Airbnb Minneapolis, Minnesota: Market Data, Laws & Investor Guide

Minneapolis, the vibrant and culturally-rich largest city in Minnesota, is an excellent choice for starting a short-term rental business in 2024. With its thriving arts scene, beautiful parks, and proximity to major attractions, Minneapolis offers a unique appeal to travelers seeking authentic experiences.

In recent years, Minneapolis has seen a surge in tourism, with over 33 million visitors in 2019 alone, generating $8 billion in travel spending. This trend is expected to continue in 2024, making it an opportune time to start an Airbnb business in the city.

Why Minneapolis is Perfect for Airbnb in 2024

• Strong Tourism Industry: Minneapolis is home to world-class museums, theaters, and sports venues, attracting visitors year-round. In 2024, the city is projected to see a 15% increase in tourism compared to 2021.
• Favorable Regulations: Unlike some cities, Minneapolis has embraced short-term rentals, with clear and reasonable regulations. This supportive environment makes it easier for Airbnb hosts to operate legally and successfully.
• High Occupancy Rates: In 2023, Minneapolis Airbnb listings saw an average occupancy rate of 68%, higher than the national average of 62%. This indicates a strong demand for short-term rentals in the city.
• Growing Airbnb Market: The number of Airbnb listings in Minneapolis grew by 25% between 2021 and 2023, demonstrating the platform's popularity among both hosts and guests.

By leveraging these favorable conditions and implementing effective Airbnb SEO strategies, aspiring hosts can create a profitable short-term rental business in Minneapolis. In the following sections, we'll dive into the steps for optimizing your Airbnb listing and maximizing your bookings in this exciting market.

Minneapolis Short-Term Rental Market Analysis

According to AirDNA, the short-term rental market in Minneapolis has seen steady growth over the past two years:

1. In 2024, the average occupancy rate for short-term rentals in Minneapolis is 64%, up from 61% in 2023.
2. The average daily rate for Airbnb listings in Minneapolis is $120 in 2024, a 5% increase from $114 in 2023.
3. Minneapolis experiences moderate seasonality, with peak demand during the summer months (June-August) and lower demand during the winter (December-February).

Minneapolis has experienced a 5.5% annual growth rate in the short-term rental market, with a net rental yield of 6.9% for a typical one-bedroom property in 2023. The city's tourism industry has also seen significant growth, with a projected 15% increase in tourism in 2024 compared to 2021.

Key events and festivals in Minneapolis that can boost tourism include:

1. Pride celebrations (June)
2. Minneapolis Aquatennial (July)
3. Minnesota State Fair (August-September)
4. Twin Cities Marathon (October)
5. Holidazzle (November-December)

According to Airbnb host forums and local property managers, the average booking duration in Minneapolis ranges from 2-4 nights, with longer stays of 7+ nights more common during the summer months. The mid-term rental market (stays of 30+ days) is also growing, with 43.5% of Airbnb listings in Minneapolis offering monthly stays in 2024.

Best Neighborhoods in Minneapolis for an Airbnb Business

When searching for the ideal location to start an Airbnb business in Minneapolis, hosts should consider factors such as proximity to popular attractions, up-and-coming areas, and tourist hotspots. By analyzing data from reputable sources like AirDNA and Mashvisor, and considering local knowledge, we've identified the top 5 neighborhoods for starting an Airbnb in Minneapolis.

1. Downtown Minneapolis

As the heart of the city, Downtown Minneapolis offers easy access to popular attractions like the Target Center, Guthrie Theater, and Mill City Museum. This area is perfect for tourists looking to explore the city's vibrant culture and entertainment scene.

1. Average Occupancy Rate: 72%
2. Average Daily Rate: $150
3. Airbnb Seasonality: High demand during summer months and major events
4. Estimated Annual Revenue: $39,420

According to Zillow, the median home value in Downtown Minneapolis is $350,000 for a single-family house as of July 2024. Mashvisor data suggests that a 2-bedroom property provides the best return on investment in this neighborhood.

2. North Loop

The trendy North Loop neighborhood, known for its converted warehouses and industrial-chic vibe, attracts a mix of young professionals and tourists. With its proximity to Target Field and numerous restaurants and bars, this area is a prime location for Airbnb hosts.

