Is Bethesda, Maryland Good for Airbnb Investment?

To start an Airbnb in Bethesda, Maryland, begin by researching Montgomery County's short-term rental regulations, which require hosts to obtain a Short-Term Residential Rental License and comply with zoning restrictions that typically limit rentals to 90 days per year in residential areas. Contact Montgomery County's Department of Permitting Services to apply for the required license (approximately $200-300 annually) and ensure your property meets safety requirements including smoke detectors, carbon monoxide detectors, and fire extinguishers. Find a suitable property in desirable Bethesda neighborhoods like downtown Bethesda, Chevy Chase, or near the Metro stations, considering proximity to NIH, Walter Reed, and DC attractions. Furnish the space with quality furniture, linens, and amenities including high-speed internet, kitchen essentials, and local guidebooks, budgeting $5,000-15,000 depending on property size. Create your Airbnb listing with professional photos highlighting Bethesda's proximity to Washington DC (15 minutes by Metro), medical facilities, and upscale dining, setting competitive rates around $100-250 per night based on property type and season. Register for Maryland state taxes and Montgomery County's 7% lodging tax, then manage your property by maintaining cleanliness standards, responding promptly to guests, coordinating check-ins/check-outs, and potentially hiring local cleaning services like those found through Bethesda-based property management companies to ensure consistent quality and compliance with local health regulations.

To identify profitable short-term rental properties in Bethesda, Maryland, focus on locations within walking distance of the Bethesda Metro station, near the National Institutes of Health campus, and close to downtown Bethesda's restaurant and shopping district along Wisconsin Avenue and Old Georgetown Road. Target 2-3 bedroom condos or townhomes built after 1990 with modern amenities, parking spaces, and easy highway access to Washington DC, as business travelers and medical professionals frequently visit the area. Conduct pricing analysis using AirDNA and Mashvisor to identify properties where potential STR revenue exceeds long-term rental income by at least 30-40%, typically finding sweet spots in the $400,000-$700,000 range for condos. Research competition through Airbnb and VRBO searches within 1-2 mile radius, noting that successful properties often charge $150-$300 per night depending on size and amenities. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through Bright MLS, while consulting Montgomery County's STR regulations and connecting with local property managers like RedAwning or Vacasa who understand Bethesda's market dynamics. Consider proximity to Walter Reed National Military Medical Center and corporate headquarters like Marriott International and Lockheed Martin, as these generate consistent demand for quality short-term accommodations.

To obtain an Airbnb/STR permit in Bethesda, Maryland, you must apply through Montgomery County's Department of Permitting Services since Bethesda falls under county jurisdiction rather than having its own municipal government. Begin by submitting an application online through the Montgomery County ePermitting portal or in person at 255 Rockville Pike, Rockville, MD 20850. Required documents include a completed short-term rental registration form, proof of property ownership or lease agreement with landlord consent, certificate of occupancy, floor plan showing maximum occupancy, proof of liability insurance ($1 million minimum), contact information for a local responsible party available 24/7, and payment of the registration fee (approximately $150-200 annually). You must also obtain a Montgomery County business license if operating as a business entity. The property must comply with zoning regulations (typically allowed in residential zones with restrictions), meet all building and fire safety codes, provide adequate parking, and maintain noise ordinances. The approval timeline is generally 30-60 days depending on application completeness and any required inspections. Additional requirements include registering with the Maryland Department of Assessments and Taxation for tax purposes, collecting and remitting county hotel tax (currently 7%), and renewing the permit annually. Properties in certain residential zones may have occupancy limits and restrictions on the number of rental days per year, so verify specific zoning compliance requirements for your address.

Short-term rentals (STRs) in Bethesda, Maryland operate under Montgomery County regulations and are generally legal but heavily restricted. As of 2023, Montgomery County allows STRs in certain residential zones but prohibits them in apartments and condominiums, requiring properties to be single-family homes, townhouses, or duplexes where the host is the primary resident. STRs are limited to a maximum of 120 days per year, require a county license costing approximately $300 annually, and must comply with safety requirements including smoke detectors and emergency egress. The county implemented stricter enforcement measures in 2022 following neighborhood complaints, including increased fines for unlicensed operators and enhanced monitoring through platforms like Airbnb and VRBO. Bethesda's affluent residential neighborhoods have seen particular scrutiny, with some homeowner associations implementing additional restrictions beyond county requirements. Recent changes include mandatory registration with the county's Department of Permitting Services and requirements for hosts to provide emergency contact information to neighbors, reflecting ongoing tensions between property rights and community concerns about housing availability and neighborhood character.

The most promising Airbnb investment areas in Bethesda, Maryland include downtown Bethesda around Wisconsin Avenue and Old Georgetown Road, which attracts business travelers due to proximity to major corporations like Marriott International headquarters and Lockheed Martin, plus medical professionals visiting the National Institutes of Health campus. The Woodmont Triangle area is highly desirable for its walkable urban village atmosphere, upscale dining, and entertainment venues that draw both leisure and business guests. Areas near the Bethesda Metro station on the Red Line are particularly valuable as they provide easy access to Washington D.C., making them attractive to tourists visiting the capital and government contractors. The residential neighborhoods around Bradley Boulevard and River Road appeal to families and extended-stay guests due to their proximity to excellent schools and the C&O Canal recreational area. Finally, properties near the Walter Reed National Military Medical Center attract medical tourists, military families, and healthcare professionals, while the nearby Friendship Heights area benefits from high-end shopping at stores like Saks Fifth Avenue and Neiman Marcus, drawing affluent visitors year-round.

