Airbnb St. Paul, Minnesota: Market Data, Laws & Investor Guide

Are you looking to start a profitable Airbnb business in a thriving Midwestern city? Look no further than St. Paul, Minnesota. This charming capital city, nestled along the banks of the Mississippi River, offers a perfect blend of history, culture, and natural beauty that attracts visitors from around the world.

In 2024, St. Paul is poised to be one of the hottest destinations for short-term rentals. The city's tourism industry is booming, with visitor spending reaching a record-breaking $1.2 billion in 2023. This surge in tourism has created a high demand for unique, authentic accommodations that offer a true taste of the local experience – something that Airbnb excels at providing.

St. Paul's diverse array of attractions and events make it a year-round destination for travelers. From the stunning Cathedral of Saint Paul to the interactive Science Museum of Minnesota, there's something for everyone. The city also hosts a packed calendar of festivals and events, such as the Minnesota State Fair, which drew over 2 million visitors in 2023.

But it's not just the tourist appeal that makes St. Paul a smart choice for Airbnb hosts. The city's strong economy and growing population mean a steady stream of business travelers and long-term guests. St. Paul's unemployment rate is consistently lower than the national average, and major employers like 3M, Ecolab, and Securian Financial Group call the city home.

Perhaps most importantly, St. Paul offers a favorable regulatory environment for short-term rentals. While some cities have cracked down on Airbnb, St. Paul has embraced the sharing economy. The city's streamlined permitting process and reasonable regulations make it easy for hosts to get started and operate legally.

With its unbeatable combination of tourist appeal, economic strength, and Airbnb-friendly policies, St. Paul is the perfect place to launch your short-term rental business in 2024. Keep reading to discover insider tips and strategies for success in this exciting market.

St. Paul Short-Term Rental Market Analysis

St. Paul's short-term rental market has shown promising growth in recent years. According to data from Airbtics, the city's Airbnb market has the following key metrics as of May 2024:

• Airbnb Occupancy Rate: 63%
• Average Daily Rate: $118
• Annual Revenue: $25,658
• Total Listings: 873

Comparing this data to the previous year, St. Paul's Airbnb market has experienced steady growth:

1. Occupancy Rate in 2023: 61% (up 2 percentage points from 2024)
2. Average Daily Rate in 2023: $115 (up $3 from 2024)

St. Paul's tourism industry has also seen significant growth in the past two years. Visitor spending reached a record-breaking $1.2 billion in 2023, showcasing the city's appeal as a destination. The leisure and hospitality sector employed 254,000 people as of December 2023, a 10% increase from the previous year.

Several annual events and festivals in St. Paul contribute to the city's strong tourism industry and provide opportunities for Airbnb hosts to capitalize on increased demand:

1. Saint Paul Winter Carnival (January/February)
2. Twin Cities Jazz Festival (June)
3. Irish Fair of Minnesota (August)
4. Minnesota State Fair (August/September)
5. European Christmas Market (November/December)

According to host forums and local websites, the average booking duration for Airbnb stays in St. Paul ranges from 2-4 nights, with longer stays common during major events like the Minnesota State Fair. The mid-term rental market (monthly rentals) in St. Paul is also growing, with some hosts reporting an increase in bookings for stays of 30 days or more.

In summary, St. Paul's short-term rental market is thriving, with steady growth in occupancy rates, average daily rates, and overall tourism. The city's diverse array of annual events and festivals provides ample opportunities for Airbnb hosts to attract guests and maximize their rental income.

Best Neighborhoods in St. Paul for an Airbnb Business

When starting an Airbnb business in St. Paul, selecting the right neighborhood is crucial for success. Consider factors such as proximity to popular attractions, up-and-coming areas, and tourist hotspots. Here are the top 5 neighborhoods in St. Paul for launching your Airbnb venture, along with key data points to help guide your decision.