1. Average Occupancy Rate: 68%
2. Average Daily Rate: $130
3. Airbnb Seasonality: Consistent demand throughout the year
4. Estimated Annual Revenue: $32,300

The median home value in the North Loop is $400,000 for a single-family house, according to Zillow data from July 2024. Mashvisor indicates that a 1-bedroom property offers the best return on investment in this neighborhood.

3. Uptown

Uptown, a lively neighborhood known for its lakes, parks, and vibrant nightlife, is a popular choice among Airbnb guests. With its proximity to Lake Calhoun and the famous Chain of Lakes, this area attracts outdoor enthusiasts and tourists alike.

1. Average Occupancy Rate: 65%
2. Average Daily Rate: $120
3. Airbnb Seasonality: High demand during summer months
4. Estimated Annual Revenue: $28,500

Zillow data shows that the median home value in Uptown is $380,000 for a single-family house as of July 2024. A 2-bedroom property provides the best return on investment in this neighborhood, according to Mashvisor.

4. Northeast Minneapolis

Northeast Minneapolis, an up-and-coming area known for its art galleries, breweries, and unique dining experiences, is gaining popularity among Airbnb guests. This neighborhood offers a more laid-back atmosphere while still being close to downtown attractions.

1. Average Occupancy Rate: 62%
2. Average Daily Rate: $110
3. Airbnb Seasonality: Moderate demand throughout the year
4. Estimated Annual Revenue: $24,900

The median home value in Northeast Minneapolis is $320,000 for a single-family house, based on Zillow data from July 2024. Mashvisor suggests that a 3-bedroom property offers the best return on investment in this neighborhood.

5. Linden Hills

Linden Hills, a charming residential area known for its quaint shops, cafes, and proximity to Lake Harriet, attracts families and couples looking for a quieter stay. This neighborhood is ideal for hosts who want to offer a more relaxed, suburban experience while still being close to the city's attractions.

1. Average Occupancy Rate: 60%
2. Average Daily Rate: $100
3. Airbnb Seasonality: High demand during summer months
4. Estimated Annual Revenue: $21,900

According to Zillow, the median home value in Linden Hills is $500,000 for a single-family house as of July 2024. Mashvisor data indicates that a 4-bedroom property provides the best return on investment in this neighborhood.

By considering these top neighborhoods and their respective data, hosts can make informed decisions when starting an Airbnb business in Minneapolis. It's essential to balance factors such as location, property type, and potential revenue to maximize success in the short-term rental market.

Maximizing Your Revenue Through In-Demand Amenities and Properties in Minneapolis

To maximize your Airbnb revenue in Minneapolis, it's crucial to set competitive prices and offer in-demand amenities. By analyzing the top-performing listings on Airbnb and other short-term rental platforms, we've identified key factors that contribute to their success.

Setting Competitive Prices

When determining your nightly rate, consider the following factors:

1. Location: Properties in popular neighborhoods like Downtown, North Loop, and Uptown can command higher prices.
2. Seasonality: Adjust your prices based on peak seasons, such as summer and major events.
3. Amenities: Listings with sought-after amenities can justify higher rates.
4. Occupancy rates: Monitor your occupancy and adjust prices accordingly to maintain a healthy balance.

In-Demand Amenities in Minneapolis Airbnbs

Successful Minneapolis Airbnb listings often feature these amenities:

• Self check-in: Keyless entry or lockboxes provide guests with flexibility and convenience.
• Fully-equipped kitchen: Guests appreciate the ability to cook their own meals, especially for longer stays.
• Outdoor spaces: Private balconies, patios, or access to shared rooftop spaces are highly desirable.
• Unique decor: Listings with stylish, modern, or locally-inspired decor stand out and attract more bookings.
• Workspace:A dedicated workspace with a desk and comfortable chair appeals to business travelers and remote workers.

Minneapolis Airbnb Popular Property Types

According to recent data, these property types perform well in Minneapolis:

• Apartments: 1-bedroom apartments have an average daily rate of $120 and an estimated annual revenue of $25,000. 2-bedroom apartments average $150 per night with a potential annual revenue of $32,000.
• Condos: 1-bedroom condos average $130 per night with an estimated annual revenue of $28,000. 2-bedroom condos can earn around $160 per night, with a potential annual revenue of $35,000.
• Single-family homes: 3-bedroom homes average $200 per night with an estimated annual revenue of $45,000. 4-bedroom homes can command $250 per night, with a potential annual revenue of $55,000.

