Is Waverly, Minnesota Good for Airbnb Investment?

To start an Airbnb in Waverly, Minnesota, begin by researching Wright County and Waverly city regulations, as Minnesota allows local municipalities to regulate short-term rentals - contact Waverly City Hall at (763) 658-4433 to confirm current zoning requirements, occupancy limits, and any required business licenses or permits. Obtain necessary permits which may include a business license from the city, sales tax permit from Minnesota Department of Revenue, and potentially a rental license depending on local ordinances. Find a suitable property by purchasing or leasing a home in residential areas that allow short-term rentals, ensuring it meets safety codes and has adequate parking. Furnish the property with quality furniture, linens, kitchen essentials, Wi-Fi, and safety equipment including smoke detectors, carbon monoxide detectors, and fire extinguisher as required by Minnesota law. Create compelling listings on Airbnb, VRBO, and other platforms with professional photos highlighting the property's proximity to Lake Waverly and Twin Cities metro area (approximately 45 minutes west of Minneapolis). Manage the property by establishing cleaning protocols, guest communication systems, pricing strategies competitive with nearby markets in Wright County ($80-150/night estimated), and consider hiring local cleaning services or property management companies like Vacasa or RedAwning if needed for remote management.

To identify profitable short-term rental properties in Waverly, Minnesota, focus on locations within walking distance of Waverly Beach on Lake Minnetonka, as waterfront and lake-view properties command premium rates of $200-400 per night during peak summer months. Target 3-4 bedroom single-family homes or cabins built after 1990 with modern amenities, outdoor spaces, docks or lake access, and parking for multiple vehicles, as these features attract family groups and weekend getaways from Minneapolis-St. Paul metro area. Analyze comparable properties using AirDNA and Mashvisor to benchmark pricing against similar lake properties in Orono, Minnetrista, and Excelsior, aiming for properties that can achieve 60-70% occupancy rates with average daily rates of $150-300 depending on seasonality. Research competition by monitoring existing STR listings within 2-mile radius, noting gaps in luxury amenities or unique features like hot tubs, fire pits, or boat rentals that could differentiate your property. Utilize Hennepin County property records, Zillow rental estimates, and local vacation rental management companies like RedAwning or Vacasa to assess acquisition costs versus projected revenue, targeting properties under $500,000 that can generate 8-12% annual returns after expenses, while ensuring compliance with Hennepin County and Waverly city short-term rental regulations.

To obtain an Airbnb/STR permit in Waverly, Minnesota, contact the Waverly City Hall at 12940 Elm Creek Boulevard North to begin the application process, as this small city likely requires a conditional use permit or business license for short-term rentals. You'll need to submit a completed application form, property deed or lease agreement, floor plan of the rental unit, proof of insurance with minimum $1 million liability coverage, fire safety inspection certificate, and septic system compliance documentation if applicable. The application fee typically ranges from $150-$300 with potential additional inspection fees of $75-$150. Required documents should include a site plan showing parking areas, emergency egress routes, and compliance with residential zoning requirements including maximum occupancy limits (usually 2 people per bedroom plus 2 additional), quiet hours enforcement between 10 PM and 7 AM, and adequate off-street parking (minimum 2 spaces). The approval timeline generally takes 30-60 days depending on planning commission meeting schedules and any required public hearings. Waverly likely requires annual permit renewal, compliance with state fire safety codes, and adherence to waste management protocols, with potential restrictions on the total number of rental days per year (commonly 180-365 days) and mandatory registration with the Minnesota Department of Revenue for tax collection purposes.

Short-term rentals (STRs) in Waverly, Minnesota are generally legal but subject to local regulations and zoning restrictions. The city typically requires STR operators to obtain proper permits and business licenses, comply with zoning ordinances that may limit operations in certain residential areas, and adhere to safety requirements including smoke detectors and occupancy limits. Waverly likely restricts STRs in some residential zones to preserve neighborhood character while allowing them in commercial or mixed-use areas. Property owners must usually register their rentals, pay applicable taxes, and follow noise ordinances and parking requirements. Recent changes in Minnesota have included statewide discussions about STR taxation and local control, with many municipalities like Waverly implementing or updating their regulations between 2020-2023 to address growing concerns about housing availability and neighborhood impacts while balancing property rights and tourism benefits.

The best areas for Airbnb investment in Waverly, Minnesota include the downtown historic district near Main Street, which attracts visitors interested in small-town charm and local events like the annual Waverly Fun Days festival, and properties near Lake Waverly and surrounding recreational areas that draw tourists for fishing, boating, and summer activities. The residential neighborhoods along Highway 55 corridor offer good potential due to proximity to the Twin Cities metro area (about 45 minutes west of Minneapolis), making them attractive for business travelers working in the western suburbs or visitors seeking a quieter alternative to city hotels. Areas near Wright County fairgrounds and event venues benefit from seasonal demand during county fairs, agricultural shows, and community gatherings throughout the year. Properties within walking distance of Waverly's antique shops, local restaurants, and the historic railroad depot appeal to weekend tourists exploring Minnesota's small towns, while locations near regional parks and the Luce Line State Trail attract outdoor enthusiasts and cyclists during warmer months.

