Posted: March 12, 2024

Short Term Rentals Guide: Wisconsin Dells, Wisconsin

Rentals

Short Term Rentals

Welcome to the ultimate guide to investing in short-term rentals in Wisconsin Dells, a popular regional vacation destination in the Midwest! Known as “The Dells” and also the “Waterpark Capital of the World,” Wisconsin Dells, located in south-central Wisconsin and nestled on the banks of the Wisconsin River. The Dells are a beautiful natural cliff formation and the headline attraction for visitors. However, there is much more to this market to attract vacation visitors. It’s no wonder that many Midwestern short term rental investors are choosing Wisconsin Dells for short term rental investment properties. This guide will cover the market’s top demand drivers, recommended investment locations, how to finance these STRs with Easy Street Capital’s industry leading STR Loans and the latest updates on the rules and regulations for short term rentals in Wisconsin Dells, Wisconsin!

Why is Wisconsin Dells So Popular for Vacation Rentals?

When it comes to finding where to invest in vacation rentals – market matters – big time! One of the most important things in choosing a short term rental market are “demand drivers.” What are demand drivers? These are things in the area that drive people to come to visit for vacation and stays at short term rentals. These are the people booking your investment property, paying the rents, and providing the real estate returns. So it’s very important to choose a market or city with many diverse demand drivers.

Wisconsin Dells is a great market for Vacation Rentals primarily because of its great reputation for river-related outdoor activities, particularly in the warm Wisconsin summers. However, savvy investors know there is more to the Dells than warm-weather water adventures. Visitors come to Wisconsin Dells for the numerous theme parks, including water parks fully indoors and accessible in the winter weather. There are numerous historical museums and tours including multiple spooky options for guests who have a taste for ghost-hunting! Its no wonder Wisconsin Dells is becoming a popular market for short term rental investors and included on AirDNAs Top 25 Markets to Invest in Vacation Rentals in 2024!

Top Things To Do in Wisconsin Dells (STR Demand Drivers)

See The Dells! Wisconsin River Attractions

The Wisconsin River is a beautiful and scenic waterway that offers a variety of activities and attractions for visitors. One popular way to experience the river is by taking a boat tour. Popular options include the Original Wisconsin Ducks Dells Boat Tours, or Jet Boat Adventures. These tours provide a unique perspective of the river and its surroundings, including the stunning sandstone formations and wildlife.

For those who prefer a more active experience, the Wisconsin River is a great place for kayaking, canoeing, and fishing. There are several rental companies in the area that provide equipment and guided tours for these activities. The river is also home to a variety of fish species, making it an excellent destination for anglers.

In addition to water-based activities, the Wisconsin River area offers plenty of opportunities for hiking, camping, and wildlife viewing. The Dells of the Wisconsin River State Natural Area is a must-visit for its unique rock formations and scenic hiking trails. The area is also home to the International Crane Foundation, where you can observe all 15 species of cranes in the world.

Waterparks and Winter Attractions

Wisconsin Dells is known as the Waterpark Capital of the world and another reason visitors flock to central Wisconsin. Many consider that the indoor waterpark was pioneered in Wisconsin Dells, allowing visitors to enjoy the attractions even in the cold Wisconsin winters.

One of the top waterparks in the area is Noah’s Ark Water Park, the largest outdoor waterpark in the United States. With over 70 acres of water attractions, including thrilling slides, wave pools, and lazy rivers, there’s something for everyone in your family to enjoy.

For those seeking an indoor waterpark experience, the Kalahari Resort boasts a massive 125,000 square foot indoor waterpark that is perfect for year-round fun. Experience the thrill of the Master Blaster water coaster, or chillax in the indoor wave pool.

Many people and potential vacation rental investors may assume Wisconsin Dells isn’t a great place to invest in STRs due to seasonality. While it is a no doubt great market to own an STR in summertime, don’t write off this market in the winter months! Many of the Waterparks, including the Kalahari Resort described above, are indoor and available all year-round. There are also a lot of additional options that draw people to Wisconsin Dells even in the colder months.