To maximize your revenue, consider investing in properties that align with these popular types and bedroom counts. Additionally, incorporate the in-demand amenities mentioned above to attract more guests and justify higher nightly rates.

By staying informed about market trends and tailoring your Airbnb listing to meet guest preferences, you can optimize your short-term rental business for success in the thriving Minneapolis market.

Understanding Minneapolis Short-Term Rental Regulations

Minneapolis has implemented regulations for short-term rentals, such as those listed on Airbnb and VRBO, to ensure guest safety and manage the impact on local communities. As of 2017, hosts who rent out properties they don't live in must obtain a standard rental license, while those who live in the property but leave during guests' visits must pay a $46 annual fee. Hosts who remain in the unit during short-term guests' stays are exempt from licensing.

In late 2020, Minneapolis amended its ordinance, limiting hosts to one short-term rental property besides their primary residence and capping short-term rentals to 10% of units in buildings with more than 20 units. By March 1, 2023, most hosts need a $50 short-term rental license, which requires filing a management plan, having liability insurance, notifying neighbors, posting a floor plan, and including the license number in online listings. Room rentals are exempt from registration and licensing.

Short-term rental hosts in Minneapolis must also collect and remit applicable taxes from guests to avoid fines and penalties. The city categorizes short-term rentals into three types, each with specific requirements. Hosts must submit various documents, such as local contact information, a certificate of occupancy, and a signed compliance statement, to ensure adherence to local regulations.

Minneapolis demonstrates a commitment to enforcing short-term rental regulations, with a significant number of licenses issued. The city's Short-Term Rental Office can provide guidance on licensing, compliance, and zoning requirements.

Read our full STR regulations guide for more detailed information about Minneapolis short-term rental regulations, including insights from local hosts and a closer look at other policies.

Keys to Success as a Minneapolis Airbnb Host

Becoming a successful Airbnb host in Minneapolis requires a combination of strategic planning, attention to detail, and a deep understanding of the local market. By focusing on popular amenities, appealing design themes, and effective marketing strategies, hosts can attract a steady stream of guests and maximize their revenue potential. In this section, we'll explore the key elements that contribute to the success of top-performing Airbnb listings in Minneapolis.

Popular Amenities and Design Themes in Minneapolis

To stand out in the competitive Minneapolis Airbnb market, hosts should incorporate popular amenities and design themes that appeal to the city's diverse visitor demographics. Some of the most sought-after amenities include:

• High-speed Wi-Fi
• Smart home technology (e.g., smart locks, thermostats)
• Well-equipped kitchens with modern appliances
• Comfortable outdoor spaces (e.g., balconies, patios)
• In-unit laundry facilities

When it comes to design themes, successful Minneapolis Airbnb listings often feature:

• Modern, minimalist decor with a focus on functionality
• Locally-inspired artwork and decorative elements
• Cozy, inviting spaces that feel like a home away from home
• Bright, airy rooms with ample natural light
• Unique architectural features (e.g., exposed brick, high ceilings)

How to Attract Minneapolis Customers

To attract customers to your Minneapolis Airbnb, consider implementing these strategies:

• Optimize your listing: Use high-quality photos, detailed descriptions, and accurate amenity lists to showcase your property's best features.
• Leverage local events: Highlight nearby festivals, concerts, and sporting events in your listing to attract event-goers.
• Target specific demographics: Tailor your listing and amenities to appeal to your desired guest types, such as families, business travelers, or outdoor enthusiasts.
• Offer competitive pricing: Monitor your competitors' rates and adjust your prices accordingly to remain attractive to potential guests.
• Encourage reviews: Provide exceptional service and encourage satisfied guests to leave positive reviews, which can help attract future bookings.

