Is Stoughton, Wisconsin Good for Airbnb Investment?

Potentially—Stoughton, Wisconsin combines visitor demand with long-term real estate upside.

• Presents a more modest but potentially stable opportunity given the city's small-town charm and proximity to Madison.
• Stoughton's market is characterized by its Norwegian heritage, historic downtown, and location just 20 minutes from Wisconsin's capital city.
• This seasonal and overflow demand can support decent occupancy rates for short-term rentals, particularly during University of Wisconsin events and summer festivals.
• While property values are significantly more affordable than major metropolitan areas, making initial investments accessible.
• Investors should consider the smaller market size, limited year-round attractions, and potential competition from Madison's more extensive lodging options.

$800–$1,500 per month based on location, season, and property quality.

• Based on available market data and regional analysis, Airbnb hosts in Stoughton, Wisconsin typically earn between $800-$1,500 per month.
• Seasonal variations show peak earnings during summer months and university events, with revenues increasing 25-40% above winter baseline due to proximity to Madison and outdoor recreation activities.
• Single-bedroom units generally earn $800-$1,100 monthly while entire homes can generate $1,200-$1,800 during peak periods.
• Key factors affecting earnings include proximity to Lake Kegonsa, distance from Madison (approximately 20 minutes), property condition, guest capacity.
• Winter months typically see 30-35% lower occupancy rates, dropping monthly revenues to $600-$900 range.
• Properties with lake access, modern amenities, or unique features command premium rates of $100-$130 per night.

Potentially strong—typical annual ROI is 8–12%.

• Typically generate ROI between 8-12% annually, with payback periods averaging 7-9 years for properties purchased in the $200,000-$300,000 range that commonly characterize this market.
• Short-term rental properties in Stoughton can command nightly rates of $80-$120 depending on size and amenities.
• This translates to gross annual revenues of approximately $18,000-$25,000 for a typical 2-3 bedroom property, though after accounting for higher operating costs including cleaning fees, utilities, maintenance.
• In comparison, traditional long-term rentals in Stoughton typically yield 6-8% ROI with monthly rents ranging from $1,200-$1,800 for similar properties.

Stoughton, Wisconsin averages 55–65% annual occupancy, with seasonal variation.

• Airbnb occupancy rates in Stoughton, Wisconsin typically average around 55-65% annually, with significant seasonal variation that peaks during summer months (June-August) at approximately 70-80% due to increased tourism and outdoor activities around nearby lakes and state parks.
• Spring and fall months generally see moderate occupancy rates of 50-60%, while winter months drop to around 35-45% occupancy.
• Peak demand occurs during University of Wisconsin-Madison events, local festivals, and summer weekends when visitors explore the greater Madison area.
• Stoughton's occupancy rates tend to be slightly lower than Wisconsin's state average of approximately 60-70% and below the national Airbnb average of 65-75%.

The strongest opportunities balance visitor demand, nightly rates, and acquisition cost.

• The downtown Stoughton area near Main Street offers excellent Airbnb potential due to its proximity to the historic opera house, local festivals, and walkable dining options.
• The neighborhoods around Lake Kegonsa provide strong investment opportunities with waterfront and near-water properties commanding premium rates from guests seeking recreational activities like boating, fishing.
• Areas near the Stoughton Country Club appeal to golf enthusiasts and business travelers, offering quieter settings with upscale demographics willing to pay higher nightly rates.
• The residential neighborhoods between Highway 51 and the downtown core provide affordable entry points for investors while maintaining easy access to local attractions and Madison commuters seeking alternative accommodations.
• Properties near Mandt Park and the community center attract families and sports teams visiting for tournaments and events, providing steady booking potential.
• The historic residential areas featuring Victorian and early 20th-century homes near the Stoughton Historical Society offer unique character properties that command premium pricing from guests seeking authentic small-town experiences.
• Neighborhoods along the Yahara River trail system appeal to outdoor enthusiasts and cyclists, particularly during warmer months when trail usage peaks and visitors seek convenient lodging options.

Yes, but only where zoning permits short-term rentals and every required license is current.

• Short-term rental regulations in Stoughton, Wisconsin require property owners to obtain a conditional use permit through the city's planning department.
• Occupancy limits are generally restricted to two guests per bedroom plus two additional guests, with a maximum of 10 occupants total.
• Owner-occupancy requirements vary by zoning district, with some residential zones requiring the owner to live on-site or within the city limits.
• Zoning restrictions primarily limit short-term rentals to single-family residential districts and certain mixed-use areas, with prohibitions in multi-family zones and near schools or parks.
• The registration process involves submitting detailed property information, proof of insurance, emergency contact details.
• Recent regulatory changes implemented around 2019-2021 include stricter noise ordinances with quiet hours from 10 PM to 7 AM, mandatory 24-hour local contact person requirements.

Tax rates vary by jurisdiction; licensing, inspection, and insurance costs are additional.

• Short-term rentals in Stoughton, Wisconsin are subject to Wisconsin's state lodging tax of 5% on gross receipts, plus Dane County's room tax of 6%.
• Property owners must register their short-term rental with the City of Stoughton and obtain a business license, which typically costs approximately $50-75 annually.
• Wisconsin requires sellers permits for tax collection purposes, usually costing $20-30 for registration.
• Additional costs may include zoning compliance fees of $25-50, inspection fees ranging from $75-125, and potential conditional use permit fees of $200-400 depending on the property's zoning classification.
• Property owners must also remit collected room taxes monthly to the Wisconsin Department of Revenue and Dane County, with potential penalties of 18% annually plus interest for late payments.