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Chicago Short Term Rental Regulations

Chicago Short Term Rental Services, Regulations, and Profitability

Chicago STR Regulations: Welcome

Chicago STR Overview

Chicago is the third largest city in the US and one of the top destinations for travelers. They are not only one of the biggest cities, but also host some of the biggest events such as Lollapalooza and the Chicago Pride parade, which draw in even larger crowds. Because of it's size, the profitability of any potential STR investment can vary dramatically from one neighborhood to the next. However, there is still plenty of opportunity. Also, Chicago has began to enforce new regulations to combat short-term rentals in the past few years. More on those regulations below.

Chicago STR Regulations: Text

Chicago Airbnb Profitability

As of July 2022


Occupancy Rate

In the middle of the summer Chicago is one of the best places to be. With warm weather and plenty of festivals, just about all of the short term rentals are occupied throughout the summer with occupancy rates peaking above 80% in July. However, Chicago also has brutally cold winters. While Chicago occupancy rates climb above 80% in the summer, they also drop below 40% in the winter. So it's a very seasonal location, with most of the revenue coming in the warm months of the year.


Average Daily Rate

With an average daily rate of $192, Chicago falls below most other major cities in regards to revenue potential. However, the average daily rate doesn't tell the whole story. Chicago is so large that it has a ton of small suburbs that bring that rate down, so it's all about finding the right location. Also, the extreme seasonality causes a significant drop. However, in the right location you can not only ensure you maintain a high occupancy rate throughout the year, but you can also capture a much higher daily rate.


Median Property Price

Because of Chicago's size, the median property price can vary dramatically throughout the city. However, as an average $370,000 is fairly affordable compared to other major cities. As you get closer to the downtown area the property prices will more than double - as will the potential revenue of a short term rental. With Chicago, there is plenty of profitable short term rental properties available, you just need to make sure you are looking in the right spots.

Chicago will always be a popular destination. If you get a good property at the right price you'll be in good shape for a long time. However, Chicago is also starting to crack down on short-term rentals with more regulations. Understanding these regulations are critical to ensuring your property can be legally listed as an STR.

Chicago STR Regulations: Infographics

Chicago STR Regulations

Chicago started implementing regulations on short-term rentals back in 2016, but they are still a work in progress. To this day we continue to see updates, but most of them have to do with taxation policies rather than the legality of STR's. Regardless, before you invest it's important to understand all of the components to ensure your new property is compliant (and profitable!)

Ban on Single-Night Stays

As an effort to eliminate some of the larger party houses, Chicago started enforcing a ban on single-night stays. However, in our opinion this does not change the profitability potential too much for any STR investor. Eliminating parties is often a benefit to the owner.


Chicago requires all short-term rentals to be property licensed, which come at a cost. Also, depending on the exact location and size of the building they often require the owner list the property as their "primary residence" to get a license.  

  • A "primary residence" means the owner lives at the property on a daily basis at least 245 days in the applicable calendar year

  • License application fee: $250 per location based on a two year term.

  • Annual license fees of $500 or more in addition to the application fee. 

Location Specific Restrictions

Many areas throughout the city prohibit short term rentals, you need to make sure to research any individual location to ensure this is not the case. If there is a homeowners association or board of directors that restricts short-term rental listings, that will also prohibit your ability to get a permit from the city. Additionally, various zones throughout the city are implementing new laws which also restrict vacation rental licenses from being acquired.

Many of the wards throughout the city are working on petitions to limit new home-sharing rentals. This includes but is not limited to all or part of the 13th Ward, 11th Ward, 23rd Ward, and more.

Hotel Accommodation Tax

Chicago has fairly aggressive tax structures in place for short-term rentals at 10.5% of the gross rental or leasing charge. STR's are being taxed the same way as hotels, subject to the Hotel Accommodations Tax in Section 3-24 of their Municipal Code. However, this tax is reduced if the home is considered to be the owners personal residence.

- Click here for more information on the tax structure

All of the Chicago STR regulations apply to all potential short-term rental properties within the city limits. If you would like to view all of the various Chicago STR regulations through the government website, click here.

If you are looking at homes outside of the greater Chicago metropolitan area, the regulations may differ. Reach out to us and we would be happy to discuss the regulations that might impact any potential investment you are looking at in any other neighborhood, city, or State.

Chicago STR Regulations: List

STR Services We Offer In Chicago

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Chicago Listing Optimization and Automation Services

Managing a short term rental in Chicago doesn't need to be time consuming or expensive. We can help you create a listing optimized to convert while also automating the process from start to finish utilizing the same software as high end property management companies. We can also align you with Chicago vacation rental turnaround specialists, professional real estate photographers, copywriting professionals, and more...

Chicago Airbnb Turnover and Cleaning Services

One of the most important tasks for any STR is making sure the home is cleaned and ready for the next guest. With guests often checking out and checking in on the same day, finding a reliable turnkey turnover crew in Chicago can be a difficult process. Tasks like washing linens, replacing coffee, taking out trash, setting thermostats, doing dishes - these are all well within the scope of work of our providers.

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Find Profitable Chicago Vacation Homes and Airbnb Investments

Let us help you navigate local regulations and find your next profitable Airbnb investment in Chicago. We use data to analyze the revenue, occupancy, nightly rate, and estimated home value to determine the areas and homes that will generate the highest ROI for an investor. We also take the time to study and understand Chicago STR regulations in that area to ensure a smooth and easy permitting process once the home is purchased.

Chicago Regulation and Permitting Compliance

Illegal short term rental's are not only detrimental to Chicago and the local community, but it also decreases the occupancy and profitability of the legally permitted properties throughout Chicago. And it's a problem that's growing everyday. We have a customized and automated solution to combat this problem and work with local governments to product weekly and/or monthly city-wide compliance reports that can quickly locate non-permitted and illegal listings.

Chicago STR Regulations: Projects

More About Our Team and Our STR Success

Everyone on the Simplify STR team owns and manages their own portfolio of Short Term Rental Properties, so we have a deep understanding of what it takes to achieve success in the marketplace. Our team consists of licensed real estate agents, account managers, and software engineers, and more - all with a passion for short term rentals. We help our customers improve their listings, find profitable properties, and automate processes to ensure they are maximizing profitability. 

We also help cities on the regulatory side. While most property owners in Chicago are legally permitting and managing their properties, there are countless illegal Airbnb's and short term rental's flooding the marketplace. In addition to helping homeowners find profitable properties and optimize their current listings, we are committed to solving this issue of non-compliance in coordination with local governments. Illegal Airbnb's only hurt the local community and other properly permitted homes, by assisting with the compliance process we aim to protect the investment opportunity STR's provide and we have the perfect team to tackle this issue.

Chicago STR Regulations Team
Chicago STR Regulations: About
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