How to Start an Airbnb Business in North Dakota

North Dakota isn’t on most people’s Airbnb radar — and that’s exactly what makes it profitable for hosts who move early. The state pulled in 22.5 million visitor trips in 2023, driven by Theodore Roosevelt National Park, the Bakken oil fields, and a growing events calendar in Fargo and Bismarck. Meanwhile, STR competition remains thin. There are fewer than 2,500 active short-term rental listings statewide, compared to 15,000+ in neighboring Minnesota.

That supply gap creates opportunity. Business travelers in western North Dakota’s oil patch still struggle to find quality short-term housing. Families visiting Theodore Roosevelt National Park discover that Medora has limited hotel inventory. Fargo’s tech scene and NDSU events generate consistent weekend demand that most hosts aren’t capturing yet.

Whether you’re exploring rental arbitrage in Fargo or buying property near the Badlands, this guide covers every angle — regulations, taxes, revenue potential, and the specific strategies that work in North Dakota’s unique market.

Why North Dakota Is a Top Market for Short-Term Rentals

North Dakota’s STR appeal comes from a combination of factors that most investors overlook:

• Oil industry housing demand. The Bakken formation in western North Dakota drives massive temporary workforce demand. During drilling surges, workers need housing for weeks or months at a time. Traditional apartments are scarce in towns like Williston and Watford City, creating premium pricing power for furnished short-term rentals.
• Low competition. North Dakota ranks among the bottom five states for STR listings per capita. In Bismarck, you might have 150-200 active Airbnb listings competing for a metro area of 130,000 people. That ratio is dramatically more favorable than almost any market in Colorado, Tennessee, or Florida.
• Affordable property prices. Median home prices in Fargo hover around $290,000, and Bismarck sits near $275,000. Compare that to $450,000+ in comparable-sized cities in the Mountain West. Lower acquisition costs mean faster break-even timelines.
• Growing tourism infrastructure. Theodore Roosevelt National Park hit record visitation in recent years, with over 600,000 visitors annually. The Medora Musical, Maah Daah Hey Trail, and expanding mountain biking trails are extending the tourist season beyond the traditional June-August window.
• No state-level STR restrictions. North Dakota has no statewide short-term rental licensing or registration requirement, making it one of the most operator-friendly states in the country.

I’ve talked to hosts in Williston who charge $150/night for a basic two-bedroom apartment and maintain 85%+ occupancy — numbers that would be exceptional in most markets but are standard when your primary guest base is oil field workers on per diem.

North Dakota Short-Term Rental Laws and Regulations

North Dakota’s regulatory environment for short-term rentals is among the lightest in the country. The state government has not enacted STR-specific legislation, leaving regulation almost entirely to municipalities. That said, you still have state-level tax obligations and should verify local rules in your specific city.

State-Level Requirements

At the state level, North Dakota requires STR operators to:

• Collect and remit state sales tax. Short-term accommodations (under 30 consecutive days) are subject to North Dakota’s 5% state sales tax. You must register for a sales tax permit through the North Dakota Office of State Tax Commissioner.
• Collect applicable city lodging taxes. Many North Dakota cities impose an additional lodging tax (typically 2-3%) on short-term accommodations. This is collected and remitted alongside state sales tax in most cases.
• Comply with state building and fire codes. Properties must meet basic life safety requirements, including working smoke detectors and carbon monoxide detectors.

There is no statewide STR permit, mandatory inspection program, or registration database. North Dakota trusts municipalities to regulate as they see fit.

Key City Regulations

Fargo: Fargo’s approach to STRs has evolved in recent years. The city requires a conditional use permit for short-term rentals in residential zones, which involves an application to the planning commission. The permit process examines parking availability, neighborhood impact, and property maintenance standards. Fargo also enforces occupancy limits based on bedroom count. The conditional use permit runs approximately $350 and takes 4-6 weeks to process. Once approved, renewals are straightforward.