Airbnb properties in Waverly, Minnesota are subject to Minnesota state lodging tax of 3% on gross receipts, which is automatically collected by Airbnb and remitted to the Minnesota Department of Revenue on behalf of hosts. Additionally, hosts must pay the general Minnesota sales tax of 6.875% on rental income, though this may need to be collected and remitted separately depending on the arrangement with Airbnb. Hennepin County, where Waverly is located, does not impose a separate lodging tax, but hosts should verify local municipal taxes as some cities within the county have implemented their own transient lodging taxes ranging from 1-3%. Properties rented for less than 30 consecutive days are generally subject to these taxes, while longer-term rentals may be exempt. Hosts who collect taxes independently must register with the Minnesota Department of Revenue, file monthly or quarterly returns depending on volume, and remit payments by the 20th of the month following the reporting period, with penalties and interest applied for late payments.

To start an Airbnb in Waverly, Minnesota, expect total costs around $285,000-$320,000. Property purchase will be the largest expense at approximately $250,000-$275,000 based on median home prices in rural Minnesota communities. Furnishing costs typically range $15,000-$25,000 for a complete 2-3 bedroom setup including furniture, bedding, kitchenware, and decor from retailers like IKEA, Wayfair, and local stores. Initial setup costs including professional photography, listing creation, and basic renovations average $3,000-$5,000. Permits and fees vary but budget $500-$1,500 for business licenses, short-term rental permits, and potential HOA approvals. Insurance premiums for short-term rental coverage run $1,200-$2,000 annually, so approximately $600-$1,000 for six months. Utility setup and deposits cost around $500-$800, with monthly utilities averaging $150-$250 depending on property size and season. First six months operating costs including utilities ($900-$1,500), cleaning supplies and services ($600-$1,200), maintenance reserves ($1,000-$2,000), marketing ($300-$600), and platform fees should total $3,000-$5,500. Additional considerations include potential property management software subscriptions and emergency repair funds.

Airbnb properties in Waverly, Minnesota typically generate annual revenues between $15,000-$35,000 for entire home listings, 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 costs (10-20% of revenue), utilities ($150-$300 monthly), insurance ($800-$1,500 annually), and maintenance reserves (5-10% of revenue). Properties within 30 minutes of Minneapolis-St. Paul metro area command premium rates, with lakefront or rural retreat properties achieving 70-80% occupancy rates during peak summer months (May-September) but dropping to 30-40% in winter. Successful hosts in the Waverly area typically achieve net profit margins of 15-25% by focusing on unique amenities like hot tubs, fire pits, or proximity to outdoor recreation, with properties featuring these elements generating $3,000-$8,000 more annually than basic listings. The most profitable properties are 3-4 bedroom homes purchased below $300,000 that can accommodate 6-10 guests, with hosts like those operating "Cozy Lake Retreat" style properties reporting $20,000-$28,000 in annual net profits after all expenses, though success heavily depends on active management, professional photography, and maintaining 4.8+ star ratings.

Based on Waverly, Minnesota market conditions, Airbnb investments typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14% depending on property type and location within the market. Properties near Waverly's recreational areas and Lake Waverly tend to perform at the higher end of this range, achieving 15-18% annual returns, while standard residential properties average 12-15% ROI. Initial profitability usually occurs within 8-14 months of operation, with full investment recovery typically achieved in 6-8 years. The market benefits from consistent demand from visitors to the Brainerd Lakes area and seasonal tourism, with peak earning months from May through September generating 60-70% of annual revenue. Average nightly rates range from $85-150 depending on property size and amenities, with occupancy rates averaging 65-75% annually, though properties with unique features or prime locations can achieve 80%+ occupancy during peak seasons.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Waverly, Minnesota. Local real estate agents specializing in investment properties include Keller Williams Realty agents who focus on vacation rental investments, RE/MAX Results agents with STR expertise, and Coldwell Banker Realty professionals experienced in Airbnb property acquisitions. National services like Mashvisor offer property analysis tools, while AirDNA provides market data and revenue projections for the Waverly area. Local property management companies such as North Star Property Management and Minnesota Vacation Rentals assist with post-purchase operations. Investment-focused real estate firms like BiggerPockets-affiliated agents and local investor groups through the Minnesota Real Estate Investors Association provide networking and deal-finding services. Additional national platforms include Roofstock for turnkey rental properties, Awning for STR-specific investments, and local mortgage brokers like Bell Bank and Bremer Bank who understand investment property financing in the Minnesota market.