Is Plymouth, Minnesota Good for Airbnb Investment?

To start an Airbnb in Plymouth, Minnesota, begin by researching local zoning laws and regulations through the Plymouth City Planning Department, as the city requires short-term rental operators to obtain a conditional use permit and business license, with properties needing to be owner-occupied and limited to no more than two guest rooms. Contact the Plymouth Building Department at 763-509-5000 to understand specific permit requirements, which typically include fire safety inspections, parking compliance (minimum two spaces), and adherence to the city's short-term rental ordinance established in 2019. Find a suitable property in residential zones that allows conditional use permits, ensuring it meets Plymouth's requirements for primary residence occupancy and has adequate parking and emergency egress. Furnish the space with quality amenities including Wi-Fi, linens, basic kitchen supplies, and safety equipment like smoke detectors and carbon monoxide alarms, while ensuring compliance with Minnesota state fire codes. Create your Airbnb listing with professional photos, competitive pricing based on Plymouth's average nightly rates of $80-120, and highlight proximity to attractions like Medicine Lake and downtown Minneapolis. For ongoing management, establish clear house rules, maintain responsive communication with guests, coordinate cleaning between stays, handle tax obligations including Minnesota's 6.875% sales tax and Plymouth's local lodging taxes, and ensure continuous compliance with city inspections and permit renewals typically required annually.

To identify profitable short-term rental properties in Plymouth, Minnesota, focus on locations within 10-15 minutes of major attractions like downtown Minneapolis, the Chain of Lakes area, and business districts near Highway 494 and Interstate 394 corridors. Target 2-4 bedroom single-family homes or townhomes built after 1990 with modern amenities, full kitchens, parking, and outdoor spaces, as these appeal to both leisure travelers visiting the Twin Cities and business travelers working at companies like Target, Best Buy, and UnitedHealth Group headquartered nearby. Analyze pricing by researching comparable Airbnb listings in Plymouth and surrounding Minnetonka, Maple Grove, and Wayzata areas, aiming for properties that can generate $150-250 per night during peak summer months and $100-180 during winter, with occupancy rates of 65-75% annually. Conduct competition research using AirDNA, Mashvisor, and STR analysis tools to identify market saturation levels and optimal pricing strategies, while monitoring local regulations since Plymouth requires STR permits and has specific zoning restrictions. Utilize resources like the Plymouth city website for permit requirements, Minnesota MLS data through local realtors, and platforms like Rabbu or AllTheRooms to analyze market performance, ensuring your investment can achieve 12-18% annual returns in this competitive but growing Twin Cities suburban market.

To obtain an Airbnb/STR permit in Plymouth, Minnesota, you must first contact the Plymouth Community Development Department at 763-509-5000 or visit City Hall at 3400 Plymouth Boulevard to inquire about short-term rental licensing requirements, as Plymouth requires a conditional use permit for STRs in residential zones. Submit an application including a completed CUP application form, site plan showing parking and property layout, proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, and a management plan detailing guest check-in procedures and emergency contacts. Required documents also include a floor plan, neighborhood notification list, and payment of application fees typically ranging from $500-800 plus additional review fees. The process involves staff review, public notice posting, Planning Commission hearing, and potential City Council review, taking approximately 60-90 days from submission to approval. Plymouth-specific requirements include maintaining adequate off-street parking (typically 2 spaces minimum), ensuring compliance with residential density standards, implementing quiet hours from 10 PM to 7 AM, providing 24/7 local contact information to neighbors, and adhering to maximum occupancy limits based on bedrooms plus two additional guests, with annual renewal required and potential inspections for health and safety compliance.

Short-term rentals (STRs) are legal in Plymouth, Minnesota, but are subject to specific regulations under the city's licensing and zoning requirements. Plymouth requires STR operators to obtain a business license and comply with residential zoning restrictions, which generally limit rentals to owner-occupied properties or properties in areas zoned for such use. The city prohibits STRs in certain residential neighborhoods to maintain community character and has implemented occupancy limits, parking requirements, and noise restrictions. Recent changes around 2022-2023 included updated licensing procedures and enhanced enforcement mechanisms following complaints from residents about party houses and neighborhood disruption. Property owners must register with the city, provide emergency contact information, and ensure compliance with fire safety codes, with violations potentially resulting in license revocation and fines up to several thousand dollars.

The most promising Airbnb investment areas in Plymouth, Minnesota include the Medicine Lake neighborhood, which attracts visitors due to its proximity to the scenic Medicine Lake and recreational activities, making it ideal for weekend getaways and summer tourism. The French Lake area offers similar appeal with waterfront access and is popular among families seeking vacation rentals near outdoor activities. The downtown Plymouth district near major corporate offices and the Northwest Business Center attracts significant business travel, particularly from companies like Target Corporation and other Fortune 500 businesses headquartered in the Twin Cities metro area. Areas near Highway 55 and Interstate 494 provide excellent accessibility for travelers visiting the Mall of America, Minneapolis-St. Paul International Airport, and downtown Minneapolis, making them attractive for both leisure and business guests. The neighborhoods around Plymouth Creek Center and the Plymouth Ice Center draw visitors attending youth hockey tournaments and sporting events year-round, creating consistent demand especially during winter months from 2020-2024 when youth sports travel increased significantly.

