80 property owners enter Duluth drawing in pursuit of vacation rental permits

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Duluth, Minnesota, with a population of 89,000 has a total of 60 vacation home permits, and is holding lotteries for 10 permits/year for 6 years, which will mean 120 STRs for a city of 89,000. I would think that a city on Lake Superior would want to promote more tourism, not less, especially when they have 80 applicants for 10 permits.

I live in a town that has, at my last count, about 60 STRs, with a population of 33,000 and no regulation other than having a state business license, meeting building codes and paying sales and room taxes. The market here tends to be self limiting because there has always been a housing shortage, but it’s at the low end of the rental market.

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I’m considering another rental purchase. The prices in my area have gone crazy. I’m trying to figure out if it is worth it to purchase at these prices.

I went to a construction website: Prior to 2006 X millions of new construction homes were built each year to meet demand, Because real estate values crashed in 2006 then little construction, more stringent mortgage qualification rules, lack of materials, Covid, supply chain problems, & few available workers, it is anticipated there will be a housing shortage for at least the next 10 years.

There is the perception STRs are taking full time housing out of the market & making it worse. In some areas I think this is true.

I think as we see local governments being pushed to do something about the housing shortage, we will see more of this kind of restrictions / limitations. Get ready.

Btw-about prices. A friend purchased a 1br condo in 2017. Shocking Great price—family settling an estate. A condo exactly like it is on the market now for 320% of what my friend paid.

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Dependent on location, a brave move in these current times; or maybe you’re just rich. I think we should be told :wink:

JF

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Definitely not rich—Joint financial venture with Dad.

Long term rentals are having better than market (inflation) price increases & decent properties are getting great monthly rental $$. The trick is going to be finding the right property at the right price & beating everyone else to it.

I’m hoping to network & find something before it is listed.

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