How to Start an Airbnb Business in Wisconsin

Why Wisconsin Is a Top Market for Short-Term Rentals

Wisconsin’s tourism economy generates over $23.7 billion annually, making it one of the top 15 tourism states in the country. But here’s the number that matters for STR operators: 115 million visitor-days. That’s how much time travelers spend in Wisconsin each year, and a significant chunk of those visitors need accommodations outside the traditional hotel system.

The state’s tourism infrastructure is anchored by a handful of powerhouse destinations. Door County — the narrow peninsula jutting into Lake Michigan — functions as the Midwest’s Cape Cod, drawing families, couples, and retirees from Chicago, Milwaukee, Minneapolis, and Detroit. Wisconsin Dells brands itself as the “Waterpark Capital of the World” and attracts 4+ million visitors annually. Lake Geneva serves as Chicago’s weekend escape, with a 90-minute drive time that puts it in the sweet spot for Friday-through-Sunday bookings.

What separates Wisconsin from flashier STR markets is the repeat visitor dynamic. Wisconsin tourism runs on loyalty. Families return to the same Door County town every July. Couples revisit Lake Geneva every anniversary. Friends re-book Wisconsin Dells every summer. That repeat behavior creates predictable demand and reduces the marketing effort required to keep properties booked.

The drive-to nature of Wisconsin tourism also matters. Nearly 80% of Wisconsin visitors arrive by car from within a 300-mile radius. When gas prices spike or airfares climb, drive-to destinations hold up better than fly-to markets. That built-in resilience showed clearly during 2022–2023 when inflation-sensitive travelers substituted Wisconsin lake trips for expensive flights to coastal resorts.

Madison and Milwaukee add an urban dimension to the STR opportunity. Madison’s University of Wisconsin campus drives massive game-day demand (Camp Randall Stadium holds 80,000), and the city’s growing tech sector creates consistent business travel. Milwaukee’s Summerfest, Brewers games, and Harley-Davidson Museum pull tourism dollars that extend beyond the traditional vacation season.

Wisconsin Short-Term Rental Laws and Regulations

Wisconsin’s regulatory framework for STRs is shaped by a state law that limits but doesn’t eliminate local authority. Understanding the interplay between state and local regulation is crucial for operating legally.

State-Level Requirements

Wisconsin requires all short-term rental operators (stays under 30 days) to obtain a Tourist Rooming House license from the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP). This is a formal license with real requirements — not just a business registration. The application involves a property inspection covering fire safety, structural integrity, sanitation, and ventilation standards.

Properties must have smoke detectors in every sleeping room and on every level, carbon monoxide detectors, fire extinguishers, and posted evacuation routes. The DATCP inspector will verify compliance before issuing the license. Annual license fees are based on the number of rental units: $95 for a single-unit property, scaling up for multi-unit operations. Inspections occur biennially.

Wisconsin Act 59 (2017) limited municipal authority to regulate STRs, prohibiting cities from outright banning them or requiring additional licenses on top of the state Tourist Rooming House license. However, municipalities retained the ability to set density limits, impose local room tax requirements, and enforce noise/nuisance ordinances. This creates a baseline of statewide consistency while leaving room for local variation.

For rental arbitrage operators, Wisconsin’s Tourist Rooming House license applies regardless of whether you own or lease the property. Your lease must explicitly permit STR subletting, and the property must pass DATCP inspection.

Key City and County Regulations

Door County: Door County is Wisconsin’s most regulated STR market, reflecting the intensity of vacation rental activity on the peninsula. The county enforces the state Tourist Rooming House license requirement rigorously and conducts its own compliance checks. Individual towns within Door County (Sturgeon Bay, Fish Creek, Ephraim, Sister Bay, Egg Harbor) have varying density rules — some cap the percentage of residential properties that can operate as STRs. The town of Ephraim, for example, has imposed a moratorium on new STR permits in certain residential areas. Always check town-level rules before investing in a specific Door County community.