Bismarck: Bismarck requires short-term rental operators in residential areas to obtain a home occupation permit. The process is simpler than Fargo’s — it’s an administrative review rather than a planning commission hearing. Bismarck’s ordinance limits STR activity to owner-occupied properties in certain residential zones but allows non-owner-occupied STRs in commercial and mixed-use zones without restriction. Permit fees are minimal (under $100).

Williston: Williston has taken a pragmatic approach given the oil industry’s housing needs. The city permits short-term rentals broadly, with basic registration through the city auditor’s office. The focus is on safety compliance and tax collection rather than restricting supply. Properties must meet fire safety standards and maintain current city business licenses.

Medora: This tiny tourist town near Theodore Roosevelt National Park operates primarily as a seasonal destination. Most properties function as vacation rentals during the May-September season. Medora’s regulations are minimal — basic business registration and compliance with Billings County building codes. The town actively encourages short-term rental development to support its tourism economy.

Recent Regulatory Changes (2025-2026)

North Dakota’s 2025 legislative session saw minimal STR-related activity. A proposal to create a statewide STR registry was introduced but didn’t advance past committee. The general legislative stance remains favorable toward property rights and minimal regulation.

At the municipal level, Fargo updated its conditional use permit process in late 2024 to streamline renewals for existing STR operators. Grand Forks has begun considering its own STR ordinance, focused primarily on noise and parking rather than restricting supply. The regulatory trend across North Dakota remains stable and operator-friendly.

Tax Obligations for North Dakota Airbnb Hosts

North Dakota’s tax structure for STR operators involves multiple layers, but the total burden remains moderate compared to most states.

State sales tax (5%): All short-term accommodation rentals (under 30 consecutive days) are subject to North Dakota’s 5% state sales tax. You must register for a sales tax permit and file returns monthly or quarterly depending on volume. Airbnb collects and remits this tax automatically for bookings made on their platform. VRBO also handles state sales tax collection in North Dakota.

City lodging tax (1-3%): Most North Dakota cities impose an additional lodging tax. Fargo charges 2%, Bismarck charges 2%, and Williston charges 1%. These are typically collected alongside the state sales tax. Not all cities have a lodging tax, so verify your specific municipality’s requirements.

State income tax: North Dakota has a state income tax, but rates are among the lowest in the country. As of 2025, the top marginal rate is 2.5% on income over $225,000 (for single filers). Most STR operators will pay 1.95% or less on their net rental income. North Dakota recently simplified its tax brackets, reducing the number from five to three.

Property tax: North Dakota’s average effective property tax rate is approximately 0.98% — below the national average. Cities like Fargo and Bismarck fall close to this average. Property taxes are a manageable operating expense in North Dakota compared to New England or the Upper Midwest.

Self-employment tax: If you actively manage your STR (most hosts do), expect to owe federal self-employment tax of 15.3% on net earnings. This applies regardless of your state.

Best Cities for Airbnb in North Dakota

Fargo

Fargo is North Dakota’s largest city (pop. 130,000+) and its strongest overall STR market. The city benefits from NDSU football and basketball games, a growing tech sector (Microsoft, Appareo Systems), strong medical tourism (Sanford Health and Essentia Health draw patients regionally), and a vibrant arts and dining scene that attracts weekend visitors from across the region. ADRs for a well-furnished two-bedroom average $110-$155. Occupancy rates run 62-70% annually, with spikes during NDSU home games, the Fargo Marathon (May), and summer festivals. A solid two-bedroom unit can gross $28,000-$38,000 per year. Arbitrage is viable here — apartment leases in downtown Fargo run $1,200-$1,600/month for a two-bedroom.

Bismarck / Mandan

North Dakota’s capital city offers steady demand from government workers, legislative sessions (every two years), and travelers accessing the Missouri River corridor. Bismarck lacks Fargo’s event-driven spikes but provides more consistent year-round demand. ADRs average $100-$140 for a two-bedroom. Occupancy rates range 55-65%. Annual gross revenue for a well-managed property: $22,000-$32,000. The United Tribes International Powwow (September) and the state legislative session (January-April in odd years) create notable demand bumps.

