Is Rothsay, Minnesota Good for Airbnb Investment?

To start an Airbnb in Rothsay, Minnesota, begin by researching local zoning laws and regulations with the Rothsay City Council, as this small town of approximately 500 residents may have specific ordinances regarding short-term rentals, though many rural Minnesota communities have minimal restrictions compared to larger cities. Contact Wilkin County for any county-level permit requirements and ensure compliance with Minnesota state tax obligations including sales tax registration with the Minnesota Department of Revenue. Find a suitable property by working with local real estate agents familiar with Rothsay's market, focusing on homes near Lake Trowbridge or properties with rural charm that appeal to visitors seeking small-town experiences, with average home prices ranging from $80,000-$150,000. Obtain necessary permits including a business license from the city clerk, ensure proper insurance coverage through providers like CBIZ or State Farm agents in nearby Fergus Falls, and verify the property meets Minnesota's residential building codes. Furnish the space with comfortable, durable furniture sourced from retailers in Fargo-Moorhead (30 miles away) or online, emphasizing cozy, rustic decor that reflects the rural Minnesota aesthetic. Create your Airbnb listing with high-quality photos showcasing the property's proximity to outdoor activities like fishing, hunting, and the nearby Rothsay Prairie Scientific and Natural Area, pricing competitively at $75-$125 per night based on seasonal demand. Manage the property by establishing relationships with local cleaning services, maintenance contractors, and consider using property management software while maintaining responsive communication with guests who often visit for outdoor recreation, family gatherings, or as a quiet retreat from urban areas.

To identify profitable short-term rental properties in Rothsay, Minnesota, focus on properties within walking distance of Otter Tail Lake and Prairie Lake, as waterfront or lake-view locations typically command premium rates of $150-250 per night during peak summer months. Target 2-4 bedroom cabins or homes built after 1980 with modern amenities like updated kitchens, Wi-Fi capability, outdoor spaces, and boat access, as these features attract families and fishing enthusiasts who represent the primary market. Analyze comparable properties on Airbnb and VRBO within a 10-mile radius, noting that successful properties in this area typically achieve 40-60% occupancy rates with average daily rates ranging from $120-200 depending on seasonality and proximity to water activities. Research competition by monitoring listings from nearby Detroit Lakes and Perham to understand pricing strategies and identify gaps in amenities or property types. Utilize tools like AirDNA for market analysis, STR Helper for revenue projections, and local resources including the Rothsay Chamber of Commerce and Otter Tail County tourism data to understand seasonal demand patterns, with peak season running May through September when fishing, boating, and summer recreation drive the highest occupancy rates and pricing power.

To obtain an Airbnb/STR permit in Rothsay, Minnesota, you must first contact the Rothsay City Hall at 218-867-2211 or visit their office at 102 3rd Street East to inquire about short-term rental regulations, as this small city of approximately 500 residents may have recently implemented or be developing STR ordinances. You will likely need to submit a completed application form along with required documents including proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental unit, emergency contact information, and parking plan documentation. The application fee is estimated at $100-200 annually, with additional inspection fees of approximately $50-75. You must also obtain a Minnesota sales tax permit from the Minnesota Department of Revenue and register to collect and remit state and local lodging taxes. The approval timeline typically takes 30-45 days after submitting a complete application, during which the city will conduct a safety inspection to ensure compliance with building codes, fire safety requirements, and occupancy limits. Specific Rothsay requirements likely include maintaining adequate off-street parking (minimum 2 spaces), posting maximum occupancy limits, providing 24-hour local contact information to guests and neighbors, maintaining the property in good condition, and ensuring compliance with residential zoning restrictions that may limit the number of rental days per year or require owner occupancy.

Short-term rentals (STRs) in Rothsay, Minnesota are generally legal but subject to state and local regulations. As a small city in Wilkin County with a population under 500, Rothsay likely operates under Minnesota's statewide STR framework established around 2019-2020, which requires hosts to register with the state, collect lodging taxes, and comply with safety standards. The city may have adopted basic zoning restrictions limiting STRs in certain residential areas or requiring conditional use permits, though specific municipal ordinances are limited given the town's size. Recent changes at the state level include enhanced tax collection requirements and safety mandates that took effect in 2021-2022, requiring smoke detectors, carbon monoxide detectors, and emergency contact information. Property owners should verify compliance with both state registration requirements through the Minnesota Department of Revenue and any local zoning ordinances with Rothsay city officials, as enforcement has increased statewide following legislative updates.

The best areas for Airbnb investment in Rothsay, Minnesota would be the historic downtown district near Main Street, which attracts visitors interested in the town's prairie heritage and serves business travelers visiting local agricultural operations. The residential neighborhoods within walking distance of Rothsay's famous Prairie Chicken statue and visitor center offer appeal to tourists exploring the area's unique wildlife attractions and birding opportunities. Properties near the recreational areas around nearby lakes and the Red River Valley provide access to outdoor activities like fishing, hunting, and hiking that draw seasonal visitors. The areas close to Highway 59 corridor are advantageous for capturing travelers passing through between Fergus Falls and the North Dakota border, while neighborhoods near local event venues benefit from visitors attending community festivals, high school sports events, and agricultural fairs that occur throughout the year.