Wisconsin Dells: The Dells area (split between Sauk and Columbia counties) takes a tourism-friendly approach to STR regulation. The state Tourist Rooming House license is enforced, but the cities of Wisconsin Dells and Lake Delton don’t impose additional STR-specific restrictions. The local economy is so dependent on tourism that restrictive regulation would face significant political opposition. This makes the Dells one of the easier Wisconsin markets to enter operationally.

Madison: Madison requires STR operators to comply with the state license and the city’s zoning code. The city distinguishes between owner-occupied STRs (where the host lives in the building) and non-owner-occupied STRs, with the latter requiring a conditional use permit in some residential districts. Madison’s alder-district system means that neighborhood-level politics can influence permit approvals. The city has been generally supportive of STRs but maintains active enforcement against unlicensed operations.

Milwaukee: Milwaukee requires a local license in addition to the state Tourist Rooming House license. The city’s Department of Neighborhood Services reviews applications and may inspect properties. Milwaukee has specific regulations around occupancy limits, parking, and building code compliance for STRs. The Third Ward, Bay View, and Walker’s Point neighborhoods have the densest concentration of STRs and the most active enforcement.

Recent Regulatory Changes (2025–2026)

Door County’s ongoing tension between property owners and full-time residents reached a new chapter in 2025 when the county board adopted a comprehensive STR management plan. The plan established a county-wide STR registry (mandatory), formalized complaint resolution procedures, and set maximum occupancy based on bedroom count. Individual Door County towns are now implementing the plan, with some adding local density caps.

Madison updated its conditional use criteria for non-owner-occupied STRs in late 2025, adding a parking impact assessment and neighbor notification requirement. The changes add process time but haven’t materially reduced approval rates. Wisconsin’s state legislature considered but did not pass a bill in 2025 that would have further limited municipal authority over STRs — the existing Act 59 framework remains in effect.

Tax Obligations for Wisconsin Airbnb Hosts

Wisconsin’s tax structure for STR operators is moderately complex due to the layering of state and local taxes.

Wisconsin State Sales Tax: A 5% state sales tax applies to all short-term rental income. This is collected on the total booking amount including cleaning fees.

County Sales Tax: Most Wisconsin counties impose an additional 0.5% county sales tax, though some counties (including Milwaukee) charge 0.9% or more under special authorizations.

Room Tax: Wisconsin municipalities and counties levy room taxes (also called hotel/tourist taxes) on accommodations rented for fewer than 30 days. Rates vary widely — Door County towns charge 5.5%–8%, Wisconsin Dells charges 8%, and Madison charges 7%. These are among the highest local STR taxes in the Midwest.

Premier Resort Area Tax: Wisconsin Dells, Lake Delton, and several other designated “premier resort areas” impose an additional 0.5% sales tax on top of the standard state and county rates.

Combined Effective Rates: When you stack state sales tax, county tax, and local room tax, Wisconsin STR operators face total tax rates of 11%–14% in most markets. In Wisconsin Dells and Door County, the combined rate can approach 15%.

Airbnb and Vrbo collect and remit the state and county sales taxes in Wisconsin. However, local room taxes are NOT automatically collected by platforms in all Wisconsin municipalities — this is a critical detail many hosts miss. Verify with your specific municipality whether the platform’s collection agreement covers the local room tax. If not, you must register with the Wisconsin Department of Revenue and remit it yourself.

Wisconsin STR hosts can deduct standard rental expenses: cleaning, maintenance, supplies, insurance, platform fees, professional photography, and a portion of mortgage interest and property taxes allocated to rental use. Wisconsin’s state income tax rates range from 3.54% to 7.65%, and rental income is fully taxable at the state level.

Best Cities for Airbnb in Wisconsin

Door County

Door County is Wisconsin’s highest-performing STR market on a revenue-per-property basis. The peninsula’s combination of Lake Michigan beaches, cherry orchards, state parks, waterside dining, and small-town charm draws a devoted visitor base — many families have been visiting for generations.

