Short-Term Rentals in Lake of the Woods County, Minnesota

No county rental license -- but a Rural Residential property still needs an Interim Use Permit

Unlike many Minnesota lakes counties that have adopted dedicated short-term rental licensing ordinances in the last several years, Lake of the Woods County itself has not: there is no county-level rental license, no per-unit registration fee, no occupancy formula tied to septic capacity, and no cap on how many short-term rentals can operate in a given area. Third-party market analysis of Minnesota vacation-rental regulation describes the county as among the least-regulated in the state on this specific question. That does not mean a short-term rental is exempt from zoning altogether, though: for a property in the county's Rural Residential (R2) Zoning District, Section 1106 of the Lake of the Woods County Zoning Ordinance requires the operator to obtain an Interim Use Permit (IUP) before operating a short-term vacation rental -- a real, case-by-case permit application through the same Land & Water Planning Office that handles the county's zoning, septic, and shoreland review described on the county hub.

An actual approved IUP for a short-term vacation rental in the county shows the kind of conditions the county attaches: the permit terminates five years from approval or upon sale or transfer of the property, whichever happens first (meaning a new owner generally has to reapply rather than simply inheriting the seller's permit); maximum occupancy is capped at four individuals; quiet hours run from 10:00 p.m. to 8:00 a.m.; a valid septic system Certificate of Compliance is required as a condition of the permit; and on-street parking is prohibited. A buyer evaluating a specific Rural Residential parcel for short-term rental use should treat these as the baseline expectations for a new application, while confirming the current version of Section 1106 and any conditions specific to the parcel directly with Land & Water Planning -- and should specifically ask whether an existing IUP on a property being purchased actually transfers, since the five-year/sale-termination structure above suggests it may not.

A five-unit resort license threshold, and a separate city ordinance inside Baudette

Two other triggers matter beyond the county's own IUP process. First, Minnesota state law requires a business that provides convenient access to a recreational area for stays of a day, a week, or longer, and that has five or more cottages, rooms, or enclosures for rent, to be licensed as a resort -- a license administered through the state's MN.gov e-License system in coordination with the Minnesota Department of Health's lodging program, separate from anything the county itself requires. This is a real, concrete number for anyone assembling several rental cabins on one property or across adjoining parcels rather than renting a single house or cabin: cross five units and you've moved from an unregulated single-unit rental into a state-licensed resort operation with associated health and safety inspection requirements.

Second, the county's light-touch approach applies to unincorporated Lake of the Woods County -- it does not extend inside the City of Baudette, the county seat and the area's largest population center. Baudette has adopted its own short-term rental ordinance establishing a municipal licensing program with its own requirements for units rented for less than 30 consecutive days. A property inside Baudette's city limits is governed by that city ordinance, not by the county's Section 1106 IUP process or the county's general absence of a rental license -- confirm directly with the City of Baudette, not the county, for any parcel actually within city limits.

What this means for your purchase

1. Confirm the zoning district for a specific parcel with Land & Water Planning before assuming a short-term rental is either fully permit-free or automatically approvable -- the Rural Residential district's Section 1106 Interim Use Permit requirement is the one confirmed county-level trigger.
2. If buying a property that's already operating as a short-term rental, ask specifically whether an existing Interim Use Permit transfers with the sale -- the sample terms above suggest permits can terminate on transfer, which would mean applying fresh rather than assuming continuity of income the day you close.
3. If your plan involves several rental cabins on one property (or a small resort-style operation), check the five-unit threshold against Minnesota's resort licensing law and MDH lodging requirements before assuming county silence means no state-level obligation applies.
4. If the parcel is inside Baudette city limits, contact the city directly for its own short-term rental ordinance -- the county's more permissive framework described here does not apply there.