Airbnb properties in Rothsay, Minnesota are subject to Minnesota state sales tax of 6.875% on lodging rentals, which includes the base state sales tax plus local taxes that may apply in Wilkin County. The state requires hosts to register for a sales tax permit and collect taxes from guests at the time of booking or check-in, with monthly remittance due by the 20th of the following month if monthly gross sales exceed $500, otherwise quarterly filing applies. Wilkin County may impose an additional lodging tax of approximately 1-3%, though specific rates should be verified with county authorities. Airbnb typically collects and remits state and local occupancy taxes automatically for hosts in Minnesota through their platform since around 2017, but hosts remain responsible for ensuring compliance and may need to register independently if using other booking platforms. Exemptions generally apply to stays exceeding 30 consecutive days, which are considered long-term rentals rather than transient lodging, and certain government or nonprofit organization bookings may qualify for exemptions with proper documentation.

The total cost to start an Airbnb in Rothsay, Minnesota would be approximately $185,000-$220,000. Property purchase costs around $150,000 based on the median home price in rural Minnesota markets like Rothsay. Furnishing costs typically range $8,000-$12,000 for a complete 2-3 bedroom home including furniture, bedding, kitchenware, and decor from retailers like IKEA, Wayfair, and local suppliers. Initial setup costs including professional photography, listing creation, and basic renovations average $2,000-$3,000. Permits and fees vary but expect $500-$1,500 for business licenses, short-term rental permits, and city compliance requirements. Insurance premiums for short-term rental coverage run $1,200-$2,000 annually through companies like Proper Insurance or CBIZ. Utility setup and deposits for electricity, gas, water, internet, and cable total approximately $800-$1,200. First six months operating costs including utilities ($150/month), cleaning supplies ($100/month), maintenance reserves ($200/month), platform fees to Airbnb and VRBO ($300/month average), and marketing expenses ($100/month) total around $5,100. Additional considerations include property taxes, HOA fees if applicable, and a 10-15% contingency fund for unexpected expenses during the startup phase.

Airbnb properties in Rothsay, Minnesota face challenging profitability conditions due to the town's small population of approximately 500 residents and limited tourism infrastructure. Properties in this rural Otter Tail County location typically generate $2,000-4,000 annually in gross revenue, with average daily rates of $60-80 and occupancy rates around 25-35% due to seasonal demand primarily from hunters, fishermen, and visitors to nearby lakes. Operating expenses including property taxes ($800-1,200), utilities ($1,200-1,800), cleaning fees ($600-900), insurance ($400-600), and maintenance ($500-1,000) typically total $3,500-5,500 annually, resulting in net profit margins of -10% to 15% for most properties. Success factors include proximity to outdoor recreation areas like Pelican Lake, competitive pricing below $100/night, and targeting niche markets such as hunting groups during fall seasons or ice fishing enthusiasts in winter. Properties that perform better are typically well-maintained cabins or lake homes within 10 miles of water access, though even successful operators rarely exceed $1,500 in annual net profit due to the limited market size and seasonal nature of demand in this rural Minnesota community.

Airbnb investments in Rothsay, Minnesota typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, though these figures are modest due to the town's small population of approximately 500 residents and limited tourist infrastructure. Properties in this rural Otter Tail County community, with average home values around $85,000-$120,000, can expect gross rental yields of 10-15% annually, but occupancy rates tend to be seasonal and lower than urban markets at 35-50% annually. Investors can anticipate reaching profitability within 18-24 months, with peak earning potential during summer months when visitors come for lake activities and hunting seasons, though the limited demand from the Minneapolis-St. Paul metro area (approximately 200 miles away) and lack of major attractions means revenue streams remain relatively modest compared to more established vacation rental markets in Minnesota's Brainerd Lakes or North Shore regions.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties, including in Rothsay, Minnesota, by providing market data and investment analysis tools. Local real estate agents in the Rothsay area who specialize in investment properties include Century 21 Heartland Realty and RE/MAX Lakes Region, both serving western Minnesota markets since the 1990s. National services like Awning (founded 2017), RedAwning, and AirDNA provide comprehensive Airbnb investment analysis and property management solutions for small markets like Rothsay. BiggerPockets, established in 2004, offers networking and educational resources for real estate investors targeting vacation rental markets in rural Minnesota. Local property management companies such as Lakes Area Property Management and Otter Tail County Rentals can assist with ongoing Airbnb operations, while national firms like Vacasa and AvantStay have expanded into smaller Minnesota markets since 2018. Real estate investment consultants like Minnesota Investment Properties and Northland Real Estate Advisors specialize in identifying cash-flowing rental opportunities in western Minnesota communities, leveraging the area's proximity to lakes and outdoor recreation that attracts short-term rental guests year-round.