Average daily rates across Door County range from $180 to $350, with waterfront properties and peak-summer weekends pushing $400+. Occupancy averages 59% annually, but June through September occupancy regularly exceeds 80%. The fall color season (October) provides a strong shoulder month, and the holiday season (Christmas in Door County events) adds December bookings.

The catch: Door County real estate isn’t cheap by Wisconsin standards. Waterfront cottages start at $400K and climb rapidly. Non-waterfront homes in the popular towns of Fish Creek, Ephraim, and Sister Bay run $300K–$500K. But the revenue potential matches the investment — a well-managed three-bedroom cottage can gross $60,000–$85,000 annually. Top-tier waterfront properties clear $100,000+.

New STR operators face the challenge of limited permit availability in some Door County towns. Research the specific town’s density rules before making an offer on any property.

Wisconsin Dells

The Dells market runs on volume and families. With over 4 million annual visitors (mostly families with children), the demand is massive and concentrated in the summer months. ADRs average $140–$250, with occupancy averaging 55% annually but spiking to 85%+ from Memorial Day through Labor Day.

The Dells is a waterpark and theme park market, which means the guest profile skews toward families seeking affordable fun. Properties that accommodate large groups (4+ bedrooms, game rooms, private pools) outperform smaller units significantly. The Dells also benefits from a strong fall tourism push, with several resorts and attractions extending seasons into October.

Property costs are moderate. Houses in the Dells/Lake Delton area start around $200K–$350K. The lower cost of entry compared to Door County, combined with the massive visitor volume, makes the Dells attractive for operators focused on occupancy over ADR. Arbitrage and co-hosting models also have potential here, as the area has a substantial rental housing market.

Lake Geneva

Lake Geneva operates as Chicago’s premier weekend getaway, and that proximity to 9.5 million metro residents defines the market dynamics. Ninety minutes by car from downtown Chicago, Lake Geneva fills every weekend from May through October with urban escapees seeking lake time, dining, and relaxation.

ADRs range from $175 to $320, with summer weekends at the top of that range. Annual occupancy averages 54%, reflecting the seasonal concentration. However, the weekend-heavy booking pattern means that Thursday–Sunday occupancy during summer exceeds 90% for desirable properties.

Lakefront properties command extreme premiums (homes directly on Geneva Lake start at $1M+), but you don’t need lakefront to succeed. Properties within a 10-minute drive of downtown Lake Geneva or the lakeshore parks perform well, with acquisition costs in the $275K–$450K range. The guest demographics (affluent Chicago professionals) support higher nightly rates and lower property damage rates compared to family-focused markets.

Madison

Madison’s STR market differs from the vacation-rental-heavy markets elsewhere in Wisconsin. Here, demand is driven by the University of Wisconsin (50,000+ students, major football and basketball programs), the state capitol (legislative sessions, government events), and a growing tech sector anchored by Epic Systems.

ADRs in Madison average $130–$210. Annual occupancy sits around 62%, one of the highest in Wisconsin, because demand isn’t locked into a single season. Football weekends (September–November) create booking events where rates spike 2–3x. Graduation weekend in May is another premium period. Summer brings Ironman Wisconsin, Taste of Madison, and Capitol Square events.

The co-hosting and arbitrage models work well in Madison’s large rental market. Monthly rents for a two-bedroom near campus or downtown run $1,400–$2,000, with STR potential of $2,800–$4,200/month. The challenge is finding landlords who will permit short-term subletting in a city where student housing demand keeps long-term vacancy near zero.

How Much Do Airbnbs Make in Wisconsin?

Wisconsin’s STR revenue reflects the Midwest’s value proposition: strong demand at moderate price points, with excellent returns relative to property costs.

Door County’s top performers push past $100,000 in annual revenue, driven by waterfront locations, professional management, and premium furnishing. In the Dells, large homes (5+ bedrooms) that accommodate family reunions and group trips gross $60,000–$75,000. Lake Geneva’s highest performers are properties that combine lake proximity with upscale design — the Chicago clientele will pay for aesthetics.

