Is Woodbury, Minnesota Good for Airbnb Investment?

To start an Airbnb in Woodbury, Minnesota, begin by researching local regulations as Woodbury requires short-term rental operators to obtain a business license and comply with zoning ordinances that typically allow rentals in residential areas with restrictions on occupancy and parking. Contact Woodbury City Hall at 651-714-3500 to obtain the necessary permits including a business license ($50-100 annually) and ensure compliance with fire safety codes and health department requirements. Find a suitable property by purchasing or leasing a home in residential zones, ensuring it meets minimum square footage requirements and has adequate parking spaces as mandated by city code. Furnish the property with quality furniture, linens, kitchen essentials, and safety equipment including smoke detectors, carbon monoxide detectors, and fire extinguishers as required by Minnesota state law. Create your listing on Airbnb with professional photos, competitive pricing (average $80-150/night in Woodbury as of 2023), and detailed descriptions highlighting proximity to 3M headquarters, Tamarack Nature Center, and Twin Cities attractions. Manage your property by establishing check-in procedures, maintaining cleanliness standards, responding promptly to guests, collecting and remitting Minnesota sales tax (6.875%) and Woodbury lodging tax if applicable, and keeping detailed records for tax purposes while ensuring compliance with occupancy limits typically set at 2 guests per bedroom plus 2 additional guests.

To identify profitable short-term rental properties in Woodbury, Minnesota, focus on locations within 15-20 minutes of downtown St. Paul and Minneapolis, particularly near major employers like 3M headquarters, HealthEast facilities, and the Woodbury Lakes shopping district. Target 3-4 bedroom single-family homes or townhomes built after 1990 with modern amenities, full kitchens, multiple bathrooms, parking, and outdoor spaces, as these appeal to business travelers and families visiting the Twin Cities metro area. Conduct pricing analysis using AirDNA and Mashvisor to identify properties where potential STR revenue of $150-250 per night can generate 15-25% higher returns than traditional long-term rentals, typically requiring purchase prices between $300,000-500,000 in Woodbury's market. Research competition by analyzing existing Airbnb and VRBO listings within 3-mile radius, noting occupancy rates average 65-75% annually with peak demand during summer months and corporate travel periods. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through Edina Realty or RE/MAX Results, while consulting Washington County zoning regulations and Woodbury city ordinances regarding short-term rental permits, which typically require registration and compliance with residential zoning restrictions that may limit STR operations in certain neighborhoods.

To obtain an Airbnb/STR permit in Woodbury, Minnesota, you must first contact the City of Woodbury Planning Department at City Hall located at 8301 Valley Creek Road to determine current short-term rental regulations, as the city has specific zoning requirements that may restrict STRs to certain residential districts. Submit an application through the city's permitting system which typically requires a completed short-term rental license application form, proof of property ownership or lease agreement with landlord consent, a site plan showing parking arrangements, floor plan of the rental unit, proof of liability insurance (minimum $1 million coverage), contact information for a local responsible party available 24/7, and evidence of compliance with fire safety codes including smoke and carbon monoxide detectors. Required documents also include a business license from the state of Minnesota, sales tax permit, and acknowledgment of city noise ordinances and occupancy limits. Application fees generally range from $200-500 annually with additional inspection fees of approximately $100-200. The approval timeline typically takes 4-8 weeks depending on completeness of application and any required inspections. Woodbury specifically requires STRs to maintain residential character, limits occupancy to 2 people per bedroom plus 2 additional guests, mandates adequate off-street parking (typically 2 spaces minimum), and requires the property to be the owner's primary residence or meet specific zoning criteria for non-owner occupied rentals.

Short-term rentals (STRs) are legal in Woodbury, Minnesota, but operate under the city's zoning regulations and licensing requirements established around 2019-2020. The city requires STR operators to obtain a business license and comply with specific operational standards including occupancy limits, parking requirements, and noise restrictions. STRs are generally permitted in residential zones but must maintain the residential character of neighborhoods, with the city prohibiting commercial-style operations that would disrupt residential areas. Woodbury requires property owners to be responsive to neighbor complaints and maintain properties according to city codes, with violations potentially resulting in license revocation. The city has implemented these regulations to balance property owner rights with neighborhood preservation, following trends seen across the Twin Cities metro area where municipalities have sought to regulate the growing STR market that expanded significantly with platforms like Airbnb and VRBO in the late 2010s.

The best Airbnb investment areas in Woodbury, Minnesota include the neighborhoods near Tamarack Village and along Valley Creek Road, which offer proximity to major corporate headquarters like 3M and State Farm that drive consistent business travel demand. The areas around Woodbury Lakes shopping center and near Interstate 94 corridors are particularly attractive due to their accessibility for travelers visiting the Twin Cities metro area while seeking more affordable accommodations outside Minneapolis-St. Paul. Neighborhoods close to Carver Lake Park and the Woodbury Golf Club appeal to leisure travelers and families attending youth sports tournaments at the numerous athletic complexes in the area. The residential areas near HealthEast Sports Center benefit from hockey tournaments and sporting events that bring visiting teams and families year-round. Properties within walking distance of the downtown Village area and near major employers like Target's distribution facilities capture both corporate travelers and visitors to nearby attractions, while the proximity to major highways makes these locations convenient for guests exploring broader Minnesota attractions or conducting business throughout the metro area.

