Short-term rentals (STRs) are allowed in McGregor, Iowa. The evidence of nearly fifty active listings on a major STR platform demonstrates a functioning market, indicating that the city does not presently prohibit STR activity as a matter of city ordinance in the provided materials. Investors may operate STRs in McGregor subject to standard zoning for the property type, general housing and nuisance regulations, state lodging taxes, and any future local actions (e.g., a potential bed-and-breakfast license if you serve breakfast to guests and meet the B&B definition). In short, STRs are permissible today, with compliance obligations primarily derived from Iowa state law and county administration.

How to Start a Short-Term Rental Business in McGregor

• Confirm zoning and use. Check with McGregor City Hall to ensure the property’s current zoning permits transient lodging of the intended scope. If offering more than five guest rooms or serving breakfast as a B&B, you may require a state lodging license and/or a local B&B permit.
• Register for and collect Iowa hotel/motel tax. STRs meeting the definition of “lodging” must register with the Iowa Department of Revenue (IDR) and collect/remit state (and applicable local) lodging taxes.
• Obtain business credentials. Apply for a state tax permit (if not already obtained) and a federal EIN if operating under a business entity.
• Establish a reservation channel and compliance workflow. Use a platform (e.g., VRBO) and configure tax collection, guest screening, house rules, cancellation policies, and occupancy limits consistent with your zoning and safety standards.
• Ensure property readiness. Align with the property’s occupancy limits, parking, and general safety practices. While the Iowa City model rules (e.g., rental caps) are not directly applicable to McGregor, they signal that communities can regulate occupancy and nuisance; operate conservatively to avoid complaints.
• Prepare for tax remittance and reporting. Set aside lodgings tax receipts monthly/quarterly and maintain documentation for IDR and county treasurer correspondence.

Required Documents, Permits, Licenses, and Guidelines

• Hotel/Motel Tax Registration (Iowa Department of Revenue).
  • Requirement: Register, collect, and remit state (5%) and any local lodging taxes on gross receipts from lodging of less than 31 consecutive days.
  • Compliance: File returns per IDR cadence; maintain records of gross receipts, taxes collected, and remittances.
• Zoning Confirmation (McGregor City Hall).
  • Requirement: Verify that transient lodging is an authorized use for the property’s zoning classification and that any occupancy, parking, or structural constraints are met.
• Bed & Breakfast Registration (Iowa Department of Inspections, Appeals, and Licensing).
  • If applicable: B&Bs must register and undergo state lodging inspections. Verify whether your operation meets the B&B definition (owner-occupied, ≤ five guest rooms, breakfast served). If serving food, food service licensure may also be required through the Iowa Department of Inspections, Appeals, and Licensing (food).
• Business Credentials.
  • State tax permit (Iowa), federal EIN if using an entity, and any required local business licenses/registrations (as directed by McGregor City Hall).
• Nuisance and Property Maintenance.
  • Observe local ordinances for noise, trash, yard maintenance, and occupancy-related nuisance. McGregor is in Clayton County; county contacts can be used for enforcement referrals.

Specific Regulations for Short-Term Rentals (City, County, State)

• City of McGregor.
  • No explicit STR licensing, caps, or registration requirements appear in the provided materials. Operate under your zoning and general ordinances (noise, parking, trash, property maintenance). If offering a B&B or hospitality services (e.g., breakfast), confirm whether a local B&B permit is required.
• Clayton County.
  • The county resource guide confirms administrative contacts but does not list a standalone STR program. Use county social services for any guest-related support concerns and rely on county health, safety, and nuisance enforcement for non-compliance.
• State of Iowa (Iowa Code).
  • Hotel/Motel Tax (Iowa Code Chapter 98A).
    • Scope: Applies to gross receipts from lodging of fewer than 31 consecutive days; includes lodging providers akin to hotels/motels and B&Bs.
    • Rate: State tax is 5% on gross receipts; local lodging taxes may also apply.
    • Administration: File and remit via Iowa Department of Revenue; you must register before collecting.
  • Bed & Breakfast (Iowa Code Chapter 137C).
    • Scope: Establishments offering lodging with ≤ five guest rooms and serving breakfast must register with DIAL and are subject to inspection/licensure.
  • Residential Landlord and Tenant Act (Iowa Code Chapter 562A).
    • Scope: Governs standard residential tenancies (typically 31+ days). While most STRs fall outside this statute, it frames general landlord-tenant and property upkeep expectations.

Note on comparative ordinances: Iowa City’s 30% rental permit cap and increased inspection regime are not applicable to McGregor. They are included to illustrate how Iowa municipalities may regulate residential rentals; McGregor’s approach, as evidenced here, is different.

Contact Information

• City of McGregor
  • City Hall: 563-873-3795
  • Address: 416 Main Street, McGregor, IA 52157
  • Website: www.cityofmcgregoriowa.com
• Clayton County Administration (for lodging tax, nuisance coordination, and services)
  • County Website: www.claytoncountyia.gov
  • General Assistance and Veterans Affairs (housing support and resources): 563-245-1865; address: Suite 6, 600 Gunder Rd NE, Elkader, IA 52043
• Iowa Department of Revenue (lodging tax registration/returns)
  • Website: tax.iowa.gov
• Iowa Department of Inspections, Appeals, and Licensing (B&B and food service licensure)
  • Website: dia.iowa.gov

Source Pages

• McGregor Area Vacation Rentals (market evidence and property types): www.vrbo.com/vacation-rentals/usa/iowa/mcgregor
• City of McGregor official website: www.cityofmcgregoriowa.com
• Clayton County website (resource directory): www.claytoncountyia.gov
• Iowa Department of Revenue (hotel/motel tax): tax.iowa.gov
• Iowa Department of Inspections, Appeals, and Licensing (B&B registration): dia.iowa.gov
• Iowa City STR ordinance (comparative context, not directly applicable to McGregor): lepickroeger.com/city-establishes-new-rental-permit-requirements/

This guide is tailored to McGregor and Clayton County based on the provided content. Where city-specific regulation is not identified, investors should rely on Iowa state lodging tax obligations and direct confirmation from McGregor City Hall on zoning and any hospitality licensing requirements.