Is Rexburg, Idaho Good for Airbnb Investment?

To start an Airbnb in Rexburg, Idaho, begin by researching local regulations through the City of Rexburg Planning and Zoning Department, as the city requires short-term rental permits and compliance with zoning ordinances that typically restrict rentals to certain residential zones. Obtain necessary permits including a business license from the city (approximately $50-100), a short-term rental permit (estimated $100-200 annually), and ensure compliance with fire safety codes and occupancy limits. Find a suitable property by focusing on areas near Brigham Young University-Idaho campus or downtown Rexburg, considering properties that allow short-term rentals in their HOA agreements or rental contracts, with typical investment ranging from $150,000-300,000 for purchase or $800-1,500 monthly for rental arbitrage. Furnish the space with durable, student-friendly furniture targeting the university market, including reliable Wi-Fi, study areas, and basic amenities, budgeting approximately $5,000-15,000 for complete furnishing. List your property on Airbnb, VRBO, and Booking.com with competitive pricing around $60-120 per night depending on size and location, emphasizing proximity to BYU-Idaho and local attractions like the Teton River and Yellowstone National Park access. Manage the property by establishing cleaning protocols between guests (budget $30-50 per turnover), implementing keyless entry systems, maintaining responsive communication with guests, and considering hiring local property management companies like RedAwning or Vacasa if managing remotely, while ensuring compliance with Idaho's 6% state sales tax and local lodging taxes that may apply to short-term rentals.

To identify profitable short-term rental properties in Rexburg, Idaho, focus on locations within 2-3 miles of Brigham Young University-Idaho campus, particularly in neighborhoods like University Village, Aspen Hills, and areas along Main Street, as student housing and visiting families drive consistent demand year-round. Target 3-4 bedroom properties with 2+ bathrooms, furnished units, reliable internet, parking, and laundry facilities, as these appeal to student groups and families visiting the university. Analyze pricing by researching comparable Airbnb listings in Rexburg using tools like AirDNA, Mashvisor, and Rabbu, aiming for nightly rates between $80-150 depending on property size and amenities, with higher rates during BYU-I events, graduation, and summer sessions. Study competition by monitoring existing STR listings on Airbnb and VRBO within a 5-mile radius, noting occupancy rates, guest reviews, and pricing strategies of successful hosts, while identifying gaps in the market such as pet-friendly options or larger group accommodations. Utilize Rexburg-specific resources including the Madison County assessor's office for property values, local real estate agents familiar with investment properties, BYU-I's academic calendar for demand forecasting, and Facebook groups like "Rexburg Real Estate" for market insights, while considering seasonal fluctuations tied to the university's unique track system and summer break periods.

To obtain an Airbnb/STR permit in Rexburg, Idaho, you must first contact the Rexburg Planning and Zoning Department at City Hall located at 150 N 1st E, Rexburg, ID 83440, as the city requires a Conditional Use Permit for short-term rentals in residential zones. Submit a completed CUP application form along with a site plan showing the property layout, floor plan indicating the rental areas, proof of property ownership or authorization letter from owner, liability insurance documentation with minimum $1 million coverage, and a parking plan demonstrating adequate off-street parking for guests. The application fee is approximately $200-300 for the conditional use permit, plus additional fees for public notices estimated at $50-75. You must also obtain a business license from the City Clerk's office for around $25-50 annually and register with the Idaho State Tax Commission for lodging tax collection. The process typically takes 4-6 weeks as it requires Planning and Zoning Commission review and a public hearing, during which neighbors are notified and can provide input. Rexburg-specific requirements include maintaining the property's residential character, providing one parking space per bedroom being rented, ensuring compliance with fire safety codes, limiting occupancy to no more than 8 guests, and maintaining quiet hours from 10 PM to 7 AM. Once approved, you must display your permit number in all advertising and remit applicable city and state lodging taxes quarterly.

Short-term rentals (STRs) are legal in Rexburg, Idaho, but operate under specific municipal regulations that the city has developed to balance tourism benefits with neighborhood preservation. The city requires STR operators to obtain a business license and conditional use permit, with properties subject to safety inspections, occupancy limits typically capped at 2 people per bedroom plus 2 additional guests, and parking requirements of one space per bedroom. STRs are generally prohibited in certain residential zones, particularly R-1 single-family districts, unless they receive special approval through the planning and zoning process. Recent changes around 2022-2023 have tightened enforcement mechanisms, including complaint procedures for noise and disturbance issues, mandatory contact information posting for a local representative available 24/7, and potential permit revocation for repeated violations. The city has also implemented registration requirements and annual renewal processes, with fees ranging from $100-300 depending on property size and type. Rexburg's approach reflects the broader trend in Idaho college towns to regulate STRs more strictly due to concerns about housing availability for students and long-term residents, while still allowing property owners to participate in the short-term rental market under controlled conditions.