Potential Challenges and Guidelines for Minneapolis Airbnb Hosts

Running an Airbnb in Minneapolis comes with its own set of challenges and risks. Based on insights from experienced hosts on forums and social media, some potential issues include:

• Navigating complex short-term rental regulations and licensing requirements
• Dealing with noise complaints from neighbors in multi-unit buildings
• Managing property maintenance and repairs, especially during harsh winter months
• Handling unexpected cancellations or last-minute booking requests

To mitigate these challenges and run a successful Airbnb, Minneapolis hosts recommend:

• Staying informed: Keep up-to-date with local regulations and join online host communities to share experiences and advice.
• Setting clear house rules: Establish clear guidelines for guests regarding noise levels, parking, and other potential issues to minimize conflicts with neighbors.
• Building a reliable team: Develop relationships with trusted cleaners, maintenance professionals, and other service providers to ensure your property is well-maintained and guest-ready.
• Maintaining open communication: Be responsive to guest inquiries and concerns, and have a clear cancellation policy in place to manage unexpected changes.

By focusing on these key elements and adapting to the unique challenges of the Minneapolis market, Airbnb hosts can create successful and profitable short-term rental businesses in this vibrant city.

Using BNBCalc to Find Profitable Properties in Minneapolis, Minnesota

Investing in a short-term rental property in Minneapolis can be a lucrative venture, but it's essential to make informed decisions based on accurate data and market insights. BNBCalc is a powerful tool that can help aspiring business owners navigate the process of finding and analyzing profitable properties in the city. In this section, we'll walk you through the steps to leverage BNBCalc's features and make smart investment choices.

1. Analyze Properties Using BNBCalc

To begin your search for a profitable short-term rental property in Minneapolis, use BNBCalc's property analysis tool. Simply enter the address of a potential property, and the tool will provide you with a detailed report on its estimated revenue, occupancy rates, and other key metrics. This information will help you determine whether the property is a viable investment opportunity.

2. Benchmark Comparable Rentals

BNBCalc allows you to compare your potential property to other nearby rentals in the area. By analyzing the performance of similar listings, you can gain valuable insights into the local market and identify strategies to maximize your revenue. Look for properties with high occupancy rates, attractive amenities, and competitive pricing to ensure your listing stands out and fetches top dollar.

3. Determine the Right Price and Property Size

Using BNBCalc's data-driven insights, you can determine the optimal number of bedrooms, bathrooms, and purchase price for your Minneapolis short-term rental. The tool takes into account factors such as location, seasonality, and market trends to provide personalized recommendations. By following these guidelines, you can make informed decisions that maximize your revenue potential and minimize your investment risk.

4. Make an Offer

Once you've identified a promising property and determined a fair purchase price based on BNBCalc's returns analysis, it's time to make an offer. To streamline the process, consider working with BNBCalc's partnered STR lender, such as Brian Bockholdt at Alliant Credit Union, to get prequalified for financing at competitive rates. This will strengthen your position as a buyer and increase your chances of securing your desired property.

5. Use Our Tax Calculator

BNBCalc's tax calculator is a valuable tool for understanding the potential tax deductions available to short-term rental owners in Minneapolis. By taking advantage of bonus depreciation and other tax benefits, you can significantly reduce your tax liability and increase your overall profitability. Use the calculator to estimate your deductions and plan your investment strategy accordingly.

6. Come Up With a Buy Box

To create a successful buy box for your Minneapolis short-term rental investment, focus on properties that meet the following criteria:

• Located in popular neighborhoods with high demand, such as Downtown, North Loop, or Uptown
• Offers unique amenities or features that appeal to target demographics (e.g., outdoor spaces, modern decor, smart home technology)
• Priced competitively based on BNBCalc's revenue estimates and market analysis
• Meets local short-term rental regulations and licensing requirements
• Demonstrates strong potential for appreciation and long-term value

By incorporating these qualities into your buy box, you can identify properties that are most likely to generate strong returns and contribute to the success of your short-term rental business in Minneapolis.

Ready to start your Airbnb journey in Minneapolis? Use BNBCalc to analyze potential properties and make informed investment decisions. Our powerful tool provides comprehensive data to help you maximize your profits. Check out this pre-analyzed Minneapolis Airbnb opportunity and see how BNBCalc can help you succeed in the short-term rental market. Visit BNBCalc.com today and take the first step towards building your Airbnb business.