In Plymouth, Minnesota, Airbnb hosts are subject to both state and local lodging taxes. The Minnesota state lodging tax is 3% on gross receipts from short-term rentals under 30 days, which Airbnb typically collects and remits directly to the state on behalf of hosts. Plymouth imposes a local lodging tax of 3% as part of Hennepin County's lodging tax structure, bringing the total tax rate to approximately 6%. Hennepin County also levies an additional 0.15% regional transit tax on lodging. Airbnb generally handles the collection and remittance of these taxes automatically through their platform for participating jurisdictions, though hosts should verify their specific obligations with local authorities. The taxes apply to the rental amount excluding cleaning fees and are collected from guests at the time of booking. Stays of 30 days or longer are typically exempt from these lodging taxes as they are considered long-term rentals rather than transient accommodations. Hosts may need to register with the Minnesota Department of Revenue and obtain necessary permits from Plymouth or Hennepin County depending on local requirements, and should maintain records of all transactions for tax compliance purposes.

To start an Airbnb in Plymouth, Minnesota, the total costs would be approximately $425,000-$475,000. Property purchase represents the largest expense at $350,000-$400,000 based on median home prices in Plymouth as of 2023-2024. Furnishing costs typically range $15,000-$25,000 for a complete 3-bedroom home including furniture, bedding, kitchenware, and decor to create an attractive rental space. Initial setup costs including professional photography, listing creation, welcome materials, and basic supplies total around $2,000-$3,000. Permits and fees in Plymouth include business licensing ($100-$200), potential zoning permits ($200-$500), and any HOA approvals if applicable. Insurance costs run $1,500-$2,500 annually for short-term rental coverage beyond standard homeowner's insurance. Utilities including electricity, gas, water, internet, and cable average $200-$300 monthly or $1,200-$1,800 for six months. First six months operating costs encompass cleaning services ($150-$200 per turnover), maintenance reserves ($500-$1,000 monthly), property management software subscriptions ($50-$100 monthly), restocking supplies ($100-$200 monthly), and marketing expenses ($200-$400 monthly), totaling approximately $6,000-$10,000 for the initial six-month period.

Airbnb properties in Plymouth, Minnesota typically generate annual revenues between $18,000-$35,000 for entire homes, with average daily rates ranging from $85-$140 depending on property size and amenities. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($30-50 per turnover), utilities ($150-250 monthly), property management (10-20% of revenue), insurance ($800-1,200 annually), and maintenance costs averaging $2,000-4,000 yearly. Properties near Plymouth's business districts and those serving Minneapolis-St. Paul corporate travelers achieve higher occupancy rates of 65-75% compared to leisure-focused properties at 45-60%. A typical 3-bedroom home generating $28,000 annually might incur $16,000 in expenses, yielding a 43% profit margin or roughly $12,000 net income. Success factors include proximity to major employers like Target Corporation and UnitedHealth Group headquarters, professional photography, competitive pricing during peak summer months and winter business travel seasons, and maintaining 4.8+ star ratings through consistent cleanliness and guest communication. Properties within 15 minutes of Minneapolis-St. Paul International Airport command premium rates, while those offering amenities like hot tubs or game rooms can increase revenue by 15-25% over standard listings.

Airbnb investments in Plymouth, Minnesota typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% based on current market conditions. Properties in desirable neighborhoods near Plymouth's business districts and recreational areas like Medicine Lake can achieve higher returns of 10-15% annually, while standard residential properties average 8-10%. Initial profitability usually occurs within 12-18 months for well-positioned properties, with full investment recovery expected in 7-10 years. The Plymouth market benefits from proximity to Minneapolis corporate centers, consistent business traveler demand, and seasonal tourism from lake activities, supporting occupancy rates of 65-75% annually. Cash-on-cash returns are optimized when investors purchase properties in the $250,000-$400,000 range and maintain average daily rates of $120-$180, with successful operators achieving monthly gross revenues of $2,500-$4,500 per property after accounting for Plymouth's competitive short-term rental landscape and seasonal demand fluctuations.

STRSearch is a national platform that helps investors identify profitable short-term rental properties across markets including Plymouth, Minnesota. Local real estate agents specializing in investment properties in Plymouth include Keller Williams Premier Realty agents who focus on Airbnb investments, RE/MAX Results investment specialists, and Coldwell Banker Realty agents with short-term rental expertise. National services include Awning (formerly RedAwning) which provides full-service Airbnb property management and acquisition assistance, Mashvisor for property analysis and market data, AirDNA for short-term rental analytics, and Roofstock which offers turnkey rental properties. Local property management companies that assist with Airbnb investments include Twin Cities Property Management, Zenplace, and Minnesota Property Management. Additional services include BiggerPockets for networking and education, Furnishr for property furnishing, and local contractors like Plymouth Property Solutions who specialize in preparing homes for short-term rentals. Investment-focused mortgage brokers such as Mortgage Network and Fairway Independent Mortgage also serve the Plymouth market for Airbnb property financing.