The common pattern across Wisconsin’s top STR markets: properties that invest in the guest experience (not just the property structure) significantly outperform those that don’t. A fire pit, kayaks, a stocked game room, or a well-designed outdoor living space can boost revenue by 20–35% over an identical property without those amenities.

How to Start Your Wisconsin Airbnb Business

Wisconsin’s licensing requirements make the startup process more structured than most states. Follow this sequence to avoid costly delays.

Step 1: Obtain your Tourist Rooming House license. This is Step 1 because it’s non-negotiable and takes time. Apply through the Wisconsin DATCP, schedule your property inspection, and address any deficiencies before listing. Budget 4–6 weeks for the full process. Operating without this license carries fines of up to $1,000 per violation.

Step 2: Choose your market strategically. Door County for premium vacation rentals (higher investment, higher returns). Wisconsin Dells for volume-driven family tourism. Lake Geneva for affluent weekend getaways. Madison for year-round event-driven demand. Milwaukee for urban tourism and event-driven spikes. Each market has distinct guest profiles and operational requirements.

Step 3: Register your business and tax accounts. Form an LLC with the Wisconsin Department of Financial Institutions ($130 online, $170 by mail). Register for sales tax with the Wisconsin Department of Revenue. Register for local room tax with your municipality. Verify whether Airbnb/Vrbo’s collection agreement covers your local room tax — if not, set up your own remittance account.

Step 4: Secure and prepare your property. If buying, focus on properties that meet DATCP inspection standards or can be brought into compliance affordably. Older Wisconsin homes may need electrical, plumbing, or fire safety upgrades. Factor these costs into your acquisition analysis. If leasing for arbitrage, confirm that the landlord will cooperate with the DATCP inspection process.

Step 5: Furnish for your target guest. A Door County cottage needs nautical charm, quality linens, and a well-stocked kitchen for guests who cook. A Dells property needs kid-friendly furnishing, durable materials, and entertainment options (game consoles, board games, pool toys). A Lake Geneva property needs design-forward aesthetics for the Instagram-conscious Chicago crowd. Match the furnishing to the guest.

Step 6: Build your listing with Wisconsin-specific appeal. Emphasize seasonal activities: cherry picking in Door County (July), football weekends in Madison (fall), ice fishing and snowmobiling (winter), wildflower hikes (spring). Include driving distances to specific attractions, not just generic area descriptions. Professional photography capturing Wisconsin’s landscapes is essential.

Step 7: Implement seasonal pricing. Wisconsin’s markets have sharp seasonal swings. A Door County property might charge $350/night in July and $120/night in March. A Madison property spikes to $400+ on football weekends and drops to $130 on random Tuesdays. Dynamic pricing tools calibrated to local events are mandatory, not optional.

Step 8: Prepare for Wisconsin winters. Even if your primary season is summer, your property exists through winter. Winterize plumbing, maintain heating systems, arrange snow removal, and consider whether to accept winter bookings (lower rate but keeps the property maintained) or shut down (saves operational costs but generates no revenue). Many Wisconsin hosts find that winter bookings at reduced rates cover the carrying costs of the property.

Wisconsin STR Insurance and Liability

Wisconsin’s DATCP licensing requirement creates an additional layer of compliance that intersects with insurance coverage. Your insurer should be aware of your Tourist Rooming House license and the activities your property supports.

STR-Specific Insurance: Proper Insurance, Safely, and CBIZ operate in Wisconsin. Annual premiums typically range from $1,200 to $3,500, with waterfront properties (Door County, Lake Geneva) at the higher end due to water-related liability risks. Policies should cover property damage, guest liability, lost income, and personal property.

Waterfront Liability: If your property has lake or river access, water-related liability is your biggest exposure. Guests drowning, dock injuries, and boating accidents are covered risks. Ensure your policy explicitly includes waterfront liability, and consider requiring guests to sign a liability waiver for water activities. Some insurers require fencing around pools or restrict hot tub access without additional premium.

