Is Willmar, Minnesota Good for Airbnb Investment?

To start an Airbnb in Willmar, Minnesota, begin by researching local regulations through the City of Willmar Planning Department, as the city requires short-term rental operators to obtain a conditional use permit and business license, with properties needing to meet specific safety standards including smoke detectors, carbon monoxide detectors, and fire extinguishers. Contact Kandiyohi County for any additional county-level requirements and ensure compliance with Minnesota state tax obligations including sales tax registration. Find a suitable property in residential zones that allow short-term rentals, focusing on areas near downtown Willmar or close to Kandiyohi County lakes for tourist appeal, with average property prices ranging $150,000-$250,000 for suitable homes. Furnish the property with essential amenities including comfortable beds, linens, towels, kitchen supplies, WiFi, and local guidebooks, budgeting approximately $8,000-$15,000 for complete furnishing. Create compelling listings on Airbnb, VRBO, and Booking.com with professional photos highlighting the property's proximity to Glacial Lakes State Park, downtown attractions, and seasonal activities, setting competitive rates around $80-$120 per night based on local market analysis. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating key exchanges through lockboxes or smart locks, and maintaining relationships with local cleaning services and maintenance contractors to ensure consistent guest experiences and positive reviews.

To identify profitable short-term rental properties in Willmar, Minnesota, focus on locations near Kandiyohi County's recreational lakes, downtown business district proximity for corporate travelers, and areas within walking distance of Ridgewater College or major employers like Jennie-O Turkey Store and MinnWest Technology Campus. Target 2-4 bedroom single-family homes or lake cabins with amenities like updated kitchens, multiple bathrooms, outdoor spaces, and lake access or views, as these command premium rates of $80-150 per night compared to basic properties at $60-90. Conduct pricing analysis using AirDNA and Mashvisor to evaluate seasonal demand patterns, with peak rates during summer lake season (June-August) and hunting seasons, while analyzing comparable properties within 10-mile radius including Spicer and New London lake areas. Research competition through Airbnb and VRBO searches, identifying gaps in luxury lake rentals or corporate-friendly accommodations, and monitor occupancy rates of existing STRs which typically range 40-65% annually in the Willmar market. Utilize tools like Rabbu, AllTheRooms, and local MLS data through Edina Realty or RE/MAX Results, while connecting with Willmar Lakes Area Chamber of Commerce for tourism insights and reviewing city ordinances since Willmar requires STR licensing and has specific zoning restrictions that affect profitability potential.

To obtain an Airbnb/STR permit in Willmar, Minnesota, contact the Willmar City Hall at 333 Southwest 6th Street or call 320-235-4913 to begin the application process through the Community Development Department. Required documents typically include a completed short-term rental license application, proof of property ownership or lease agreement with landlord consent, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental unit, emergency contact information for a local representative within 30 miles, and proof of compliance with fire safety codes including smoke and carbon monoxide detectors. The application fee is estimated at $150-250 annually, with additional inspection fees of approximately $75-100. Submit your complete application package to the city, schedule a required property inspection with the fire marshal and building inspector, and await approval which typically takes 4-6 weeks from submission. Willmar requires STR operators to maintain a guest registry, limit occupancy to 2 persons per bedroom plus 2 additional guests, provide adequate parking spaces, ensure quiet hours from 10 PM to 7 AM, and display the permit number in all advertising. Properties must meet residential building codes, have proper egress windows in bedrooms, and maintain the property in accordance with city housing standards, with annual renewal required by December 31st each year.

Short-term rentals (STRs) are legal in Willmar, Minnesota, but operate under the city's zoning and business licensing requirements. The city requires STR operators to obtain a business license and comply with residential zoning regulations, which generally permit home-sharing activities in most residential districts with some restrictions on frequency and occupancy limits. Properties must meet basic safety standards including smoke detectors and carbon monoxide detectors, and operators are typically required to provide local contact information for guests. Willmar has not implemented a comprehensive STR-specific ordinance like larger Minnesota cities such as Minneapolis or St. Paul, instead relying on existing zoning codes and business regulations to govern these activities. The city has seen moderate growth in STR activity since 2018, particularly around Kandiyohi County events and recreational areas, but has not faced the same regulatory pressures as tourist-heavy destinations, resulting in a relatively permissive environment for property owners seeking to operate short-term rentals within standard residential use parameters.

The best areas for Airbnb investment in Willmar, Minnesota include the downtown district near Kandiyohi County Historical Society and Robbins Island Park, which attracts visitors for local events and historical tourism. The lakefront areas around Foot Lake and Eagle Lake are prime locations due to seasonal tourism, fishing, and water recreation activities that draw visitors from Minneapolis-St. Paul metro area year-round. The medical district near Rice Memorial Hospital presents opportunities for medical tourism and family visits to patients. Properties near the Willmar Conference Center and downtown business district capture corporate travelers visiting agricultural companies like Jennie-O Turkey Store and other regional businesses. The residential areas near Ridgewater College attract parents visiting students and college-related events. Neighborhoods close to the Willmar Municipal Airport serve business travelers, while areas near the Glacial Lakes State Trail system appeal to outdoor enthusiasts and recreational vehicle tourists exploring central Minnesota's lake country.

