JANESVILLE For visitors looking to stay in downtown Janesville, lodging options are limited to one hotel. But there is an emerging second option: A handful of short-term rentals tied to downtown storefronts for visitors who want to stay within walking distance of downtown businesses, restaurants and attractions.
Local property owners have begun using some of the upper units in downtown buildings as short-term rentals, giving visitors an opportunity to stay in the heart of the city while adding another lodging option to an area with limited accommodations.
Kari Drascic, who owns The Guest House at 19 N. Main St. above Reverie Dry Goods, said she had wanted to get into the real estate business for about a decade.
When the previous owner of the apartment, Brady Schultz, told her he was selling the space, she saw an opportunity to pursue that interest. She officially took over the space in May.
Ive never been afraid to try something new, she said. I just love the excitement of downtown and building that back up.
Drascic said she was an art major and previously worked in retail. She now works in finance and said the short-term rental combines several of her interests.
Another reason she was drawn to the space: curiosity about what the upper floors of downtown buildings look like.
Wouldnt you love to tour and see what those spaces look like? she said. Its just like a curious place, a great location around all of the restaurants and walking areas.
Drascic described the apartment as a place where visitors can get away while still being immersed in downtown. The historic building had already been renovated by Schultz, including a new bathroom, kitchenette and appliances, as well as additional walls.
Drascic said she has since accented the space with some of her own style.
It has the exposed brick which I love because it shows the flaws and character of the building, she said It has sort of an industrial or boutique style and we placed some photos of historical art of the buildings from downtown Janesville around the space.
Drascic said June and July were relatively busy months for the rental, although bookings have slowed since then. Guests have included wedding parties and traveling hospital staff.
This feels almost like a high-end city apartment, Drascic said. Its like getting away. Its in a small downtown, and you can walk up there and you can look out, and your view is like the Looking Glass and Draft House.
She said one recent couple from Illinois stayed at the apartment while attending an event in Edgerton. Afterward, they returned to Janesville and spent the rest of the weekend exploring the city. Drascic said they told her they enjoyed getting to know the downtown.
You could get that in some sense at a hotel, she said. But its personal because I live here. This is my home as well, so I get the benefit of showing somebody Janesvilles best.
Shelly Henschler, owner of Reverie Dry Goods, said having the rental above her store is beneficial for the business. Visitors staying at the apartment have to pass through the store to reach the rental. It gives them a natural, almost unavoidable opportunity to browse while coming and going.
Henschler said Drascic also communicates with guests and offers recommendations when they ask about things to do in the area. Those recommendations often include downtown restaurants and shops.
Drascics rental is not the only short-term lodging option in downtown Janesville. Henschler said there is another rental above North Main Street wine bar and Italian food bistro Genisa, while 111 Residences offers month-to-month rental options.
While the number of short-term rentals in the downtown area may be growing, the city does not consider them a significant source of revenue for its budget.
Dave Godek, the citys finance director, said room tax collected from short-term rentals is combined with room tax collected from traditional hotels.
However, because third-party booking sites collect and remit payments from both types of lodging, the city does not have a complete breakdown of how much room tax comes specifically from short-term rentals.
Based on the overall numbers, Godek estimates short-term rentals generate about $100,000 in room tax annually, or about 6% of the citys total room tax revenue in 2025.
The city collects the room tax and retains 40% of the revenue, up to an annual cap of $419,352. The remaining revenue is sent to the Janesville Area Convention & Visitors Bureau, Godek said. The citys portion is placed in the general fund.
Godek said overall room tax revenue has increased over the past five years. While the city cannot isolate how much of that increase comes from short-term rentals compared with hotels, he said it is reasonable to assume short-term rental tax revenue also is increasing.
Janesville hosts several events that bring visitors to the area, which could contribute to demand for short-term lodging. Godek pointed to events such as Flannel Fest, the holiday light show at Rotary Botanical Gardens, Janesville Jets games and youth sports tournaments as potential drivers of lodging demand.
Despite the apparent growth in short-term rentals, Godek said they remain a relatively small source of revenue for the city because the city retains only a portion of the room tax and that portion is capped.