1. Downtown St. Paul

As the heart of the city, Downtown St. Paul offers easy access to major attractions like the Science Museum of Minnesota, Xcel Energy Center, and the Minnesota State Capitol. This prime location makes it an ideal spot for an Airbnb.

1. Average Occupancy Rate: 68%
2. Average Daily Rate: $135
3. Estimated Annual Revenue: $33,500
4. Median Home Price: $315,000 (Zillow, July 2024)

For the best return on investment in Downtown St. Paul, consider investing in a 2-bedroom property, as they tend to have the highest occupancy rates and revenue potential.

2. Cathedral Hill

Known for its historic charm and stunning architecture, Cathedral Hill is a popular choice among tourists. The neighborhood is home to the iconic Cathedral of Saint Paul and offers a variety of local shops and restaurants.

1. Average Occupancy Rate: 65%
2. Average Daily Rate: $120
3. Estimated Annual Revenue: $28,470
4. Median Home Price: $450,000 (Zillow, July 2024)

In Cathedral Hill, 3-bedroom properties provide the best balance between investment cost and rental income potential.

3. West 7th

West 7th is an up-and-coming neighborhood that has seen significant growth in recent years. Its proximity to the Mississippi River and popular attractions like the Science Museum of Minnesota makes it an attractive option for Airbnb hosts.

1. Average Occupancy Rate: 62%
2. Average Daily Rate: $110
3. Estimated Annual Revenue: $24,900
4. Median Home Price: $280,000 (Zillow, July 2024)

Single-family homes with 3-4 bedrooms offer the best return on investment in the West 7th neighborhood.

4. Summit Hill

Summit Hill boasts beautiful historic homes and a prime location near Grand Avenue, a popular destination for shopping and dining. The neighborhood's charm and walkability make it a favorite among visitors.

1. Average Occupancy Rate: 60%
2. Average Daily Rate: $130
3. Estimated Annual Revenue: $28,470
4. Median Home Price: $550,000 (Zillow, July 2024)

In Summit Hill, 2-3 bedroom properties strike the right balance between investment cost and rental income potential.

5. Lowertown

Lowertown is a trendy, artsy neighborhood known for its vibrant farmer's market, unique restaurants, and proximity to CHS Field, home of the St. Paul Saints baseball team. This area appeals to younger travelers seeking a local experience.

1. Average Occupancy Rate: 58%
2. Average Daily Rate: $100
3. Estimated Annual Revenue: $21,170
4. Median Home Price: $300,000 (Zillow, July 2024)

Studio and 1-bedroom apartments are the most profitable investment options in Lowertown, as they cater to the neighborhood's younger, budget-conscious visitors.

When selecting a neighborhood for your Airbnb business in St. Paul, consider your target audience, investment budget, and desired return on investment. By analyzing key data points and understanding the unique characteristics of each area, you can make an informed decision that sets your Airbnb venture up for success.

Maximizing Your Revenue Through In-Demand Amenities and Properties in St. Paul

To set competitive prices for your Airbnb in St. Paul, consider factors like location, property type, amenities, seasonality, and market demand. Analyze similar listings in your area to gauge the average nightly rates and adjust your pricing accordingly. Keep in mind that pricing too high may deter potential guests, while pricing too low can leave money on the table.

Based on an analysis of top-performing Airbnb listings in St. Paul, the following amenities and features are most sought-after by guests:

1. Self check-in with keypad or lockbox for contactless entry
2. Fully-equipped kitchen with modern appliances and cooking essentials
3. Private outdoor space like a balcony, patio, or backyard
4. High-speed internet and dedicated workspace for remote workers
5. In-unit laundry facilities for guest convenience
6. Pet-friendly accommodations to attract a wider range of travelers
7. Unique decor or architectural features that showcase local character
8. Proximity to popular attractions, restaurants, and public transit

Incorporating these amenities into your Airbnb can help you stand out from the competition and justify higher nightly rates. For example, listings with self check-in in St. Paul earn an average of 10% more per night compared to those without this feature.

