Is Pierre, South Dakota Good for Airbnb Investment?

To start an Airbnb in Pierre, South Dakota, begin by researching local regulations through the Pierre City Planning Department and Hughes County offices, as Pierre typically requires short-term rental operators to obtain a business license and may have zoning restrictions in certain residential areas. Contact the South Dakota Department of Revenue to register for state tax collection, as you'll need to collect and remit state sales tax (currently 4.5%) plus any local lodging taxes. Find a suitable property by working with local real estate agents familiar with Pierre's market, focusing on areas near the Missouri River, downtown, or close to the state capitol building, with properties typically ranging from $80,000-$200,000 depending on size and location. Obtain necessary permits including a business license from Pierre City Hall (approximately $25-50 annually), ensure the property meets fire safety codes, and consider liability insurance specifically for short-term rentals. Furnish the space with quality basics including comfortable bedding, kitchen essentials, WiFi, and local touches highlighting Pierre's history as South Dakota's capital and its outdoor recreation opportunities. Create your Airbnb listing with professional photos showcasing views of the Missouri River or capitol grounds, set competitive pricing around $75-125 per night based on local hotel rates, and emphasize proximity to fishing, hunting, and government facilities. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, providing local recommendations for restaurants like La Minestra or outdoor activities at Farm Island Recreation Area, and maintaining compliance with ongoing tax reporting requirements to both state and local authorities.

To identify profitable short-term rental properties in Pierre, South Dakota, focus on locations within walking distance of the Missouri River waterfront, near the state capitol building, or close to major employers like Avera St. Mary's Hospital and state government offices, as these areas attract business travelers and tourists year-round. Target 2-4 bedroom single-family homes or condos built after 1980 with modern amenities, full kitchens, parking, and outdoor spaces that can accommodate families visiting for government business, fishing trips, or outdoor recreation. Conduct pricing analysis using AirDNA and Mashvisor to evaluate average daily rates ($80-150 typical for Pierre market) and occupancy rates (aim for 60%+ annually), while researching competition through Airbnb and VRBO searches to identify gaps in amenities or underserved property types. Utilize local resources like the Pierre Chamber of Commerce for tourism data, connect with local property management companies like Capital City Property Management for market insights, and monitor seasonal demand patterns tied to fishing seasons, hunting, legislative sessions, and summer tourism to optimize pricing strategies throughout the year.

To obtain an Airbnb/STR permit in Pierre, South Dakota, you must first contact the Pierre City Planning Department at City Hall located at 222 West Pleasant Drive to determine if short-term rentals are permitted in your zoning district, as Pierre requires a conditional use permit for STRs in most residential areas. Submit an application for a conditional use permit along with a site plan, proof of property ownership or lease agreement, liability insurance documentation showing minimum $1 million coverage, and a detailed operating plan describing guest capacity, parking arrangements, and noise mitigation measures. The application fee is approximately $200-300, and you'll need to attend a Planning Commission hearing where neighbors can provide input on your proposal. The entire process typically takes 4-6 weeks from application submission to final approval. Once approved, you must also obtain a business license from the city clerk's office for an additional $50-75 annually, register with the South Dakota Department of Revenue for sales tax collection, and comply with Pierre's specific requirements including maximum occupancy limits based on bedrooms, designated off-street parking spaces, 24-hour contact information posted for guests, and adherence to noise ordinances with quiet hours typically from 10 PM to 7 AM.

Short-term rentals (STRs) are generally legal in Pierre, South Dakota, as the city does not have comprehensive regulations specifically prohibiting them as of 2023. Pierre operates under relatively permissive zoning laws that typically allow residential properties to be used for short-term rental purposes, though operators must comply with basic business licensing requirements and collect applicable state and local taxes including South Dakota's 4.5% state sales tax and any municipal lodging taxes. The city has not implemented specific STR ordinances like some larger municipalities, meaning most residential zones allow short-term rentals by default, though commercial zoning compliance may be required for intensive operations. Property owners should ensure they meet fire safety codes, obtain necessary business licenses, and comply with homeowners association rules where applicable. Unlike some South Dakota cities that have enacted stricter regulations in recent years, Pierre has maintained a relatively hands-off approach to STR regulation, though this could change as the market grows and community concerns arise about housing availability and neighborhood character impacts.

