Is Sun Prairie, Wisconsin Good for Airbnb Investment?

To start an Airbnb in Sun Prairie, Wisconsin, begin by researching local zoning laws and regulations through the Sun Prairie Planning Department, as the city requires short-term rental operators to obtain a conditional use permit and business license, with properties limited to owner-occupied dwellings or properties in specific zoning districts. Contact the Sun Prairie City Clerk's office to apply for a business license ($50-100 annually) and submit a conditional use permit application ($300-500) to the Plan Commission, which includes providing site plans, parking arrangements, and neighbor notification requirements. Find a suitable property in residential zones that allow short-term rentals, ensuring it meets safety requirements including smoke detectors, carbon monoxide detectors, and emergency egress windows as mandated by Wisconsin state law and Dane County health codes. Furnish the space with quality furniture, linens, kitchen essentials, and amenities while ensuring compliance with Wisconsin's landlord-tenant laws and accessibility requirements where applicable. Create your Airbnb listing with professional photos, competitive pricing based on Sun Prairie's average nightly rates of $80-150, and highlight proximity to attractions like Angell Park Speedway and downtown Madison (15 minutes away). Manage your property by establishing check-in procedures, maintaining cleanliness standards, responding promptly to guests, collecting Wisconsin's 5.5% state sales tax plus Dane County's 0.5% room tax, and keeping detailed records for annual business license renewal and tax reporting to both the Wisconsin Department of Revenue and the City of Sun Prairie.

To identify profitable short-term rental properties in Sun Prairie, Wisconsin, focus on locations within 15-20 minutes of downtown Madison, near University of Wisconsin campus, or close to local attractions like Angell Park Speedway and Token Creek County Park. Target 2-4 bedroom single-family homes or condos built after 1990 with modern amenities, full kitchens, parking, and outdoor spaces, as these appeal to families visiting UW students or business travelers to the Madison area. Conduct pricing analysis using AirDNA and Mashvisor to evaluate average daily rates ($80-150 typical for the market), occupancy rates (aim for 60-70% annually), and seasonal demand patterns, with peak periods during UW events, summer months, and fall football season. Research competition by analyzing existing STR listings within 5-mile radius on Airbnb and VRBO, noting their pricing, amenities, and guest reviews to identify market gaps. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through Wisconsin Realtors Association, while consulting Sun Prairie city regulations for STR licensing requirements and zoning restrictions, and consider proximity to Epic Systems headquarters in Verona which drives consistent business travel demand to the area.

To obtain an Airbnb/STR permit in Sun Prairie, Wisconsin, you must first contact the Sun Prairie Planning and Development Department at City Hall located at 300 East Main Street to submit an application for a short-term rental license. Required documents typically include a completed application form, proof of property ownership or lease agreement, floor plan of the rental unit, proof of liability insurance (minimum $1 million coverage), emergency contact information, and a site plan showing parking areas. The application fee is approximately $150-200 with an annual renewal fee of around $100-125. You must also obtain a business license from the City Clerk's office for an additional $25-50 fee. The property must comply with Sun Prairie's zoning requirements, maintain adequate off-street parking (typically 2 spaces minimum), pass a safety inspection including smoke and carbon monoxide detectors, and meet occupancy limits based on square footage and bedrooms. The approval timeline is generally 4-6 weeks from submission of a complete application, during which city staff will review the application and conduct an inspection. Once approved, you must display the permit number in all rental listings and maintain compliance with noise ordinances, guest registration requirements, and annual renewal deadlines to keep your permit active.

Short-term rentals (STRs) are legal in Sun Prairie, Wisconsin, but are subject to municipal regulations and licensing requirements. The city requires STR operators to obtain a business license and comply with zoning ordinances, with most residential properties in single-family and multi-family zones permitted to operate as short-term rentals. Properties must meet safety standards including smoke and carbon monoxide detectors, and operators must provide contact information for a responsible party available 24/7. The city has implemented occupancy limits based on property size and requires compliance with parking requirements and noise ordinances. Recent changes around 2022-2023 included updated licensing procedures and enhanced enforcement mechanisms to address neighbor complaints and ensure compliance with city codes. STRs are generally prohibited in certain commercial districts where residential use is not permitted, and the city maintains the authority to revoke licenses for repeated violations of municipal ordinances or disturbance complaints.

The most promising Airbnb investment areas in Sun Prairie, Wisconsin include the downtown historic district near Main Street, which attracts visitors to local festivals like the Sweet Corn Festival and offers walkable access to restaurants and shops. The neighborhoods near Angell Park Speedway are excellent for short-term rentals during racing season from May through September, drawing motorsports enthusiasts from across the Midwest. Areas close to the Prairie Athletic Club and business districts along Highway 151 cater to corporate travelers visiting Epic Systems headquarters in nearby Verona and other Madison-area tech companies. The residential neighborhoods near Token Creek County Park and the Ice Age Trail appeal to outdoor recreation tourists seeking hiking, cross-country skiing, and nature activities. Properties within a 10-15 minute drive of the Dane County Regional Airport capture business travelers and tourists heading to Madison events, while locations near the Sun Prairie Family Aquatic Center and youth sports complexes benefit from families attending tournaments and competitions throughout the year.