In terms of property types, the most popular Airbnb rentals in St. Paul are:

Single-family homes

• 2-bedroom: Median price $280,000, potential monthly revenue $2,800
• 3-bedroom: Median price $350,000, potential monthly revenue $3,500
• 4-bedroom: Median price $450,000, potential monthly revenue $4,500

Apartments and condos

• Studio: Median price $150,000, potential monthly revenue $1,500
• 1-bedroom: Median price $200,000, potential monthly revenue $2,000
• 2-bedroom: Median price $250,000, potential monthly revenue $2,500

Townhouses

• 2-bedroom: Median price $300,000, potential monthly revenue $3,000
• 3-bedroom: Median price $400,000, potential monthly revenue $4,000

These figures are based on 2022-2023 data from Zillow and AirDNA. Keep in mind that actual revenue may vary depending on factors like occupancy rate, seasonality, and operating expenses.

To maximize your earnings as an Airbnb host in St. Paul, consider investing in a property type and size that aligns with market demand. Single-family homes and apartments with 2-3 bedrooms tend to perform best, offering a balance of affordability and revenue potential. Equip your rental with the amenities guests crave, and price competitively based on similar listings in your neighborhood to attract bookings and optimize your return on investment.

Understanding St. Paul Short-Term Rental Regulations

Starting a short-term rental business in St. Paul, Minnesota requires obtaining the necessary licenses and permits while adhering to local regulations. The City of St. Paul allows STRs throughout the city, with rules in place to ensure compliance with zoning, building codes, and safety standards.

To operate an STR in St. Paul, hosts must obtain a Short Term Rental Host license, which must be renewed annually. The application process involves submitting detailed information about the property, including contact details, insurance information, and compliance with zoning and safety regulations. Required documents include the Short Term Rental License Application, Current Fire Certificate of Occupancy, and Proof of Insurance.

STRs in St. Paul are subject to sales tax, with the State of Minnesota imposing a sales tax on lodging stays of less than 30 days. Hosts must be aware of their tax obligations and ensure compliance with state and local tax laws.

St. Paul has established comprehensive regulations for STRs, including registration and compliance with all applicable laws, licensing requirements for hosts and platforms, usage restrictions, and advertising compliance. The city has demonstrated a commitment to enforcing its STR regulations, with an STR portal and a dedicated enforcement team in place.

To start an STR business in St. Paul, hosts should research local regulations, obtain a Short Term Rental Host License, ensure property compliance, secure insurance coverage, and maintain ongoing compliance with all requirements.

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

Keys to Success as a St. Paul Airbnb Host

Running a successful Airbnb business in St. Paul requires a combination of strategic planning, attention to detail, and a deep understanding of the local market. By focusing on the right amenities, design themes, and customer attraction strategies, hosts can maximize their occupancy rates and revenue potential. Here are some key tips for success as a St. Paul Airbnb host.

Popular Amenities and Design Themes in St. Paul

To attract guests and stand out from the competition, consider incorporating the following amenities and design themes into your St. Paul Airbnb:

• Cozy, hygge-inspired decor with plush textiles and warm lighting
• Locally-sourced artwork and decor that showcases St. Paul's unique character
• Outdoor amenities like a fire pit, grill, or patio seating for enjoying Minnesota's beautiful summers
• Smart home technology like keyless entry, smart thermostats, and voice-controlled devices
• Kid-friendly amenities like high chairs, pack-n-plays, and age-appropriate toys for family travelers

How to Attract St. Paul Customers

To attract guests to your St. Paul Airbnb, focus on the following strategies:

• Highlight your property's proximity to popular attractions, restaurants, and events in your listing description and photos
• Offer special packages or discounts during major events like the Minnesota State Fair or Saint Paul Winter Carnival
• Partner with local businesses to offer exclusive perks or discounts for your guests, such as free tickets to a nearby museum or a discount at a popular restaurant
• Leverage social media and targeted advertising to reach potential guests who are interested in visiting St. Paul
• Encourage satisfied guests to leave positive reviews and recommend your property to friends and family

