The rise of platforms like Airbnb and Vrbo has turned short-term rentals into a booming real estate opportunity. Whether you’re a homeowner looking to make extra income or an investor exploring the Minnesota real estate market, one key question often comes up: Is short-term renting allowed in Minnesota?
Understanding Short-Term Rental Rules in Minnesota
Short-term rentals (STRs) — typically defined as rentals of less than 30 days — are legal in Minnesota, but their regulations vary significantly by city, township, and county. Some areas welcome vacation rentals, while others place restrictions or outright bans on them.
Popular Cities for Short-Term Rentals in Minnesota
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Minneapolis: Short-term rentals are allowed, but hosts must register and obtain the proper license (either as an owner-occupied or non-owner-occupied property). The city has clear zoning and safety requirements.
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St. Paul: Hosts must obtain a rental license and meet safety inspection standards. There are also occupancy limits and zoning regulations.
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Duluth & North Shore Areas: These vacation hotspots have seen rising restrictions. Some neighborhoods have limited new STR permits to protect housing supply for residents.
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Brainerd Lakes Area & Central MN: Generally STR-friendly, though some townships require conditional use permits.
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Rochester: Home to Mayo Clinic tourism, STRs are permitted but closely regulated with licensing and zoning laws.
What You Need to Know Before Starting a Short-Term Rental in Minnesota
If you’re considering buying an investment property or converting your home into a vacation rental, here’s what you need to research:
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Local Zoning Ordinances – Check if the property is in a zone that allows STRs.
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Licensing Requirements – Most cities require a short-term rental license.
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HOA or Condo Association Rules – Many homeowner associations restrict or prohibit STRs.
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Insurance Coverage – Standard homeowner’s insurance may not cover STR activity. Consider specialized short-term rental insurance.
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Tax Obligations – In Minnesota, STR hosts may be required to collect sales tax, lodging tax, and report earnings for income tax purposes.
Investing in Minnesota Real Estate with Short-Term Rental Potential
Some of the best areas to invest in vacation rentals in Minnesota include:
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Lake Minnetonka – High demand in summer, premium rates
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Stillwater – Quaint riverfront town with great tourism appeal
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Lutsen/Tofte/Grand Marais – North Shore gems for year-round travelers
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Detroit Lakes & Alexandria – Popular for cabin rentals and lake life
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Twin Cities Suburbs – Ideal for hosting business or event travelers
Whether you’re eyeing a lake cabin, downtown condo, or suburban home, working with a local real estate expert who understands short-term rental laws and investment potential is key.
Final Thoughts
Short-term rentals can offer excellent income opportunities for Minnesota property owners — but only if you stay compliant with local laws and zoning ordinances. Before you buy or list, make sure to do your homework or talk with a local real estate expert who can guide you through the process.
Looking to explore Minnesota real estate with short-term rental potential? Let’s find the right opportunity for you.
– Jordan Eatherton, Apex Realty Team