Williston / Watford City (Bakken Oil Region)

The Bakken market is unlike any other STR market in the country. Your primary guests aren’t vacationers — they’re oil field workers, pipeline inspectors, and traveling professionals who need clean, furnished housing for one to eight weeks at a time. During active drilling periods, demand outstrips supply dramatically. ADRs in Williston range $120-$175 for a two-bedroom, with extended-stay discounts common (weekly rates of $700-$900). Occupancy during boom periods hits 85-95%. Annual gross can reach $35,000-$50,000 even for modest apartments. The risk: oil price crashes tank demand rapidly. Diversifying with a mix of oil workers and Theodore Roosevelt NP tourists provides some hedge.

Dickinson

Dickinson sits between the Bakken oil fields and Theodore Roosevelt National Park, capturing both workforce housing demand and tourist traffic. The city has grown significantly since the oil boom and offers affordable property prices ($200,000-$280,000 for a single-family home). ADRs average $95-$135 for a two-bedroom. Occupancy runs 50-65%, heavily influenced by oil activity and summer tourism. Annual gross revenue: $18,000-$28,000. Dickinson’s advantage is its dual demand base and very low acquisition costs.

Medora / Theodore Roosevelt National Park

Medora is a pure seasonal play. The town essentially shuts down from October through April, but summer demand is intense. The Medora Musical draws over 100,000 attendees per season, and Theodore Roosevelt NP attracts 600,000+ visitors annually. Properties near the park command ADRs of $150-$250 during peak summer months. The challenge: the season is short (roughly May-September), and year-round occupancy averages only 30-40%. A well-positioned Medora-area property can gross $20,000-$30,000 in those five months alone, which makes the math work if acquisition costs are low.

How Much Do Airbnbs Make in North Dakota?

North Dakota isn’t going to produce the jaw-dropping per-property revenue numbers you see from mountain resort towns in Colorado or beachfront properties in Florida. What it does offer is strong margins relative to investment cost.

A two-bedroom apartment in Fargo leased for $1,400/month through rental arbitrage and listed at $130/night with 65% occupancy generates approximately $30,800 in gross annual revenue. After the $16,800 lease, $4,000 in cleaning costs, $1,200 in supplies and utilities, and $2,500 in platform fees, your net lands around $6,300. That’s a solid return for a single unit with no property purchase required.

On the ownership side, a $250,000 property in Bismarck generating $28,000 in gross revenue looks modest until you factor in the low property taxes ($2,450/year), no state income tax drama, and the equity appreciation. North Dakota property values have increased 4-6% annually in major metros over the past five years.

The Bakken market is the outlier. During active drilling periods, a $200,000 house in Williston can gross $40,000-$50,000 annually. During slowdowns, that same property might struggle to hit $20,000. If you’re entering the western North Dakota market, you need cash reserves for the downswings.

The path to real income in North Dakota is volume. Individual property margins are moderate, but acquiring and managing five to eight units in a low-competition market is far more achievable than doing the same in Denver or Nashville. That’s where the arbitrage model shines — scale without capital-intensive property purchases.

How to Start Your North Dakota Airbnb Business

Step 1: Choose your market niche. North Dakota has three distinct STR markets: urban/event-driven (Fargo, Bismarck), oil field workforce housing (Williston, Watford City, Dickinson), and tourism/seasonal (Medora, Lake Sakakawea area). Each requires different strategies. Oil field housing demands durability and functionality over aesthetics. Tourism properties need charm and location. Urban units need proximity to downtown and event venues.

Step 2: Verify local regulations. Contact your city’s planning department or auditor’s office. In Fargo, you’ll need a conditional use permit. In Bismarck, a home occupation permit. In smaller towns, you may need nothing beyond your tax registration. Get clarity in writing before investing.