In Sun Prairie, Wisconsin, Airbnb hosts are subject to Wisconsin state sales tax of 5% and Dane County's room tax of 8%, totaling 13% in lodging taxes on short-term rental stays under 30 days. The Wisconsin Department of Revenue requires hosts to register for a seller's permit and collect these taxes from guests at the time of booking or check-in, with monthly remittance due by the 20th of the following month for properties generating over $4,000 annually in rental income. Dane County's room tax must be remitted quarterly to the Dane County Clerk's office, with returns due by the last day of the month following each quarter. Airbnb may collect and remit these taxes automatically for hosts who opt into their tax collection service, which began around 2018 for Wisconsin properties. Exemptions typically apply to stays of 30 days or longer, which are considered long-term rentals rather than transient lodging, and to rentals where the total consideration is under $10 per day, though such low-rate exemptions rarely apply to typical Airbnb properties in the Sun Prairie market.

The total cost to start an Airbnb in Sun Prairie, Wisconsin is approximately $285,000-$315,000. Property purchase costs around $250,000 based on median home prices in the area as of 2023-2024. Furnishing a 2-3 bedroom property requires $15,000-$20,000 for quality furniture, bedding, kitchen essentials, and decor to create an attractive rental space. Initial setup costs including professional photography, listing creation, welcome materials, and basic supplies total $2,000-$3,000. Permits and fees include business license ($100-$200), short-term rental permit ($300-$500), and potential HOA approvals. Insurance for short-term rentals runs $1,500-$2,500 annually, significantly higher than 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 per turnover), maintenance reserves ($200 monthly), property management software ($50 monthly), marketing ($100 monthly), and miscellaneous supplies ($100 monthly), totaling approximately $3,600-$4,800. Additional considerations include property taxes ($3,000-$4,000 annually) and potential renovation costs if the property needs updates to meet rental standards.

Airbnb properties in Sun Prairie, Wisconsin 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 ($25-$40 per turnover), property management (10-20% of revenue), utilities ($150-$300 monthly), insurance ($800-$1,500 annually), and maintenance costs averaging $2,000-$4,000 yearly. Net profit margins typically range from 15-35% for well-managed properties, with successful hosts achieving higher margins through strategic pricing, excellent guest experiences, and efficient operations. Properties within 15 minutes of Madison perform better due to business traveler demand, while homes near Sun Prairie's downtown area or with unique features like hot tubs or large outdoor spaces command premium rates. A typical 3-bedroom home purchased for $280,000 in Sun Prairie can generate approximately $28,000 in annual revenue with $18,000 in expenses, yielding roughly $10,000 in annual profit (36% margin), though success heavily depends on occupancy rates averaging 60-75%, seasonal demand fluctuations, and the host's ability to maintain high ratings above 4.7 stars while managing guest turnover efficiently.

Based on Sun Prairie, Wisconsin market conditions as of 2023-2024, 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 downtown Sun Prairie or close to Madison (approximately 15 minutes away) tend to perform better due to business traveler demand and weekend visitors. Initial profitability usually occurs within 12-18 months after accounting for setup costs, furnishing, and marketing expenses. Three-bedroom homes in established neighborhoods like Cannery District or near Angell Park show stronger performance with average nightly rates of $120-180, while smaller properties or condos typically achieve $80-130 per night. Occupancy rates generally range from 60-75% annually, with peak seasons during summer months and University of Wisconsin events driving higher demand from nearby Madison. Cash-on-cash returns can reach the higher end of the range (8-10%) when properties are purchased below market value or in emerging neighborhoods, with total investment recovery typically achieved within 8-10 years including appreciation.

STRSearch is a national platform that specializes in identifying profitable short-term rental investment properties and provides market analysis for Airbnb investments in Sun Prairie, Wisconsin. Local real estate agents serving the Sun Prairie market include Realty Executives Cooper Spransy, First Weber Realtors, and RE/MAX Preferred, with agents like those at Stark Company Realtors who understand the Madison metropolitan area's vacation rental potential. National services include Mashvisor, which offers Airbnb analytics and property search tools, AirDNA for market data and revenue projections, and Awning for full-service Airbnb property management and investment guidance. BiggerPockets connects investors with local Wisconsin real estate professionals experienced in short-term rentals, while companies like RedAwning and Vacasa provide property management services that can help investors evaluate potential returns. Local property management companies such as Host Fully and regional firms like Wisconsin Property Management Group can assist with operational aspects, and mortgage brokers like Summit Credit Union and Associated Bank, both with Wisconsin presence, offer financing options for investment properties in the Sun Prairie area.