In Willmar, Minnesota, Airbnb hosts are subject to Minnesota state sales tax of 6.875% on lodging rentals, which applies to stays of less than 30 consecutive days. The city of Willmar imposes a local lodging tax of approximately 3% on short-term rental accommodations. These taxes are typically collected from guests at the time of booking through Airbnb's automatic tax collection system, which remits payments directly to the Minnesota Department of Revenue for state taxes, while local taxes may require separate registration and remittance by hosts to the City of Willmar on a monthly or quarterly basis depending on volume. Hosts must register for a Minnesota sales tax permit and may need a separate business license from Willmar. Exemptions generally include stays of 30 days or longer, rentals to permanent residents, and certain government or nonprofit organization bookings. The combined tax rate of approximately 9.875% makes Willmar's short-term rental tax burden relatively moderate compared to larger Minnesota cities, with collection and remittance procedures streamlined through Airbnb's platform for state obligations while local tax compliance remains the host's responsibility.

Starting an Airbnb in Willmar, Minnesota requires approximately $180,000-220,000 in total initial investment. Property purchase costs around $150,000-180,000 based on median home prices in the area as of 2023. Furnishing a 2-3 bedroom property typically costs $8,000-12,000 including beds, linens, kitchen essentials, living room furniture, and basic appliances. Initial setup expenses including professional photography, listing creation, and basic renovations run $2,000-3,500. Permits and licensing fees in Willmar and Kandiyohi County total approximately $300-800, including business licenses and potential short-term rental permits. Insurance costs increase by $800-1,200 annually for short-term rental coverage. Utility setup and deposits for electricity, gas, water, internet, and cable services cost around $500-800 initially. First six months of operating costs including utilities ($1,800), cleaning supplies and services ($1,200), maintenance reserves ($1,000), platform fees to Airbnb and VRBO ($2,400 assuming 20% occupancy), marketing ($500), and miscellaneous expenses ($600) total approximately $6,500, bringing the complete startup investment to roughly $168,000-204,000 depending on property choice and furnishing quality.

Airbnb properties in Willmar, Minnesota typically generate annual revenues between $15,000-$35,000 depending on property size and location, with average daily rates ranging from $75-$120 during peak summer months and $50-$85 in winter. 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. Properties near Kandiyohi County lakes or downtown Willmar command premium rates, with lakefront cabins achieving 65-75% occupancy rates and profit margins of 25-35%, while standard residential properties typically see 45-55% occupancy with 15-25% profit margins. Success factors include proximity to Ridgewater College, MinnWest Technology Campus, seasonal lake activities, and the annual Willmar Fest, with properties offering amenities like boat access, fishing equipment, or business traveler accommodations performing significantly better. The market benefits from limited hotel inventory in the area, though profitability is highly seasonal with 60-70% of annual revenue generated between May and September, requiring careful cash flow management during slower winter months when occupancy can drop to 20-30%.

Airbnb investments in Willmar, Minnesota typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, based on average property acquisition costs of $150,000-$250,000 and nightly rates of $75-$120 during peak seasons. The market benefits from Willmar's position as a regional hub with Ridgewater College, CentraCare Health, and agricultural businesses driving consistent demand, particularly during summer months and college events. Properties generally reach profitability within 18-24 months, with occupancy rates averaging 55-65% annually, though winter months see reduced demand typical of rural Minnesota markets. Higher-end properties near Foot Lake or downtown areas command premium rates of $100-$150 per night and can achieve 12-15% ROI, while standard residential properties in established neighborhoods typically perform at the lower end of the range, with gross rental yields of 10-14% before expenses.

STRSearch is a national platform that helps investors identify profitable short-term rental properties across markets including Willmar, Minnesota. In the Willmar area, local real estate agents like those at Coldwell Banker Schmidt Realtors, RE/MAX Results, and Century 21 Atwood have experience with investment properties and can assist with Airbnb acquisitions. Keller Williams agents in the region also work with investors seeking vacation rental properties. National services include Mashvisor, which provides Airbnb analytics and property recommendations, AirDNA for market data and investment analysis, and Awning for turnkey Airbnb investment services. BiggerPockets connects investors with local professionals and resources, while Roofstock and Arrived Homes offer investment property platforms that may include short-term rental opportunities. Local property management companies like Central Minnesota Property Management can provide insights into rental markets, and vacation rental management firms such as RedAwning and Vacasa offer services that can help evaluate potential Airbnb investments in the Willmar market.