state sales tax and lodging tax, and properties must meet basic safety standards including smoke and carbon monoxide detectors. Orr, being a small city in St. Louis County with approximately 300 residents, primarily follows county zoning regulations which typically allow vacation rentals in residential areas, though operators should verify compliance with any applicable homeowners association rules or deed restrictions. The city has not implemented recent changes specifically targeting STRs, unlike larger Minnesota cities such as Minneapolis and St. Paul which have enacted stricter licensing and registration requirements since 2020-2022. Property owners in Orr should ensure they have proper insurance coverage and comply with the Minnesota Department of Revenue's registration requirements for lodging tax collection, particularly given the area's popularity for fishing and outdoor recreation tourism.

The best areas for Airbnb investment in Orr, Minnesota are primarily concentrated around Lake Vermilion's shoreline neighborhoods, particularly the areas near Crane Lake Road and Highway 53 corridors, which offer prime access to the Boundary Waters Canoe Area Wilderness and attract thousands of outdoor enthusiasts annually for fishing, canoeing, and wilderness camping from May through October. The downtown Orr district near the visitor center provides excellent opportunities due to its proximity to restaurants, outfitters, and the famous Vince Shute Wildlife Sanctuary, drawing bear-watching tourists and nature photographers during summer months. Properties along the Echo Trail (County Road 116) are highly desirable as this scenic route serves as a gateway to multiple BWCA entry points and remote fishing lakes, making it attractive to serious anglers and wilderness adventurers willing to pay premium rates for convenient access. The residential areas near Pelican Lake and Shagawa Lake offer strong rental potential due to their appeal to families seeking lake cabin experiences without the isolation of deeper wilderness properties, while still providing easy access to Ely's additional amenities just 20 miles south, creating year-round demand from both summer recreationalists and winter snowmobilers, cross-country skiers, and ice fishermen.

Airbnb properties in Orr, Minnesota are subject to Minnesota's state lodging tax of 3% on gross receipts, which applies to all short-term rental accommodations under 30 days. St. Louis County, where Orr is located, imposes an additional lodging tax of approximately 3-4% on short-term rentals. The City of Orr may also levy a local lodging or transient occupancy tax, typically ranging from 2-5%, though smaller municipalities sometimes opt out of additional local taxes. These taxes are generally collected by the host at the time of booking and must be remitted to the appropriate tax authorities - state taxes to the Minnesota Department of Revenue monthly or quarterly depending on volume, county taxes to St. Louis County, and any municipal taxes to the City of Orr. Airbnb may collect and remit some of these taxes automatically through their platform for certain jurisdictions, but hosts remain responsible for ensuring compliance with all applicable tax obligations. Exemptions typically include stays of 30 days or longer, which are considered long-term rentals rather than transient lodging, and accommodations provided to certain government employees or during specific circumstances as defined by state and local tax codes.

To start an Airbnb in Orr, Minnesota, expect total costs around $180,000-$220,000. Property purchase represents the largest expense at approximately $150,000-$180,000 for a median-priced cabin or lake home suitable for short-term rentals in this rural area near Voyageurs National Park. Furnishing costs typically range $8,000-$12,000 for a complete setup including beds, linens, kitchen essentials, living room furniture, and outdoor gear appropriate for the region's fishing and recreation tourism. Initial setup costs including professional photography, listing creation, and marketing materials run $500-$1,000. Permits and fees vary but budget $300-$800 for business licenses, short-term rental permits, and any required inspections from St. Louis County. Insurance specifically for short-term rentals costs $1,200-$2,000 annually. Utilities including electricity, water, sewer, internet, and seasonal heating average $200-$350 monthly in this climate. First six months of operating costs including utilities ($1,200-$2,100), cleaning supplies and services ($600-$1,200), maintenance reserves ($1,000), platform fees, and miscellaneous expenses total approximately $4,000-$6,000, bringing the complete startup investment to roughly $180,000-$220,000 depending on property size and amenity level.

Airbnb properties in Orr, Minnesota, a small town near Voyageurs National Park, typically generate annual revenues of $15,000-$35,000 for seasonal cabins and lakefront properties, with peak summer months (June-August) accounting for 60-70% of bookings at average daily rates of $120-$180. Operating expenses including property taxes ($2,000-$4,000), utilities ($1,800-$3,600), cleaning fees ($2,400-$4,800), maintenance ($2,000-$5,000), insurance ($1,200-$2,400), and Airbnb fees (3% host + guest fees) typically total $12,000-$22,000 annually, resulting in net profit margins of 15-35% for well-managed properties. Success factors include proximity to Pelican Lake, Crane Lake, or other water access, modern amenities like WiFi and updated kitchens, professional photography, and catering to fishing and outdoor recreation guests who book 3-7 day stays. Properties within 10 miles of Voyageurs National Park boundary or with private lake access command premium rates and achieve 40-60% occupancy during the 5-month peak season, while properties lacking water access or requiring significant updates may struggle with 20-30% occupancy and break-even or marginal profitability due to the area's limited year-round tourism demand and harsh winter conditions reducing bookings to near zero from November through March.

Based on Orr, Minnesota 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 proximity to area lakes and recreational facilities. Properties near Pelican Lake and other popular fishing destinations tend to achieve higher returns of 10-14% annually, while standard residential properties average 7-9% ROI. Initial profitability usually occurs within 18-24 months for well-positioned vacation rentals, with seasonal properties performing strongest during summer months (May-September) when tourism peaks. Investment properties in the $150,000-$250,000 range show optimal performance, with average nightly rates of $85-$125 generating monthly gross revenues of $1,800-$3,200 during peak season and $800-$1,500 during off-season months, resulting in net annual returns of approximately 9-11% after accounting for property management, maintenance, and vacancy rates of 25-35%.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Orr, Minnesota. Local real estate agents specializing in vacation rental investments include Arrowhead Realty Group and Northwoods Properties, both established in the early 2010s and focusing on lake properties around Lake Vermilion and the Boundary Waters area. RE/MAX Lakes Region and Coldwell Banker Realty have dedicated vacation rental specialists who understand the seasonal rental market dynamics in the Orr area. National services include Mashvisor (founded 2014), which provides Airbnb analytics and property search tools, AirDNA for market data analysis, and BiggerPockets for investor networking and education. Vacasa and RedAwning offer property management services for investors, while local property management companies like Northland Property Management and Superior Shores Properties specialize in short-term rental management in the region. Investment firms such as Roofstock and Awning focus on turnkey rental properties, though their inventory in smaller markets like Orr may be limited. Local mortgage brokers like First National Bank of Ely and Northview Bank provide financing options specifically for investment properties in the area.