Minnesota Short-Term Rentals

[Corey Robert Leet]

Anyone have advice on short-term rentals in Minnesota? We are looking to expand into this industry but are somewhat concerned about what to estimate for occupancy, especially in the winter months. We have experience with SFH and College Rentals, but are interested in the short-term rental market as well. We are specifically looking at the North Shore area (Duluth, Two Harbors, etc.), but are open to other areas that make sense. We are also trying to think of other expenses we need to plan for (maintenance, utilities, etc.) and don't want to miss anything. Any input is greatly appreciated.

      Thanks,

           Corey Leet

[Michael Schraepfer]

Hey Cory!

I might be able to help. I own one in Duluth and our company manages a few of them in the area. Vacation rentals are pretty lucrative up here in the summer - which is really mid-June through October fall colors. There bleak in the winter, but you can get them rented to cover costs.

The big issue is licensing. Duluth has a specific short term rental license. It takes several months to get, and will cost 3-4K to get through it. Most importantly the city of Duluth limits how many are permits are allowed and currently there all taken. They require a commercial fire department inspection, health department inspection, property survey, change in zoning application, and an appearance at the planning Commission and a city council hearing. It takes 4 months with no hiccups just to get the license if there is one available. Lastly, it doesn’t transfer with the property if later you decide to sell - so you can’t “sell” a vacation rental.

Most of the surrounding communities up here don’t license these things, but up the north shore it’s starting. Lakewood township which covers the majority of the shore between Duluth city limits and Two Harbors has a short term permit now too. Also further up around Grand Marais, Tofte, Lutsen area there are new regulations, but I’m not as well versed in their specific process / requirements.

Hope that helps!