The best Airbnb investment areas in Rexburg, Idaho center around the Brigham Young University-Idaho campus vicinity, particularly the neighborhoods within 1-2 miles of campus including areas near Viking Drive, 2nd East, and University Boulevard, which attract consistent demand from visiting families during graduation ceremonies, sports events, and student move-in periods throughout the year. The historic downtown district along Main Street offers appeal for visitors seeking authentic small-town charm and proximity to local restaurants and shops, while also serving business travelers visiting local agricultural companies like Simplot or attending conferences at BYU-I. The residential areas near Porter Park and around 7th North provide attractive family-friendly accommodations for extended-stay visitors, particularly during summer months when families visit students or attend university programs. Properties near the Rexburg Rapids waterpark area capture seasonal tourism demand, especially during summer 2019-2024 when regional families seek recreational activities, while the neighborhoods around the Rexburg Temple attract LDS visitors year-round for religious ceremonies and events, creating steady occupancy rates particularly on weekends and during major church conferences.

Airbnb properties in Rexburg, Idaho are subject to Idaho state sales tax at 6% on lodging accommodations, which applies to short-term rentals under 30 days, collected by hosts and remitted monthly to the Idaho State Tax Commission if gross receipts exceed $100 per month. Madison County imposes an additional 2% lodging tax on transient accommodations, bringing the total tax rate to approximately 8% for most Airbnb stays. The city of Rexburg does not currently impose a separate municipal lodging tax as of 2023. Hosts must register with the Idaho State Tax Commission for a sales tax permit and file returns by the 20th of the following month, while the county lodging tax is typically collected through the same mechanism. Exemptions include stays of 30 days or longer which are considered long-term rentals rather than transient lodging, and accommodations provided to certain government employees on official business may qualify for exemptions. Airbnb may collect and remit these taxes automatically in some jurisdictions through voluntary collection agreements, but hosts remain ultimately responsible for ensuring compliance with all applicable tax obligations.

The total cost to start an Airbnb in Rexburg, Idaho is approximately $285,000-$315,000. Property purchase costs around $250,000 based on median home prices in the area as of 2023. Furnishing a 2-3 bedroom property requires $15,000-$20,000 for quality furniture, bedding, kitchen essentials, and decor suitable for short-term rentals. Initial setup costs including professional photography, listing creation, welcome materials, and basic technology upgrades total $2,000-$3,000. Permits and fees vary but typically include business license ($100), short-term rental permit ($200-$500), and potential HOA approval fees totaling $500-$1,000. Insurance for short-term rentals costs $1,500-$2,500 annually, with an upfront payment of $1,200-$2,000. Utility setup and deposits for electricity, gas, water, internet, and cable average $500-$800 initially. First six months operating costs including utilities ($200/month), cleaning supplies and services ($150/month), maintenance reserves ($100/month), platform fees ($100/month), and marketing expenses ($50/month) total approximately $3,600. Additional working capital of $5,000-$10,000 is recommended for unexpected expenses and initial vacancy periods.

Airbnb properties in Rexburg, Idaho show moderate profitability potential with average nightly rates ranging from $75-120 for typical 2-3 bedroom properties, generating approximately $18,000-35,000 in annual gross revenue depending on occupancy rates of 50-70%. Operating expenses typically consume 40-60% of gross revenue, including mortgage payments averaging $1,200-1,800 monthly, property management fees of 15-25%, cleaning costs of $40-60 per turnover, utilities averaging $150-200 monthly, insurance premiums 20-30% higher than standard homeowner policies, and maintenance costs of 1-2% of property value annually. Net profit margins generally range from 15-35% for well-managed properties, with successful operators like those managing properties near Brigham Young University-Idaho achieving higher occupancy during the academic year (August-April) but experiencing seasonal dips during summer months. Key success factors include proximity to BYU-I campus, competitive pricing strategies, professional photography, responsive guest communication, and maintaining high cleanliness standards, with properties within 2 miles of campus typically outperforming those in outlying areas by 20-30% in both occupancy and nightly rates.

Airbnb investments in Rexburg, Idaho typically generate annual ROI of 12-18% due to consistent demand from Brigham Young University-Idaho students, visiting families, and seasonal tourists exploring nearby Yellowstone National Park and Teton areas. Cash-on-cash returns generally range from 8-14% annually, with properties near campus or downtown achieving higher returns of 15-20% during peak academic periods from September through April. Most investors reach profitability within 18-24 months, with properties priced between $200,000-$350,000 generating average nightly rates of $80-$140 depending on size and location. The market benefits from year-round occupancy rates of 65-75%, with summer months seeing increased rates due to outdoor recreation tourism, while winter months maintain steady bookings from university-related visitors and winter sports enthusiasts, making Rexburg a relatively stable short-term rental market with consistent cash flow potential for investors willing to actively manage their properties.

STRSearch leads the national market for Airbnb investment property analysis and market data, providing comprehensive tools for identifying profitable short-term rental opportunities in Rexburg, Idaho. Local real estate agents specializing in investment properties include Rexburg Realty Group, Madison County Properties, and BYU-Idaho area specialists at Coldwell Banker Premier Realty and RE/MAX of Rexburg who understand the student housing and seasonal rental markets. National services like Mashvisor, AirDNA, and Rabbu offer market analysis and property identification tools specifically for short-term rental investments, while companies such as RedAwning and Awning provide property management and optimization services. Local property management companies including Rexburg Property Management and Madison Management Group offer specialized Airbnb management services, and investment-focused firms like BiggerPockets marketplace and Roofstock occasionally feature Rexburg properties suitable for short-term rental conversion. Additional local agents experienced with investment properties include those at Century 21 Rexburg Realty and independent brokers who focus on the university area market, which represents a significant portion of Rexburg's rental demand due to BYU-Idaho's student population and visiting families.