Winter-Specific Risks: Slip-and-fall injuries on icy walkways and stairs are common insurance claims for Wisconsin STRs. Frozen pipe damage (particularly in unoccupied winter properties) can cause extensive water damage. Roof collapse from snow load, while rare, is covered under most comprehensive policies. Ensure your policy covers these seasonal risks.

Airbnb’s AirCover provides supplemental coverage but has limits that Wisconsin’s specific risk profile can exceed. A standalone STR policy plus a personal umbrella ($1M–$2M at $200–$400/year) is the recommended structure.

Why 10XBNB Gives You the Edge in Wisconsin

Wisconsin’s STR market looks approachable on the surface. Friendly regulations, strong tourism numbers, recognizable destinations. But the operators consistently earning top-quartile returns are doing things differently than the average host who throws a property on Airbnb and waits for bookings.

The edge comes from systems. Pricing a Door County cottage across four distinct seasons (each with different demand drivers) requires a framework, not guesswork. Navigating the DATCP licensing process efficiently saves weeks of lost revenue. Understanding which Door County town still has permit availability — and which ones have effectively capped new STRs — prevents expensive mistakes.

10XBNB teaches these systems. The program covers market analysis techniques that identify where demand outstrips supply in Wisconsin’s micro-markets, pricing strategies that capture maximum revenue during compressed peak seasons, and operational frameworks that scale across multiple properties. For Wisconsin hosts specifically, the state-by-state market intelligence helps you make data-driven decisions rather than following the crowd into oversaturated corridors.

Whether you’re eyeing your first Door County cottage or scaling a portfolio across multiple Wisconsin markets, the difference between average and exceptional performance comes down to how systematically you approach every decision from acquisition through operations.

Frequently Asked Questions

Do I need a license to run an Airbnb in Wisconsin?
Yes. Wisconsin requires all short-term rental operators to obtain a Tourist Rooming House license from the Department of Agriculture, Trade and Consumer Protection (DATCP). This involves a property inspection and annual fees starting at $95. Operating without this license carries fines up to $1,000 per violation. Some municipalities (like Milwaukee) require an additional local license.

How much tax do Wisconsin Airbnb hosts pay?
Wisconsin STR hosts pay a 5% state sales tax, a 0.5%+ county sales tax, and a local room tax ranging from 5.5% to 8% depending on the municipality. Combined effective tax rates fall between 11% and 15% in most Wisconsin STR markets. Airbnb and Vrbo collect state and county sales taxes, but local room taxes may require separate remittance. Check with your specific municipality.

Is Door County still a good investment for Airbnb?
Door County remains Wisconsin’s highest-revenue STR market, but entry barriers are rising. Some towns have capped new STR permits, and property prices are above the state average. Operators who secure permits in towns that still have availability and invest in quality properties continue to see strong returns. Research the specific town’s permit status before making any offer.

What is the Tourist Rooming House license inspection like?
A DATCP inspector visits your property and checks fire safety (smoke/CO detectors, fire extinguishers, evacuation routes), structural integrity (handrails, stair safety, window egress), sanitation (clean water supply, functioning septic/sewer, bathroom facilities), and ventilation. Most properties in reasonable condition pass without major issues. Common deficiencies include missing CO detectors and inadequate handrails.

Can I do rental arbitrage in Wisconsin?
Rental arbitrage is possible in Wisconsin, particularly in Madison and Milwaukee where the rental market is large enough. The challenge is the Tourist Rooming House license requirement — the property must pass DATCP inspection regardless of whether you own or lease it. Your landlord must agree to the STR use and the inspection process. Madison offers the strongest arbitrage potential due to high event-driven demand and a large apartment inventory.

When is the best time to buy an STR property in Wisconsin?
Late fall through early spring (November–March) offers the best acquisition pricing for vacation-area properties. Sellers who listed in summer without finding a buyer become more motivated. This timing also allows you to complete renovations and DATCP licensing before the lucrative summer season begins. Avoid buying during peak summer when competition from other buyers inflates prices, especially in Door County and Lake Geneva.