Christmas Mountain Village is a popular ski resort located in the area. It offers skiing, snowboarding and tubing offerings for visitors. In addition, there are many exciting options such as Arcades, Axe Throwing and local breweries that are popular options as well.

Full Guide of Wisconsin Dells Winter Attractions from WisDells.com!

Wisconsin Dells = Ghost Town?

Considering that Wisconsin Dells is typically filled with visitors year-round, its hard to call it a “Ghost Town,” even in the winter months. Unless that is you are talking about actual ghosts (or ghouls, perhaps). Then, it might be accurate. There are multiple ghost-themed attractions in Wisconsin Dells, and many believe spooky spirits also inhabit this area.

One of the top-rated ghost tours in the area is the Dells Ghost Boat. Tourists can embark on a chilling journey through the Wisconsin River and into the haunted canyons of the Dells. This eerie tour is perfect for those seeking a spine-tingling adventure, as you’ll hear tales of lost spirits and ghostly apparitions that haunt the wild places of the Dells.

For a more family-friendly experience, check out the Haunted History Tour by Wisconsin Dells Trolley. This 1.5-hour tour takes you through the haunted streets of the Dells. You’ll learn about the rich history and dark secrets of the area. With a knowledgeable guide and plenty of spooky stories, this tour is perfect for visitors of all ages.

Short Term Rentals vs. Hotels in Wisconsin Dells

With temperatures generally averaging in the low seventies throughout the summer months, the Wisconsin Dells is typically packed with vacationers heading to these river activities and filling up vacation rentals consistently in the area. Many of these options are “family-friendly.” The best months to go are in the summer when kids are out of school, attracting family groups. Short Term Rentals (Airbnb and VRBO) options are typically preferred over cramped hotel rooms for these types of visitors. This is a major reason why full-house rentals are often preferred by visitors to The Dells.

STR Rules and Regulations in Wisconsin Dells

For STR investors looking at a new market, the first question that comes to mind is typically some variation of “Are Airbnbs allowed here?”

What is the STR (Short Term Rental) Law in Wisconsin Dells?

Luckily, Wisconsin Dells is in a state that allows short term rentals (AirBNB or VRBO) with clear rules and regulations. Its located in the state of Wisconsin, which in 2017 established a vacation rental law (Wisconsin “Right to Rent” Law) that applies to the entire state, with no option for local differences. Wisconsin Dells permits Short Term Rentals with clear direction. This clarity and certainty is always great for vacation rental investors.

Do You Need a License for a Short Term Rental in Wisconsin Dells?

Yes, for an short term rental in the state of Wisconsin, investors must obtain a lodging license and follow applicable state law. The state of Wisconsin’s website has published clear Guides for Wisconsin Short Term Rental Investors and a valuable one-page resource flow chart as well.

Investing in Short Term Rentals in Wisconsin Dells

When it comes to real estate investing, the numbers and data are always important! Investing in and operating a STR in Wisconsin Dells is a whole different ballgame than enjoying a vacation there! As every successful short term rental investor knows – underwriting and running the numbers on an investment is key to success.

Two of the most important aspects of evaluating vacation rental investment is understanding and projecting revenue (income) and expenses. The majority of an investor’s expenses is often the cost of financing the STR. Below, we’ll provide insights on how to think through each to be a short term rental investing pro!

Revenue Projections

One of the exciting developments in the STR investing space has been the explosive growth of accessible data for investors. AirDNA in particular has emerged as a top data source for short term rental investors looking to run the numbers on potential vacation rental investment opportunities.

Key Metrics for every short term rental investor in evaluating revenue (earnings) from STRs include:

Occupancy Rate:

The percentage of days per year the STR will have guests (generally assuming market rates are charged)

Average Daily Rate:

The average price of a days’ stay at the property

RevPAR (Revenue per Available Room):

A common metric for hotels. RevPAR is calculated by multiplying occupancy rate and ADR to get a total expected earnings over a year (per room).

