Spearfish Short‑Term Rentals: What Buyers Should Know

Thinking about buying a home in Spearfish to use as a short‑term rental? You’re not alone. With access to Spearfish Canyon, Black Hills adventures, and steady university and event traffic, the area draws visitors year‑round. In this guide, you’ll learn the current rules, realistic revenue benchmarks, taxes to plan for, and a smart due‑diligence checklist so you can buy with confidence. Let’s dive in.

Why Spearfish draws bookings

Spearfish sits at the gateway to the Black Hills, with outdoor recreation and scenic drives that fuel strong summer demand. Local events and university activities add steady spikes throughout the year. To understand what guests search for, start with the area’s destination marketing and event calendar from Visit Spearfish. University dates can also boost bookings, so keep an eye on Black Hills State University news and events.

Current rules to know

The City of Spearfish reports it does not currently regulate short‑term rentals, but a task force has been working on recommendations. That means new rules could arrive, affecting permits, inspections, occupancy, and where STRs are allowed. Always verify the latest meeting agendas and updates on the city’s Short‑Term Rental Policy page before you buy.

If your property sits outside city limits, county zoning applies. Review Lawrence County’s land‑use code and confirm permitted uses for your parcel with the county planning office. You can start with the Lawrence County land‑use code and then call to confirm specifics.

What could change

Cities often consider measures like registration or licensing, safety inspections, occupancy caps, parking standards, and 24/7 local contact requirements. Spearfish’s final approach and timeline are not set as of this writing, so plan for possible adjustments. Bottom line: build flexibility into your pro forma in case permits, fees, or operating limits are adopted.

Taxes you must plan for

Short‑term stays in South Dakota generally trigger several taxes:

• South Dakota state sales tax: 4.2% (rate per the Department of Revenue). See the DOR’s Sales & Use Tax page.
• South Dakota tourism tax: 1.5%. See the DOR’s Tourism Tax page.
• City of Spearfish taxes: 2% city sales tax plus a 1% municipal hospitality (gross‑receipts) tax on lodging under 28 days. Confirm details on the city’s Sales & Hospitality Tax page.

Together, that is roughly 8.7% on the lodging charge, before any other assessments. Some booking platforms may collect and remit certain taxes for you as marketplace facilitators, but this varies by jurisdiction and tax type. Confirm who remits which taxes with the DOR pages above and the city finance office, and register if required.

A quick tax example

Assume 52% occupancy, a $275 average daily rate, and 190 booked nights. Gross rent would be about $52,250. At approximately 8.7%, lodging taxes would total about $4,545.75. You still need to budget for other costs like cleaning, utilities, supplies, management, and insurance.

What the numbers look like

Public snapshots from STR analytics tools indicate Spearfish runs with occupancy in the low‑to‑mid 50% range and ADRs in the low‑to‑mid $200s to $300s. Use these only as starting points and run address‑level projections for your specific home. You can view a market overview and then drill into comparables with AirDNA’s Spearfish summary.

Because seasonality is pronounced, model several scenarios. For example, test a summer‑heavy plan with higher ADRs and a conservative shoulder‑season plan with softer rates. Stress‑test for lower occupancy or ADR so you understand your breakeven.

HOAs, CC&Rs, and minimum stays

Many subdivisions and condo communities limit or prohibit short‑term rentals, or they require minimum stays or owner registration. Always request the recorded covenants, bylaws, and amendments during your offer period. Get the HOA’s position in writing and confirm whether any current rules are being enforced.

Insurance and safety

Standard homeowners policies often exclude short‑term rental activity. Ask carriers for an STR‑specific policy or endorsement, and consider umbrella liability coverage. Platform protections are not a replacement for real insurance. For a plain‑English overview of typical gaps, review this host insurance primer. Even if inspections are not yet required, maintain working smoke and CO detectors, fire extinguishers, and clear egress, and post clear house rules.

Management choices and costs

Decide whether you will self‑manage or hire a local full‑service manager. Fees, dynamic pricing tools, cleaning capacity, and 24/7 guest support all influence your net. Ask for references and example P&Ls from similar nearby properties. If you self‑manage, line up reliable cleaners and maintenance before your first guest.

Community considerations and risks

Regulatory changes are the biggest near‑term risk in Spearfish, given the city’s active review process. Neighborhood friction from parking, noise, or parties can also lead to complaints and tighter rules. A good‑neighbor policy and fast local response reduce issues. For context on how rules vary across South Dakota communities, see this regional overview from KELOLAND.

Your Spearfish due‑diligence checklist

Use this sequence before you write an offer on an STR‑intended property:

Step 1: Verify local rules

• Check the city’s latest notices and meetings on the Short‑Term Rental Policy page.
• If outside city limits, confirm allowed uses with Lawrence County planning. Start with the county land‑use code.

Step 2: Confirm HOA and property fit

• Obtain recorded CC&Rs, bylaws, and amendments.
• Ask the HOA for written guidance on STRs and any minimum‑stay or registration rules.

Step 3: Run the numbers

• Pull an address‑level STR report with comparable entire‑home listings via AirDNA’s overview.
• Model ADR, occupancy, seasonality, cleaning turns, and a reserve for repairs.

Step 4: Map your tax process

• Verify which taxes apply and who remits them on the DOR’s Sales & Use and Tourism Tax pages.
• Confirm city filing steps with the Spearfish finance page and register if needed.

Step 5: Price insurance and management

• Get quotes for STR‑specific insurance and optional umbrella coverage.
• Interview local managers or, if self‑managing, contract cleaning and on‑call maintenance.

Step 6: Gather seller disclosures

• Request past occupancy and revenue reports, booking exports, and expense summaries.
• Confirm utilities, parking, and any prior permits or approvals.

Ready to explore Spearfish options?

If you want a property that works for both your lifestyle and investment goals, local nuance matters. I’ll help you verify zoning, spot HOA pitfalls, and run realistic numbers before you write an offer. Reach out to Brittany Sudbeck for calm, clear guidance and a tailored plan for your Spearfish short‑term rental search.

FAQs

What are the current short‑term rental rules in Spearfish?

• The city reported no adopted STR ordinance while a task force developed recommendations; check the latest updates on the city’s Short‑Term Rental Policy page before you buy.

Which taxes apply to Spearfish short stays?

• Expect South Dakota state sales tax (4.2%), the state tourism tax (1.5%), plus Spearfish’s 2% city sales tax and 1% hospitality tax; confirm details with the DOR’s Sales & Use and Tourism Tax pages and the city finance office.

Is Spearfish a profitable market for STRs?

• Public analytics snapshots show mid‑range occupancy and ADR with strong summer seasonality; use AirDNA’s overview as a starting point, then run address‑level comps for a realistic forecast.

Do I need HOA approval to run a vacation rental?

• Many communities restrict STRs or require registration or minimum stays; read the recorded CC&Rs and get the HOA’s position in writing before you commit.

Who remits the lodging taxes, me or the platform?

• Some platforms collect and remit certain taxes, but coverage varies; verify responsibilities on the DOR pages and with the city finance office, and register if required.