Potential Challenges and Guidelines for Success

While operating an Airbnb in St. Paul can be a lucrative venture, hosts should be aware of potential challenges and risks. According to experienced hosts on forums like BiggerPockets and the Airbnb Community Center, some common issues include:

• Navigating local regulations and ensuring compliance with licensing and permit requirements
• Dealing with unexpected maintenance issues or guest damages to the property
• Managing guest expectations and handling negative reviews or complaints
• Balancing the demands of being a host with personal and professional obligations

To mitigate these challenges and run a successful Airbnb in St. Paul, consider the following guidelines:

• Thoroughly research and comply with all local regulations and licensing requirements
• Invest in regular maintenance and upkeep of your property to prevent costly repairs
• Set clear house rules and expectations for guests to minimize the risk of damages or complaints
• Automate as much of the hosting process as possible, such as check-in, communication, and cleaning, to save time and reduce stress
• Build a strong network of local service providers, such as cleaners, handymen, and property managers, to help manage your Airbnb efficiently

By focusing on the right amenities, customer attraction strategies, and operational best practices, Airbnb hosts in St. Paul can build a thriving and profitable business in this dynamic Midwestern city.

Using BNBCalc to Find Profitable Properties in St. Paul, Minnesota

Investing in a short-term rental property in St. Paul, Minnesota can be a lucrative venture, but it's essential to do your due diligence and find the right property to maximize your returns. BNBCalc is a powerful tool that can help aspiring business owners navigate the process of starting a short-term rental by providing data-driven insights and analysis. Here's how you can use BNBCalc to find profitable properties in St. Paul.

1. Analyze Properties Using BNBCalc

BNBCalc allows you to input property details, such as address, purchase price, and estimated expenses, to generate a comprehensive financial analysis. The tool provides key metrics like projected revenue, occupancy rate, cash flow, and return on investment, helping you make informed decisions about potential investments.

2. Benchmark Comparable Rentals

Using BNBCalc's market data, you can compare your property to other nearby rentals in St. Paul. Analyze their nightly rates, occupancy rates, and amenities to ensure your property is competitive and priced appropriately. By understanding the local market, you can optimize your listing to fetch top dollar and maximize your revenue potential.

3. Determine The Right Price and Property Size

BNBCalc's property search tool allows you to filter listings by the number of bedrooms, bathrooms, and purchase price to find properties that align with your investment goals. The tool's financial projections can help you determine the optimal property size and price point to maximize your returns in the St. Paul market.

4. Make an Offer

Once you've found a property that meets your investment criteria, use BNBCalc's financial analysis to determine a fair purchase price based on the projected returns. To streamline the buying process, consider getting prequalified with BNBCalc's partnered STR lender, such as Brian Bockholdt at Alliant Credit Union, who offers competitive rates for short-term rental investments.

5. Use Our Tax Calculator

BNBCalc's tax calculator can help you estimate potential tax deductions for your St. Paul short-term rental, including bonus depreciation. By understanding the tax implications of your investment, you can optimize your financial strategy and maximize your overall returns.

6. Come Up With a Buy Box

When creating a buy box for your St. Paul short-term rental investment, focus on properties that offer:

• Prime location near popular attractions, restaurants, and events
• Attractive cap rates and cash-on-cash returns
• Potential for value-add improvements or renovations
• Unique features or amenities that set the property apart from competitors
• Alignment with local regulations and zoning requirements

By setting clear criteria for your investment and using BNBCalc's data-driven insights, you can identify properties that offer the best potential for long-term profitability and success in the St. Paul short-term rental market.

Ready to start your Airbnb journey in St. Paul? 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 St. Paul 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.