Utilizing these metrics are key to evaluate the revenue potential of short term rentals. Considering its #19 spot on AirDNA’s Top 25 Markets for 2024 List, its no surprise that Wisconsin Dells rates highly across the board on STR metrics via AirDNA. It’s overall 2024 List includes an average daily rate of $412 and average expected revenue of $41,000. While these numbers alone aren’t spectacular, average property values being just $241,000 makes this an attractive market for investors. In context of the affordability for purchasing vacation rental properties, those are very strong returns for an affordable investment price!

As of February 2024, AirDNA gives the following metrics for the Wisconsin Dells Short Term Rentals Market:

Investability: 100– AirDNA’s top proprietary metric. It compares the cost of properties in the market with expected returns. Wisconsin Dells gets a perfect score of 100 due to the oversized revenue expectations compared to the low cost of properties as described above. Wisconsin Dells appears to be one of the best value markets for 2024 short term rental investors!

Occupancy Rate: 58% – while this is generally a bit higher than average, it reflects the seasonality of the market. Winter months such as January and February can be challenging to book stays. However, with all of the winter attractions as previously discussed in this guide, it’s less seasonal than many investors think!

Average Daily Rate: $331 – per AirDNA, this metric has increased 5% in the past year as of February 24, 2024. This is quite higher than what would typically be expected for a market with affordable property prices.

A well-located market near many population centers in the Midwest, Wisconsin Dells offers drivable options for families and visitors throughout the region. Located near many large metropolises such as Milwaukee, Wisconsin and Chicago, Illinois, Wisconsin Dells should perform as a resilient market even in a potential recession, as it can attract renters of all budgets.

Expense Projections

The largest and most consequential expense for many STR investors is the financing cost. This is typically the monthly payment of principal and interest to the lender financing the property. Many investors in vacation rentals cover the vast majority of the investment with a loan. The down payment on these loans is only around 20-30%. Thus, it’s very important to get the best rates and terms on financing your STR to make sure the returns are worthwhile.

When financing a short term rental in Wisconsin Dells, there are several options. These can include loans from traditional lenders, such as banks, credit unions and “conventional” (i.e. Fannie Mae / Freddie Mac) lenders. However, counting on traditional loans can be a big mistake for STR investors. Short term rentals are still a new and rapidly changing asset class. Lenders that are flexible around STRs can be very valuable. Utilizing a lender that understands and embraces short term rentals is often key.

Unlike most lenders who offer loans on short term rentals, Easy Street Capital embraces the unique aspects of STR investing. Options to qualify based on projected short term rental revenue, from cutting-edge data sources such as AirDNA – can make or break success in STR. For more information, FAQs and free projected numbers for any potential STR address in Wisconsin, check out our short term rental lending program resource page here!

In addition to making sure your lender understands and qualifies the loan based short term rental realities. Utilization of advanced strategies to get the best rates and terms can be key to minimizing your monthly expenses.

Invest in Wisconsin Dells Today!

Have your eye on purchasing a short term rental investment property in Wisconsin Dells? Easy Street Capital is America’s best lender for short term rentals – see options below to explore financing options!

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Disclaimer: The information provided in this article is not intended as financial or legal advice of any kind. Regulations regarding short-term rentals are subject to change and all investments are subject to risk. Information included in this article may contain information that has not been verified by licensed attorneys and should be subject to independent verification. Readers are advised to consult with qualified legal or financial professionals prior to investing in real estate investment properties.

Robin Simon

Partner at Easy Street Capital

Mr. Simon is a Partner of Easy Street Capital, overseeing the EasyRent division, which provides long-term financing on business-purpose 1-10 unit residential mortgage loans. He is responsible for managing all aspects of the EasyRent line, including the marketing, business development, operations and secondary/capital markets.