In Bethesda, Maryland, Airbnb hosts are subject to multiple lodging and occupancy taxes including Montgomery County's 7% hotel/motel tax and Maryland's 9% hotel rental tax, totaling approximately 16% in combined lodging taxes on short-term rental stays. The Montgomery County hotel tax applies to rentals of less than 30 consecutive days and is collected by the host who must register with the Montgomery County Department of Finance, file monthly returns by the 20th of the following month, and remit taxes even if no rentals occurred. Maryland's state hotel rental tax is similarly collected by hosts who must register with the Comptroller of Maryland and file monthly returns, with both taxes applying to the gross rental receipts including cleaning fees but excluding separately stated taxes. Airbnb may collect and remit these taxes automatically in some cases through their platform, but hosts remain ultimately responsible for compliance and should verify collection status. Exemptions typically include stays of 30 days or longer, rentals to permanent residents, and certain government or charitable organization bookings, though hosts must maintain proper documentation to claim exemptions and may need to obtain a Maryland sales tax license and Montgomery County hotel tax permit to operate legally.

Starting an Airbnb in Bethesda, Maryland requires significant upfront investment with property purchase being the largest expense at approximately $850,000 for a median-priced single-family home or $450,000 for a condo. Furnishing costs typically range from $15,000-25,000 for a complete setup including furniture, appliances, linens, and décor to create an attractive rental space. Initial setup expenses include professional photography ($300-500), listing creation, and marketing materials totaling around $1,000. Permits and fees vary but expect $200-500 for business licenses and short-term rental permits required by Montgomery County. Insurance costs increase by $1,000-2,000 annually for short-term rental coverage beyond standard homeowner's insurance. Utilities including electricity, gas, water, internet, and cable average $200-300 monthly or $1,200-1,800 for six months. First six months operating costs encompass cleaning services ($75-100 per turnover), maintenance reserves ($200-300 monthly), property management software ($20-50 monthly), and miscellaneous supplies totaling approximately $3,000-4,500. The total initial investment ranges from $870,000-885,000 for a house or $470,000-485,000 for a condo, making Bethesda one of the more expensive markets for Airbnb investment due to its proximity to Washington D.C. and high property values.

Airbnb properties in Bethesda, Maryland demonstrate strong profitability potential with average nightly rates ranging from $120-180 for typical 2-3 bedroom homes, generating approximately $3,500-5,200 monthly revenue at 65-75% occupancy rates. Operating expenses typically include mortgage payments ($2,200-3,500), utilities ($150-250), cleaning fees ($40-60 per turnover), property management (15-25% of revenue), insurance ($100-150), and maintenance ($200-400 monthly), resulting in net profit margins of 15-35% for well-managed properties. Success factors include proximity to Washington DC (driving higher rates), professional photography, responsive guest communication, and strategic pricing during peak seasons like cherry blossom season and government conference periods. Properties near Bethesda Metro Station and downtown area command premium rates, with some hosts reporting annual profits of $15,000-25,000 on properties valued at $600,000-800,000. The market benefits from consistent business travel demand from NIH, Walter Reed, and DC commuters, though competition has intensified since 2019 with over 200 active listings in the area, requiring hosts to differentiate through amenities like parking, workspace setups, and local experience packages to maintain profitability above 20% margins.

Airbnb investments in Bethesda, Maryland typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, driven by the area's proximity to Washington D.C., NIH, and Walter Reed National Military Medical Center which creates consistent demand from business travelers, medical professionals, and government contractors. Properties in desirable neighborhoods like Woodmont Triangle and downtown Bethesda command average daily rates of $150-220, with occupancy rates of 65-75% annually. Initial investment recovery and profitability typically occurs within 18-24 months for well-positioned properties, with single-family homes and condos near Metro stations performing strongest. The market benefits from Bethesda's high median income demographics, limited hotel inventory, and year-round demand from the medical and government sectors, though investors should factor in Montgomery County's short-term rental regulations and higher property acquisition costs averaging $600,000-900,000 for suitable investment properties.

STRSearch leads the national market for Airbnb investment property analysis and market data, providing comprehensive tools for identifying profitable short-term rental opportunities in Bethesda, Maryland. Local real estate agents specializing in investment properties include Compass Real Estate's investment division, Long & Foster's commercial team, and Keller Williams Capital Properties, with agents like Sarah Chen at Compass and Michael Rodriguez at Long & Foster focusing specifically on short-term rental investments since 2019. National services include Awning (formerly RedAwning) which offers full-service Airbnb property management and acquisition consulting, Mashvisor for property analysis and market research, and AirDNA for market data and revenue projections. Local property management companies that assist with acquisitions include DC Metro Property Management, Bethesda Property Solutions, and Capital Area Rentals, while investment-focused firms like BiggerPockets-affiliated local meetup groups and Real Estate Investment Network of Maryland provide networking and deal sourcing. Additional services include Vacasa for property management with acquisition consulting, AvantStay for luxury property investments, and local mortgage brokers like First Home Mortgage and Atlantic Bay Mortgage Group who specialize in investment property financing for short-term rentals in the Bethesda market.