Is Zion, Illinois Good for Airbnb Investment?

To start an Airbnb in Zion, Illinois, begin by researching local regulations as Zion requires short-term rental operators to obtain a business license from the City Clerk's office and comply with zoning ordinances that typically allow rentals in residential areas with restrictions on occupancy limits and parking requirements. Contact Zion City Hall at 2828 Sheridan Road to verify current permit requirements and fees, which generally range from $50-200 annually, and ensure your property meets fire safety codes and building inspections. Find a suitable property by searching residential areas near Illinois Beach State Park or downtown Zion, considering proximity to attractions like Six Flags Great America (30 minutes south) and Lake Michigan beaches, with typical property costs ranging $80,000-250,000 for single-family homes. Furnish the space with essential amenities including Wi-Fi, cable TV, full kitchen appliances, linens, towels, and basic toiletries, budgeting approximately $5,000-15,000 for complete furnishing depending on property size. List your property on Airbnb, VRBO, and Booking.com with professional photos highlighting nearby attractions like Waukegan Harbor and the lakefront location, setting competitive rates around $75-150 per night based on seasonal demand and local market analysis. Manage your listing by implementing a cleaning schedule between guests, maintaining responsive communication with visitors, providing local recommendations for restaurants like Egg Harbor Cafe in nearby Waukegan, and ensuring compliance with Zion's noise ordinances and occupancy limits while tracking income for tax purposes and maintaining proper insurance coverage.

To identify profitable short-term rental properties in Zion, Illinois, focus on properties within 2-3 miles of Illinois Beach State Park and Lake Michigan shoreline, as these areas attract the majority of tourists seeking beach access and outdoor recreation. Target 2-4 bedroom single-family homes or condos built after 1980 with modern amenities, full kitchens, parking, and outdoor spaces like decks or patios that capitalize on the lakefront appeal. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against comparable properties in nearby Waukegan and Beach Park, aiming for properties under $200,000 that can generate $100-150 per night during peak summer months (May-September). Research competition by analyzing existing STR listings within a 5-mile radius, noting occupancy rates typically range 60-75% annually with higher demand during summer festivals and beach season. Utilize tools like Rabbu and STR Helper for Zion-specific market data, monitor Lake County tourism statistics, and consider properties near Zion Nuclear Plant for corporate housing demand, while ensuring compliance with local zoning ordinances and STR regulations through the City of Zion planning department.

To obtain an Airbnb/STR permit in Zion, Illinois, you must first contact the Zion City Hall at 2828 Sheridan Road to inquire about their short-term rental ordinance and application process, as the city likely requires a business license and special use permit for STR operations. You'll need to submit an application form along with required documents including proof of property ownership or lease agreement, liability insurance certificate (typically $1 million minimum), floor plan of the rental unit, contact information for a local property manager if you're not local, and potentially a site plan. The application fee is estimated to be between $100-300 with possible annual renewal fees of $50-150. Required documents may also include a zoning compliance certificate, fire safety inspection, and neighbor notification forms. The approval timeline typically takes 30-60 days depending on the completeness of your application and any required inspections. Zion likely has specific requirements such as maximum occupancy limits, parking requirements (usually 1-2 spaces per unit), noise ordinances, and restrictions on the number of STR permits issued per neighborhood or zoning district. You may also need to register with the Illinois Department of Revenue for tax collection purposes and comply with any homeowners association rules if applicable.

Short-term rentals (STRs) in Zion, Illinois are generally legal but subject to local regulations and zoning restrictions. The city of Zion requires STR operators to obtain proper business licenses and comply with zoning ordinances, which typically limit short-term rentals to certain residential districts while prohibiting them in some areas near schools or in specific neighborhood zones. Property owners must register their rentals with the city, maintain proper insurance, and ensure compliance with health and safety codes including smoke detectors and occupancy limits. Recent changes around 2022-2023 have included stricter enforcement of existing regulations and enhanced registration requirements, with the city implementing more robust monitoring systems for compliance. Zoning restrictions generally prohibit STRs in multi-family residential areas and certain historic districts, while single-family homes in appropriate zones can operate as short-term rentals with proper permits and adherence to noise ordinances and parking requirements.

For Airbnb investment in Zion, Illinois, the most promising areas include the lakefront district near Illinois Beach State Park, which attracts tourists year-round for beach activities, hiking, and camping, particularly during summer months when Chicago residents seek nearby getaways. The downtown historic district offers potential due to its proximity to the Zion-Benton Township High School and various community events, drawing visiting families and sports teams. Areas near the Metra train station provide excellent opportunities for business travelers and tourists wanting easy access to Chicago, approximately 50 miles south, making it attractive for extended stays and weekend visitors. The residential neighborhoods closest to Shiloh Park and the lakefront command premium rates due to their scenic views and recreational amenities, while properties near major thoroughfares like Sheridan Road benefit from visibility and accessibility for guests exploring the North Shore region, attending events at nearby Six Flags Great America in Gurnee, or visiting family at Great Lakes Naval Station.

