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How Much Does It Cost to Start a Airbnb & Vacation Rental Business in Minnesota?

Starting a Airbnb & Vacation Rental Business in Minnesota typically costs between $10,340 and $84,600, with a median estimate of $28,200. Minnesota’s cost of living is 6% below the national average, which helps reduce operating expenses like commercial rent and labor. LLC formation in Minnesota costs $155 to file. Most airbnb & vacation rental business businesses take 1-3 months to launch.

Last updated: May 2026

Airbnb & Vacation Rental Business startup costs illustration — typical equipment and setup

How Much Does It Cost to Start a Airbnb & Vacation Rental Business in Minnesota?

Low

$10,340

Medium

$28,200

High

$84,600

National average: $11,000 – $90,000

Interactive Startup Cost Calculator

Startup Cost Calculator

Airbnb & Vacation Rental Business in Minnesota

Budget:
$14,100
$7,520
$470
$470
$1,880
$564
$1,410
$752

Options

Employees:

Startup Costs

$27,166

Monthly Costs

$3,760

First Year Total

$72,286

Full Cost Breakdown

Cost CategoryLowMediumHighNotes
Property Acquisition or Deposit$1,880$14,100$75,200Rental arbitrage (leasing a property, subletting as STR) requires only security deposit if landlord permits.
Furnishing & Interior Design$2,820$7,520$23,500Higher-end furnishings yield better reviews and nightly rates — invest in quality photography subjects.
STR Permits & Local Licenses$94$470$1,880Many cities heavily restrict STRs — verify local regulations BEFORE purchasing.
Professional Photography$188$470$1,410Professional photos meaningfully lift booking rates; Airbnb offers professional photography services for hosts.
STR Insurance$752$1,880$4,700Airbnb AirCover does NOT replace a dedicated STR insurance policy.
Smart Home Devices$188$564$1,880Smart locks eliminate physical key handoffs and enable remote access management.
Cleaning Service Setup$470$1,410$2,820The per-turnover cleaning cost is typically a low-to-mid two-figure dollar charge and is passed through to guests as a cleaning fee.
Channel Manager & PMS (optional)$282$752$1,880Essential if listing on Airbnb, VRBO, and Booking.com simultaneously.
Total Startup Cost$6,392$26,414$111,390Required costs only

Licenses & Permits in Minnesota

Licenses & Permits in Minnesota

General Business License

Minnesota does not have a statewide general business license. Businesses must register their entity with the Minnesota Secretary of State and register with the Minnesota Department of Revenue for sales and use tax and withholding tax purposes. Some Minnesota cities require local business licenses, though this varies by municipality. Minneapolis and Saint Paul have their own business licensing requirements. Many business types are regulated through specific licensing programs at the state level.

Industry-Specific Licenses

  • Food Handler License — Minnesota Department of Agriculture or Local Health Department
    Cost: Varies — contact agency • Renewal: Annual
  • Residential Building Contractor License — Minnesota Department of Labor and Industry
    Cost: Varies — contact agency • Renewal: Annual
  • Cosmetology Salon License — Minnesota Department of Labor and Industry — Board of Cosmetologist Examiners
    Cost: Varies — contact agency • Renewal: Annual
  • Real Estate Broker License — Minnesota Department of Commerce — Real Estate
    Cost: Varies — contact agency • Renewal: Annual
  • Child Care Center License — Minnesota Department of Human Services — Child Care Licensing
    Cost: Varies — contact agency • Renewal: Annual
  • On-Sale Intoxicating Liquor License — Minnesota Department of Public Safety — Alcohol and Gambling Enforcement or Local Authority
    Cost: Varies — contact agency • Renewal: Annual
  • Cannabis Retailer License — Minnesota Office of Cannabis Management
    Cost: Varies — contact agency • Renewal: Annual
  • Pesticide Business License — Minnesota Department of Agriculture
    Cost: Varies — contact agency • Renewal: Annual

Home-Based Business Rules

Minnesota municipalities regulate home-based businesses through local zoning ordinances. Minneapolis allows home occupations in all residential zones with restrictions on customer visits, signage, and deliveries. Saint Paul has similar home occupation rules. Minnesota's rural areas are generally very accommodating of home-based businesses. The state's Cottage Food Law specifically supports home-based food production and direct consumer sales.