In Woodbury, Minnesota, Airbnb hosts are subject to multiple lodging taxes including the state lodging tax of 3% on gross receipts, Washington County's lodging tax of 3%, and potentially the City of Woodbury's transient lodging tax which is typically around 3-4%. These taxes apply to short-term rentals under 30 days and are collected from guests at the time of booking, with Airbnb automatically collecting and remitting state and county taxes on behalf of hosts through their platform since approximately 2018-2019. Hosts must register with the Minnesota Department of Revenue and may need to register locally with Woodbury for city taxes, filing monthly or quarterly returns depending on volume. The state requires remittance by the 20th of the following month, while local taxes follow similar schedules. Exemptions typically include stays over 30 consecutive days, certain government and nonprofit travelers, and in some cases religious or charitable organizations. Hosts should verify current local tax requirements with the City of Woodbury as municipal lodging tax rates and collection procedures can change, and some cities have implemented additional registration requirements or caps on short-term rental operations.

The total cost to start an Airbnb in Woodbury, Minnesota is approximately $385,000-$425,000. Property purchase costs around $350,000 based on median home prices in the area as of 2023. Furnishing a 3-bedroom property requires $15,000-$25,000 for quality furniture, bedding, kitchenware, and decor suitable for short-term rentals. Initial setup costs including professional photography, listing creation, smart locks, and welcome materials total $2,000-$3,000. Permits and fees in Woodbury include business license ($100), short-term rental permit ($200-$500), and potential HOA approval fees totaling $800-$1,200. Insurance for short-term rentals costs $2,000-$3,000 annually, with the first year paid upfront. Utilities including electricity, gas, water, internet, and cable average $300-$400 monthly or $1,800-$2,400 for six months. First six months operating costs including cleaning services ($150 per turnover), supplies, maintenance, platform fees (3% of bookings), and marketing total approximately $8,000-$12,000 assuming 60% occupancy rates and $150 average daily rates common in the Minneapolis-St. Paul suburban market.

Airbnb properties in Woodbury, 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 ($30-50 per turnover), property management costs (15-25% of revenue), utilities ($150-300 monthly), insurance premiums ($800-1,500 annually), and maintenance expenses averaging $2,000-4,000 yearly. Profit margins for successful Woodbury Airbnb operators typically range from 25-45% after all expenses, with properties near Tamarack Hills Golf Course and those featuring amenities like hot tubs or game rooms commanding premium rates. Success factors include proximity to major employers like 3M headquarters in nearby Maplewood, maintaining 4.8+ star ratings, professional photography, and strategic pricing during peak seasons including summer months and major Twin Cities events. Properties within 20 minutes of downtown St. Paul perform particularly well, with some hosts reporting occupancy rates of 70-85% and net annual profits of $12,000-$18,000 on well-managed single-family homes, though newer hosts often experience 6-12 month ramp-up periods before achieving optimal profitability.

Based on Woodbury, Minnesota market conditions, 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 Woodbury Lakes shopping area and close to major employers like 3M, HealthPartners, and State Farm tend to perform better, with investors commonly seeing 9-14% annual returns. The average timeframe to profitability is 18-24 months, with initial investment recovery typically occurring within 7-9 years. Single-family homes in neighborhoods like Wedgewood and Bailey's Arbor command nightly rates of $120-180, while townhomes average $90-140 per night, with occupancy rates of 65-75% annually. Cash-on-cash returns are strongest in the $300,000-450,000 property range, where investors can expect 8-12% returns after accounting for mortgage payments, property management fees of 15-25%, and maintenance costs averaging $3,000-5,000 annually.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Woodbury, Minnesota. Local real estate agents like those at RE/MAX Results, Coldwell Banker Realty, and Edina Realty have experience helping investors find Airbnb-suitable properties in the Twin Cities metro area including Woodbury. National services such as Mashvisor, BiggerPockets, and AirDNA provide market analysis and property identification tools for short-term rental investments in the Minneapolis-St. Paul region. Local property management companies like RedAwning, AvantStay, and Twin Cities-based STR management firms can assist with both property acquisition advice and ongoing management. Real estate investment groups such as the Minnesota Real Estate Investors Association (MNREIA) and local meetup groups provide networking opportunities with agents and investors familiar with Airbnb regulations in Washington County where Woodbury is located. Additionally, companies like Roofstock and Arrived Homes occasionally feature turnkey short-term rental properties in Minnesota markets, while local mortgage brokers specializing in investment properties can facilitate financing for Airbnb acquisitions in Woodbury's residential neighborhoods.