The best areas for Airbnb investment in Pierre, South Dakota are the Capitol District near the State Capitol building, which attracts consistent business travelers, government officials, and political visitors year-round, and the Missouri River waterfront area, particularly around Griffin Park and the river access points, which draws outdoor enthusiasts, fishermen, and tourists visiting for water recreation activities. The historic downtown district along Pierre Street offers appeal for visitors attending events at the Ramkota Hotel conference center and those exploring local attractions like the Cultural Heritage Center and Verendrye Monument. The residential areas near Riggs High School and T.F. Riggs Field provide good investment potential due to their proximity to sporting events and school activities that bring visiting families. Properties within walking distance of the Missouri River boat ramps and fishing access sites are particularly attractive given Pierre's reputation as a premier walleye fishing destination, with peak seasons during spring and fall tournaments drawing anglers from across the Midwest who prefer private accommodations over traditional hotels.

Pierre, South Dakota imposes a 4% municipal lodging tax on short-term rental accommodations including Airbnbs, which applies to stays of less than 30 consecutive days. This tax is collected in addition to the state sales tax of 4.5% and any applicable county taxes, bringing the total tax burden to approximately 8.5-9%. Airbnb hosts are required to register with the City of Pierre Finance Office and collect these taxes directly from guests at the time of booking or check-in. Tax remittance must be filed monthly by the 20th of the following month using forms provided by the city, with payments submitted along with detailed occupancy reports. The state sales tax portion is remitted to the South Dakota Department of Revenue, while the municipal lodging tax is paid directly to Pierre's city government. Exemptions typically include stays exceeding 30 days which are considered long-term rentals, accommodations for permanent residents, and certain government or military personnel on official business. Failure to collect and remit these taxes can result in penalties of 10% of the unpaid amount plus interest charges of 1% per month.

To start an Airbnb in Pierre, South Dakota, expect total costs around $185,000-$220,000. Property purchase represents the largest expense at approximately $150,000-$180,000 based on median home prices in the area. Furnishing costs typically range $8,000-$15,000 for a complete 2-3 bedroom property including furniture, bedding, kitchenware, and decor. Initial setup costs including professional photography, listing creation, and basic renovations average $2,000-$4,000. Permits and fees are relatively minimal in South Dakota, estimated at $200-$500 for business licenses and short-term rental permits. Insurance costs approximately $1,200-$2,000 annually for landlord and short-term rental coverage. Monthly utilities including electricity, gas, water, internet, and cable average $200-$350 per month, totaling $1,200-$2,100 for six months. First six months operating costs including cleaning supplies, maintenance, marketing, and platform fees range $1,500-$3,000. Additional considerations include property taxes averaging $1,800-$2,500 annually and potential HOA fees if applicable, though many properties in Pierre are not subject to HOA restrictions.

Airbnb properties in Pierre, South Dakota typically generate modest returns due to the city's small market size and limited tourism infrastructure, with average nightly rates ranging from $65-95 for entire homes and occupancy rates around 45-55% 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 platform commissions typically consume 70-80% of gross revenue, resulting in net profit margins of 20-30% or roughly $2,400-5,400 annually. Success factors in Pierre's market include proximity to the Missouri River for fishing enthusiasts, competitive pricing during pheasant hunting season (October-January), and targeting government workers and contractors visiting the state capital, though properties face challenges from seasonal demand fluctuations and competition from established hotels like Ramkota Hotel and AmericInn. The most profitable properties tend to be well-maintained homes within 10 minutes of downtown Pierre that can accommodate hunting groups or families visiting nearby attractions like the Oahe Dam, with some hosts reporting better performance by offering amenities like boat parking, freezer space for game processing, and flexible check-in times for business travelers.

Based on Pierre, South Dakota 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 city. Properties near the Missouri River or downtown area commanding $75-120 per night can achieve profitability within 18-24 months, while standard residential properties averaging $50-85 nightly rates may require 24-36 months to reach positive cash flow. The limited tourism infrastructure and seasonal demand fluctuations in Pierre result in occupancy rates of 35-55% annually, with peak performance during summer months and state government session periods driving higher returns for well-positioned properties, though investors should expect lower overall yields compared to major tourist destinations due to the smaller market size and limited year-round demand drivers.

STRSearch is a national platform that helps investors identify profitable short-term rental properties across markets including Pierre, South Dakota. In the Pierre area, local real estate agents like those at Keller Williams Black Hills and Century 21 Advantage have experience with investment properties and vacation rentals along the Missouri River corridor. RE/MAX Results agents in Pierre also work with investors seeking properties near the state capitol and recreational areas. National services include AirDNA for market analysis, Mashvisor for property investment analytics, and Awning for full-service Airbnb property management and acquisition assistance. BiggerPockets marketplace connects investors with local wholesalers and agents familiar with Pierre's tourism patterns around fishing, hunting, and government travel. Roofstock and Arrived Homes occasionally feature South Dakota markets for rental property investments. Local property management companies like Capital City Property Management can provide insights into rental demand from state employees and seasonal visitors to the Pierre-Fort Pierre area.