Airbnb properties in Zion, Illinois are subject to the Illinois Hotel Operators' Occupation Tax at a rate of 6% on gross rental receipts, which is collected by the state and remitted monthly by hosts earning over $2,500 annually. Lake County imposes an additional lodging tax of approximately 3% on short-term rentals, bringing the total occupancy tax burden to around 9%. The City of Zion may impose a local hotel/motel tax of up to 5% under Illinois Municipal Code, though the specific rate varies by local ordinance. Airbnb typically collects and remits state and applicable local taxes automatically for hosts, with remittance occurring monthly to the Illinois Department of Revenue and quarterly to Lake County. Hosts must register with the Illinois Department of Revenue if their annual rental income exceeds $2,500, and properties rented for 30 days or longer are generally exempt from occupancy taxes. Additional exemptions may apply for rentals to permanent residents or government employees on official business, and hosts should verify current local tax rates with Zion city officials as municipal lodging tax rates can change through local ordinances.

The total cost to start an Airbnb in Zion, Illinois would be approximately $185,000-$220,000. Property purchase costs around $150,000-$180,000 based on median home prices in Lake County. Furnishing a 2-3 bedroom property requires $8,000-$12,000 for beds, sofas, dining sets, appliances, linens, and décor. Initial setup including professional photography, listing creation, and basic renovations costs $2,000-$3,500. Permits and fees including business license, short-term rental permit, and inspection fees total $500-$800. Insurance for short-term rental coverage adds $1,200-$1,800 annually. 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 including cleaning services, supplies, maintenance, property management software, and marketing total $3,000-$4,500. Additional considerations include potential HOA fees, property taxes, and a reserve fund for unexpected repairs and vacancy periods.

Airbnb properties in Zion, Illinois typically generate modest profitability with average nightly rates ranging from $85-120 for standard 2-3 bedroom homes, resulting in monthly revenues of $1,800-2,500 for properties with 60-70% occupancy rates. Operating expenses including mortgage payments ($1,200-1,600), utilities ($150-200), cleaning fees ($40-60 per turnover), property management (15-20% of revenue), insurance ($100-150), and maintenance ($200-300) typically consume 75-85% of gross revenue, leaving net profit margins of 15-25% or approximately $300-600 monthly. Success factors in this Lake County market include proximity to Illinois Beach State Park and Six Flags Great America (30 minutes south), competitive pricing against nearby Waukegan and North Chicago properties, and targeting weekend leisure travelers and extended-stay business guests from nearby Abbott Laboratories and Naval Station Great Lakes. Properties within walking distance of Zion's lakefront or featuring amenities like hot tubs and game rooms command premium rates of $130-160 nightly, while basic inland properties struggle with rates below $80, making location and differentiation critical for achieving positive cash flow in this secondary market that lacks the tourism density of Chicago or Wisconsin Dells.

Airbnb investments in Zion, Illinois typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, primarily due to the city's proximity to Lake Michigan beaches and Zion National Park attractions drawing seasonal tourists from Chicago metropolitan area. Properties near the lakefront or downtown area command higher nightly rates of $80-120, while inland properties average $60-90 per night during peak summer months (May-September). Initial profitability usually occurs within 18-24 months for well-positioned properties, with investors seeing break-even on cash invested by month 20-30 depending on occupancy rates which typically range from 45-65% annually. The market benefits from limited hotel inventory and growing demand from Chicago-area visitors seeking weekend getaways, though winter months see significant occupancy drops to 25-35%, requiring investors to factor seasonal cash flow variations into their projections.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Zion, Illinois and surrounding areas. Local real estate agents specializing in investment properties include Coldwell Banker Realty agents in Lake County who focus on vacation rental investments, RE/MAX agents with STR expertise in the North Shore region, and Berkshire Hathaway HomeServices KoenigRubloff Realty Group agents who work with investors in the greater Chicago area including Lake County. National services include Mashvisor for property analysis and market data, AirDNA for short-term rental analytics, Awning for turnkey Airbnb investments, Roofstock for rental property investments, and RedAwning for vacation rental market insights. Local property management companies that assist investors include Vacasa, which operates in the Chicago metro area, and several boutique Lake County property management firms that specialize in short-term rentals near Illinois Beach State Park and other Zion attractions. Investment-focused mortgage brokers and lenders in the region include First Midwest Bank and local credit unions that offer investment property financing for vacation rental purchases.