Chicago STR Playbook: Win Big in the Windy City

NAVIGATING REGULATIONS

Single-family homes and buildings with two to four units must be the host’s primary residence and can only have one active STR rental. Larger buildings with five or more units don’t require the host to reside on-site but are restricted to either six units or one-quarter of the total units, whichever is fewer. Additionally, short-term rentals are prohibited in Restricted Residential Zones (RRZ) and in buildings listed as problematic by the city.

Mandatory annual registration costs $125 and takes approximately one to two weeks. Additionally, hosts managing multiple STR units must obtain a Shared Housing Unit Operator License (SHUOL) for $250. Each listed unit must have its own individual registration number, clearly displayed in online listings.

Operationally, there’s no annual rental limit or minimum stay requirement, though each unit is capped at six sleeping rooms. Enforcement is complaint-driven, with potential fines of up to $10,000 per day or criminal charges for non-compliance. For more specific details on a particular property, order a Revedy regulatory report. 

MARKET OVERVIEW

Understanding these trends is vital for making good investment decisions.

• Total Monthly Revenue Growth: Inflation-adjusted total monthly revenue has seen significant year-over-year increases. For instance, January revenue grew from about $5.1 million in 2022 to roughly $8.8 million in 2024 (a >70% increase). Peak summer months also show robust growth, with June revenue surging from around $19.0 million in 2022 to approximately $29.8 million by June 2024 (a >50% increase).
• Seasonality: The market is highly seasonal. Peak performance consistently occurs during summer (June, July, August), with lower revenue in winter (January, February, November, December).
• Listing Growth: The number of active STR listings has expanded considerably, rising from approximately 6,162 in January 2022 to over 10,000 by early 2025.

For investors, these trends offer key takeaways: The market is demonstrating healthy revenue growth, especially with strong year-over-year jumps between 2023 and 2024. While total revenue is expanding, it is being divided among more operators as the number of listings also grows. Success hinges on smart pricing, effective marketing tailored to both peak and off-peak seasons, and strategies to stand out.

WHAT TO BUY

With a clear picture of Chicago’s growing, seasonal, and increasingly competitive STR scene, let’s talk about what kind of property might be your best bet. We’ll break down performance data by bedroom count, looking at gross yield, MLS availability, existing STR competition, and revenue trends.

Overall Recommendation: Based on the data, 2-bedroom and 3-bedroom properties appear to offer the most balanced opportunity, with attractive gross yields, solid revenue growth, and reasonable MLS availability.

AVERAGE LISTING PERFORMANCE

Let’s zoom in on average STR listing performance in Chicago to see what individual operators can realistically expect. 

Monthly revenues highlight strong seasonality, with peak summer averages around $3,049 in July 2022, dipping slightly to between $2,700 and $2,850 in summer 2023 and 2024. Winter revenues fall significantly, from about $830 in January 2022 down to lows near $735 by January 2025. 

Notably, while the total market revenue expanded, individual listing revenues haven’t grown due to the dramatic increase in active listings. These insights highlight that success in Chicago increasingly depends on standing out, strategic pricing, and delivering an exceptional guest experience.

AMENITY ANALYSIS

Data shows that EV chargers consistently deliver significant revenue boosts, increasing monthly revenue by up to 128%, with low market saturation (~4%) indicating high demand. 

Golf access, though niche and very rare (<1%), also drives substantial increases (up to 186%), making it ideal for properties that can cater to this market. And pool tables provide consistent value, appealing especially to groups and families, with regular positive impacts and low saturation (just over 3%). 

Pools offer strong seasonal returns in warmer months but lose value as temperatures drop. 

Surprisingly, popular amenities like hot tubs and basketball courts consistently show significant negative impacts on revenue. Overall, modern amenities and specialized recreational features outperform the more traditional choices.

CONCLUSION: Charting Your Course in Chicago’s STR Market

We’ve covered the critical need to understand owner-occupancy regulations and dived into market trends that reveal a growing, seasonal, and increasingly competitive landscape.

We highlighted that 2- and 3-bedroom units represent a sweet spot for balancing yield and accessibility. Additionally, the average listing’s performance is feeling the pressure of more competition, making strategic differentiation essential. Our amenity analysis uncovered some surprises: EV chargers show strong year-round potential, while the data suggests caution with additions like hot tubs, which showed a statistically significant negative correlation with revenue.

Looking ahead, Chicago’s STR market offers plenty of opportunities, but success demands smart, adaptable strategies. Keep a close watch on regulatory shifts, listing inventory, and evolving traveler preferences. The city’s robust tourism will continue to drive demand, but thriving will depend on exceptional guest experiences and a keen understanding of local dynamics.

Want expert guidance? If you’re serious about STR investing, consider booking an appointment with a Revedy professional short-term rental advisor. Let’s unlock the potential of Chicago, one successful STR at a time.