Resources

Monthly Operating Costs

After launch, plan for these ongoing monthly expenses for your Airbnb & Vacation Rental Business:

Low

$1,500/mo

Medium

$4,000/mo

High

$12,000/mo

Revenue Potential

Annual Revenue Range

$20,000 – $200,000 (annual)

Profit Margins

20-45%

Break-Even Timeline

6-18 months

How Minnesota Compares to Neighboring States

Minnesota is one of the more affordable states for launching a Airbnb & Vacation Rental Business, with a cost-of-living index of 93.6 (national average is 100). Compared to neighboring Wisconsin ($27,300 median startup cost), Minnesota has higher costs for a Airbnb & Vacation Rental Business.

StateEst. CostLLC Fee
Minnesota (current)$28,200$155
Wisconsin$27,300$130
Iowa$24,900$50
South Dakota$24,900$150
North Dakota$24,600$135

Common Mistakes to Avoid

  1. 1

    Not verifying STR legality before purchasing property

  2. 2

    Underestimating furnishing costs for guest-ready presentation

  3. 3

    No dedicated STR insurance policy relying only on Airbnb AirCover

  4. 4

    Poor reviews from slow response times and communication

  5. 5

    Ignoring dynamic pricing tools (PriceLabs, Wheelhouse) that maximize revenue

Next Steps to Launch Your Airbnb & Vacation Rental Business

  1. 1

    Verify that Minnesota and your city/municipality permit short-term rentals — many cities require a short-term rental permit or restrict STRs by zone

  2. 2

    Apply for a Minnesota short-term rental license or transient occupancy permit — fees and processing times vary significantly by location

  3. 3

    Upgrade your property insurance to a short-term rental policy or landlord policy — standard homeowners insurance excludes commercial STR activity

  4. 4

    Form an LLC in Minnesota if operating multiple units — protects personal assets from guest injury claims (filing fee: $155)

  5. 5

    Register with Minnesota Department of Revenue for transient occupancy tax (TOT) or lodging tax collection — Airbnb collects in some states, not all

  6. 6

    Set up professional photography for your listing — properties with professional photos earn meaningfully more per night

  7. 7

    Install smart locks and a noise monitoring device (Minut) — automates guest check-in and protects against unauthorized parties

  8. 8

    Create an Airbnb and VRBO listing with detailed house rules, check-in instructions, and a local welcome guide

Frequently Asked Questions

Starting an Airbnb rental business typically requires a low-to-mid five-figure investment for a dedicated property, primarily covering furnishing, STR permits and insurance, photography, smart home devices, and deposits. Rental arbitrage (leasing and subletting with landlord permission) can launch for a low five-figure outlay.
Earnings vary dramatically by location. A 2-bedroom apartment in a tourist market typically earns a healthy four-figure monthly gross at strong occupancy. Rural and suburban locations earn meaningfully less per month. Use AirDNA or Mashvisor to research comparable property revenue in your target market before investing.
Rental arbitrage involves leasing a property from a landlord and subletting it short-term on Airbnb with the landlord's permission. You pay the monthly long-term rent and earn short-term rental income at a meaningful multiple of that rent on a successful unit. The spread is your profit. Startup costs are lower, but you need landlord consent — most leases prohibit subletting.
No — many cities heavily restrict or ban short-term rentals. New York City, San Francisco, and Barcelona have near-prohibitions. Most cities require permits at a low-three-figure annual fee, limit nights per year (90 days in some jurisdictions), or require owner occupancy. Always verify local STR ordinances and HOA rules before purchasing.

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Start a Airbnb & Vacation Rental Business in Other States

AlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyoming

See the national overview for Airbnb & Vacation Rental Business or browse all businesses you can start in Minnesota.

Disclaimer: The cost estimates on HowMuchToStart.com are for informational purposes only and should not be considered financial or legal advice. Actual startup costs may vary significantly based on location, scale, market conditions, and individual circumstances. We recommend consulting with a local accountant, attorney, or SCORE mentor before making financial decisions. Data sources include the SBA, state government agencies, industry associations, and market research.