Start with the boring version of the math: take the income you think the property will earn in the ten days around the Sturgis Motorcycle Rally, set it aside, and see whether the rest of the year covers the mortgage, taxes, insurance, utilities, cleaning and management. If it does, Rally income is upside. If it doesn't, you are betting a year of carrying costs on one week in August, and August weather, road work, and rally attendance all move around. That is the first thing we run through with buyers looking at short-term rental property in Sturgis, Spearfish, Deadwood or the countryside in between.
What fills the calendar the other fifty-one weeks
The northern Black Hills has more than one season, which is why some of these properties work. Summer brings park traffic — Mount Rushmore, Devils Tower, Spearfish Canyon and Bear Butte State Park all pull cars through Lawrence and Meade counties from June into September. Belle Fourche fills up for the Black Hills Roundup around the Fourth of July. Deadwood draws gaming and event visitors most of the year. Winter brings skiers and snowboarders to Terry Peak and Deer Mountain, and a place with easy access off Highway 85 rents differently in January than one at the end of a steep gravel road. Spearfish also has steady demand from Black Hills State University visitors, travel nurses and contract workers. Look at what your specific address is close to, not at a regional average.
What the rules actually allow at that address
Before you write an offer, find out whether nightly rental is permitted where the property sits. The answer depends on whether you are inside Sturgis, Spearfish or Belle Fourche city limits or out in unincorporated Meade, Lawrence or Butte County, and it can also depend on the zoning district and on subdivision covenants that have nothing to do with the county. Some places require a license, an inspection, occupancy limits or off-street parking. Lodging stays are also subject to state sales tax and, inside city limits, municipal gross receipts tax, so registering with the Department of Revenue is part of the setup. We ask these questions during the inspection period rather than after closing.
The costs people forget
Furnishing and stocking a house is real money before the first booking. Then there is cleaning turnover at Rally pace, higher insurance for short-term use, snow removal, and lawn care. Rural acreage adds well and septic maintenance — a septic system sized for a family of four gets tested by a full house of guests. If the property is off a county road, ask who plows and grades it. Wear and tear runs faster than on a long-term rental, and replacement furniture and appliances belong in the budget every few years, not once.
How we look at a specific property
We are a local brokerage at 232 Washington St. in Spearfish, and most of what we do is here — Spearfish SD homes for sale, Belle Fourche SD real estate, Black Hills farm and ranch listings, and acreage for sale in Butte and Lawrence counties. When someone is weighing an investment purchase, we pull comparable sales, look at what similar properties nearby are actually booking, and put the carrying costs on paper alongside them. Sometimes the honest answer is that a long-term tenant or a straightforward primary residence pencils out better, and sometimes a commercial property in downtown Spearfish or Belle Fourche is the stronger buy. We would rather tell you that before you close.
If you are shopping from out of state and want a northern Black Hills realtor to walk a property with you and run the numbers, call Real Estate Advantage in Spearfish. Ron Keil and the team can tell you which addresses tend to rent in February, not just in August.