Sioux Falls is not a resort town, but it has a steady stream of visitors that many investors overlook: patients and traveling staff at two large health systems, families at college and youth sports events, and crowds for tournaments and concerts downtown.
In short: LendingStreet finances Sioux Falls short-term and furnished mid-term rentals with DSCR loans that can qualify on projected short-term revenue on some programs. Loans start at $150,000 with no stated maximum, purchases go up to 80% LTV, the minimum credit score is 620 and LLC borrowers are standard. The city regulates short-term rentals through its zoning and licensing rules, so confirm that a non-owner-occupied rental is allowed at the address before you buy.
Sioux Falls regulates short-term rentals through its zoning ordinance and related licensing. Whether an investor-owned home can be rented by the night, and whether it needs a permit, a conditional use approval or a license, depends on the zoning district and on whether the owner lives on site. Rules have been revisited over the years, so check with the city's planning and development office for the specific address.
Suburbs such as Brandon, Harrisburg, Tea and Hartford set their own rules, and many newer subdivisions across the metro have HOA covenants that ban rentals under 30 days. Read the covenants before you make an offer.
Because nightly rules can be restrictive in some districts, many Sioux Falls operators focus on furnished stays of 30 days or longer, which are often treated as ordinary residential leases.
Sanford Health and Avera McKennan both run large medical campuses in Sioux Falls, and they draw patients' families from across the region plus traveling nurses and other medical staff on 8 to 13 week assignments. That steady medical demand is the backbone of many furnished rentals in the city.
Events fill the calendar too: the Summit League basketball tournaments in March at the Denny Sanford Premier Center, high school and youth tournaments, concerts, Augustana University and University of Sioux Falls weekends, the Sioux Empire Fair in August and summer visitors to Falls Park. Each August, motorcycle traffic headed to the Sturgis rally also passes through on I-90.
Inside the city, furnished rentals cluster near the hospitals and downtown. Outside the city, the region's lakes draw summer visitors.
| Area | Main draw | What to check |
|---|---|---|
| Near Sanford campus (central Sioux Falls) | Medical stays, traveling staff | City zoning and licensing; 30-day option |
| Near Avera McKennan and the Cathedral area | Medical stays, walkable older homes | Zoning district; historic district rules |
| Downtown and Falls Park | Events, visitors, restaurants | Mixed-use zoning; condo rules |
| Lake Madison and Lake Herman (Madison) | Summer lake homes, about 50 miles | Lake County and city rules; septic |
| Lake Poinsett and Lake Kampeska | Summer lake cabins | County zoning; seasonal access |
Nightly stays earn more per night but come with turnover, cleaning and tighter rules. Furnished 30-day rentals to traveling medical staff earn less per night but book in longer blocks, need less management and are often allowed in places where nightly rentals are not. Many Sioux Falls operators run a mix.
For financing, a home rented on 30-day or longer stays may be underwritten on market rent or on a short-term projection depending on the program. Tell us how you plan to operate so the file is underwritten on the right income.
On some programs, the DSCR is calculated from a third-party projection of short-term rental income for the property rather than a long-term lease. The program applies its own adjustments for expenses and vacancy. If you already operate the property, booking history can support a refinance, including cash-out up to 75% LTV.
The standard minimum DSCR is 1.0x. Sioux Falls prices are moderate, so many furnished rentals clear that level at 75% LTV, as the example shows.
This example is illustrative and not a quote. An investor buys a three-bedroom ranch in central Sioux Falls for $295,000, a short drive from the Sanford campus, after confirming that the zoning district allows the planned use. A third-party projection estimates $39,000 a year in gross revenue from a mix of nightly and monthly stays, about $3,250 a month.
At 75% LTV the loan is $221,250. Estimated principal and interest on a 30-year loan is about $1,547. Taxes are about $370 and insurance about $165, for a total near $2,082. If the program reduces projected revenue by 20% for operating costs, qualifying income is about $2,600 and the DSCR is about 1.25x.
| Item | Amount |
|---|---|
| Purchase price | $295,000 |
| Loan at 75% LTV | $221,250 |
| Estimated principal and interest | $1,547 |
| Taxes and insurance | $535 |
| Total monthly payment | $2,082 |
| Projected gross revenue per month | $3,250 |
| Qualifying income after 20% reduction | $2,600 |
| DSCR | About 1.25x |
South Dakota has no state income tax, but lodging is subject to state and municipal sales tax, and tourism taxes apply to short-term stays. Booking platforms collect some of these taxes, but confirm what you must file yourself with the South Dakota Department of Revenue.
Property taxes matter more than many investors expect. South Dakota taxes owner-occupied homes at a lower level than other residential property, so an investor's bill after purchase can be higher than the seller's. Budget on the non-owner-occupied figure for Minnehaha or Lincoln County.
Sioux Falls sees hailstorms in spring and summer and hard winters with blizzards and deep cold. Insurers price for both, and many policies carry separate wind and hail deductibles. Ask about roof age and coverage for frozen pipes, and make sure the policy is written for short-term rental use, not a standard homeowner policy.
Plan for snow removal, a local cleaner and someone who can respond quickly when a guest has a problem in January.
Send the address, price, zoning and HOA status, any revenue projection or booking history and your target loan amount. For other South Dakota markets, including the Black Hills, see our South Dakota short-term rental loan page.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address or property list, the price or value, the rents and your target leverage through the form below, or call (877) 298-1001, and the financing team will run the numbers and come back with options.
It depends on the zoning district and owner occupancy. Some districts require a permit or conditional use approval for non-owner-occupied rentals. Check with the city for the specific address.
Stays of 30 days or longer are often treated as ordinary residential leases, but confirm with the city. Many Sioux Falls investors rent to traveling medical staff on monthly terms.
Patients' families and traveling staff at Sanford and Avera, sports and event visitors, college families and summer tourists.
On some programs, yes. A third-party projection can be used in place of a long-term lease, adjusted by the program for expenses.
South Dakota taxes owner-occupied homes at a lower level than other residential property. An investor will not get that lower classification.
Yes, if county rules and any community covenants allow short-term rentals. Seasonal access, wells and septic are part of the review.
Yes. Rapid City, Keystone, Hill City and other Black Hills towns have their own rules; see our South Dakota STR page.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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