Minnesota is home to many thriving short-term rental markets, but identifying the top-performing cities can be overwhelming, especially when combing through data from countless locations across the state.
To simplify this process, we analyzed data from markets statewide and compiled a list of the top 6 cities for investors and landlords seeking potentially high-return rental properties in the coming year.
As always, we recommend thorough underwriting and analysis of any prospective property and a review of local short-term rental regulations before making any investment decisions.
How We Created This List
First, we looked at all Airbnb listings in Minnesota that met the following criteria as of January 2025:
- Average Rating: 4.8 stars and above
- Guest Review Count: Minimum of 10
- Average Daily Rate: $1 (minimum) to $2,000 (maximum)
- Occupancy Rate: 1% (minimum) to 99% (maximum)
- Property Size: 1 to 10 bedrooms
- Property Type: Entire homes
We did this to eliminate Airbnb listings from our analysis that fall outside of what we consider "realistic" situations. This left us with a total of 1,965 Airbnb listings across the state of Minnesota to work with.
Next, we grouped these listings by city and eliminated markets that didn't have at least 75 Airbnb listings meeting the above criteria. We took this step to avoid outlier cities we felt didn't have enough data to be considered at this current time. This left us with 6 cities in Minnesota to rank.
Then, we needed to arrive at a gross yield number for each of our remaining cities in order to create our rankings. We did this by taking the average annual Airbnb revenue for each city and combining it with the cities median property value (from Zillow as of December 2024) to calculate our gross yield for each city.
Finally, we ordered the cities by highest gross yield.
The Top 6 STR Markets in Minnesota
1. Duluth, MN
Duluth, MN, nestled along the beautiful Lake Superior shoreline, is a thriving hub for short-term rental properties, making it one of the best places for vacation rentals in 2025. The city's vibrant tourism scene, highlighted by attractions like the historic Canal Park, Lakewalk, and the awe-inspiring Aerial Lift Bridge, attracts visitors year-round. With events like Grandma's Marathon and a passionate sports culture, including local hockey and college teams, Duluth promises robust rental income for real estate investors looking for good return on investment properties in a growing real estate market.
Key STR Metrics:
- Average Gross Yield: 14.5%
- Average Property Value: $399,630 (as of December 2024)
- Average Annual Revenue: $58,065 (past 12 months)
- Average Occupancy Rate: 45% (past 12 months)
- Qualifying Airbnbs: 226 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 105%
Find Airbnbs For Sale in Duluth, MN →
2. Two Harbors, MN
Two Harbors, MN is a hidden gem for real estate investors eyeing the short-term rental market. Nestled on the scenic North Shore of Lake Superior, it's a hotspot for vacation homes due to its outdoor attractions like Gooseberry Falls and Split Rock Lighthouse. Each year, it hosts the North Shore Inline Marathon, attracting tourists and boosting rental income for Airbnb hosts. The vibrant tourism scene and growing real estate market make Two Harbors one of the best places for short-term rental properties, offering good return and steady cash flow for savvy investors.
Key STR Metrics:
- Average Gross Yield: 11.9%
- Average Property Value: $462,921 (as of December 2024)
- Average Annual Revenue: $54,902 (past 12 months)
- Average Occupancy Rate: 46% (past 12 months)
- Qualifying Airbnbs: 90 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 154%
Find Airbnbs For Sale in Two Harbors, MN →
3. Grand Marais, MN
Grand Marais, MN, is a hidden gem for real estate investors seeking lucrative short-term rental properties. Located on the picturesque North Shore of Lake Superior, this charming town offers vacation homes that attract tourists year-round. Known for its vibrant arts scene, outdoor recreation, and special events like the Grand Marais Art Festival, it entices guests with unique attractions. As a top spot for vacation rentals, the area promises good return and rental income for Airbnb hosts seeking to capitalize on this burgeoning short-term rental market.
Key STR Metrics:
- Average Gross Yield: 9.4%
- Average Property Value: $619,197 (as of December 2024)
- Average Annual Revenue: $58,065 (past 12 months)
- Average Occupancy Rate: 53% (past 12 months)
- Qualifying Airbnbs: 87 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 48%
Find Airbnbs For Sale in Grand Marais, MN →
4. Saint Paul, MN
Saint Paul, MN, offers a vibrant short-term rental market perfect for real estate investors seeking good returns. As the state capital, it boasts attractions such as the iconic Cathedral of Saint Paul and the interactive Science Museum of Minnesota. Sports enthusiasts will enjoy catching a Minnesota Wild hockey game. Special events like the Saint Paul Winter Carnival attract tourists year-round, ensuring steady rental income for Airbnb hosts. With its blend of culture and sports, Saint Paul is one of the best places for investment properties in vacation homes.
Key STR Metrics:
- Average Gross Yield: 9.0%
- Average Property Value: $417,388 (as of December 2024)
- Average Annual Revenue: $37,412 (past 12 months)
- Average Occupancy Rate: 43% (past 12 months)
- Qualifying Airbnbs: 399 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 65%
Find Airbnbs For Sale in Saint Paul, MN →
5. Minneapolis, MN
Minneapolis, MN, is a vibrant hotspot for short-term rental properties, attracting tourists year-round with its dynamic cultural scene. Home to iconic attractions like the Mall of America and the Minneapolis Institute of Art, the city also draws sports fans to watch the Vikings and Twins. Annual events like the Minnesota State Fair ensure a steady stream of guests. With a robust housing market, real estate investors find lucrative opportunities in vacation homes and Airbnb properties, promising good rental income and cash flow for savvy investors.
Key STR Metrics:
- Average Gross Yield: 8.1%
- Average Property Value: $490,323 (as of December 2024)
- Average Annual Revenue: $39,480 (past 12 months)
- Average Occupancy Rate: 45% (past 12 months)
- Qualifying Airbnbs: 894 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 83%
Find Airbnbs For Sale in Minneapolis, MN →
6. Rochester, MN
Rochester, MN offers a vibrant short-term rental market ideal for real estate investors seeking substantial rental income. Home to the renowned Mayo Clinic, it attracts numerous visitors annually, ensuring good cash flow potential. The lively downtown features unique shops, and top dining spots, while local attractions like the Quarry Hill Nature Center appeal to tourists. Annual events like Thursdays Downtown and Rochesterfest attract guests, making vacation rentals a prime investment property opportunity for Airbnb hosts in this flourishing housing market.
Key STR Metrics:
- Average Gross Yield: 6.0%
- Average Property Value: $493,641 (as of December 2024)
- Average Annual Revenue: $29,625 (past 12 months)
- Average Occupancy Rate: 53% (past 12 months)
- Qualifying Airbnbs: 269 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 102%