Step 3: Register for state and local tax collection. Apply for a sales tax permit through the North Dakota Office of State Tax Commissioner. This process is straightforward and can be completed online. You’ll receive your permit within 1-2 weeks.

Step 4: Establish your business entity. File an LLC with the North Dakota Secretary of State ($135 filing fee). North Dakota’s LLC formation process is simple and fast — typically 3-5 business days for online filings.

Step 5: Secure your property. For arbitrage, target apartments in Fargo’s downtown or south side neighborhoods. For oil field housing, look for durable properties in Williston and Watford City that can withstand heavy use. For tourism, focus on proximity to Theodore Roosevelt NP or Lake Sakakawea.

Step 6: Furnish strategically for your guest profile. Oil field workers need reliable Wi-Fi, a washer/dryer, a full kitchen, and a comfortable workspace. They don’t care about decorative throw pillows. Tourists want comfortable beds, local character, and outdoor gear recommendations. Match your furnishing budget to your guest’s actual priorities.

Step 7: Price for your market. Use dynamic pricing tools, but understand that North Dakota markets have less third-party pricing data than major metros. You’ll need to manually monitor competitor rates on Airbnb and Furnished Finder (especially for oil field listings). Set weekly and monthly discount rates — extended stays are a major revenue source in North Dakota.

Step 8: List on multiple platforms. In North Dakota, Airbnb alone won’t fill your calendar. List on VRBO, Furnished Finder (critical for oil field markets), Facebook Marketplace, and consider direct outreach to oil companies and contractor firms for corporate bookings.

Step 9: Build local relationships. In smaller North Dakota markets, word of mouth drives significant business. Connect with local real estate agents, oil company housing coordinators, hospital HR departments (for traveling nurses in Fargo/Bismarck), and the local chamber of commerce.

North Dakota STR Insurance and Liability

Insurance for North Dakota STRs requires attention to the state’s specific climate and use-case risks.

Climate-related risks: North Dakota experiences extreme cold (winter temperatures regularly hit -20°F and below), heavy snow loads, and spring flooding. Your insurance policy must cover frozen pipe damage, roof collapse from snow accumulation, and flood damage if you’re in a Missouri River or Red River floodplain. Standard STR policies may not automatically include flood coverage — you’ll likely need a separate NFIP policy if you’re in a designated flood zone.

Oil field property risks: Properties housing oil field workers face heavier wear and tear than vacation rentals. Ensure your policy covers commercial-level use if you’re consistently renting to work crews. Some insurers classify oil field housing differently than vacation rentals, which can affect premiums and coverage terms.

Dedicated STR insurance from providers like Proper or CBIZ typically runs $1,000-$2,000 annually in North Dakota — significantly less than coastal states. Umbrella policies for multi-property operators add $500-$1,000 per year for an additional $1-2 million in liability coverage.

Airbnb’s Host Protection Insurance provides $1M in liability coverage as secondary insurance. For a thorough breakdown of what’s covered and what’s not, read our guide: Does Insurance Cover Airbnb?

Why 10XBNB Gives You the Edge in North Dakota

North Dakota’s STR market rewards operators who understand niche demand drivers — oil field cycles, university event calendars, legislative sessions, national park seasonality. Generic Airbnb advice from coastal-focused influencers doesn’t account for the realities of hosting in a market where your busiest week might be NDSU homecoming or a Bakken drilling surge.

10XBNB teaches the fundamentals that work everywhere — market analysis, listing optimization, dynamic pricing, and scaling systems — but the real value is the framework for evaluating any market, including underrated ones like North Dakota where competition is thin and margins are strong. Our students learn to spot the same opportunities in their local markets that experienced investors find, without needing years of trial and error.

The hosts who thrive in North Dakota aren’t the ones with the fanciest properties. They’re the ones who understand their guest, price correctly, and operate efficiently. That’s a system, and it’s exactly what 10XBNB delivers. Check how North Dakota stacks up against other markets on our best states for Airbnb analysis.

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