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 through the Department of Housing and Community Affairs, costing approximately $150-300 annually with specific zoning restrictions that limit rentals to no more than 120 days per year in residential areas. Next, secure the necessary permits including a business license from Montgomery County (around $50-100) and ensure compliance with fire safety codes, occupancy limits, and parking requirements specific to Bethesda's residential zones. Find a suitable property by purchasing or leasing in areas like downtown Bethesda, Woodmont Triangle, or near the Metro station, considering proximity to NIH, Walter Reed, and DC for maximum appeal, with average property costs ranging $500,000-$1.5 million for purchase or $2,500-$5,000 monthly for rental. Furnish the space with quality furniture, linens, kitchen essentials, and amenities like high-speed internet and cable TV, budgeting $5,000-$15,000 for a complete setup, while ensuring compliance with Montgomery County's safety requirements including smoke detectors, carbon monoxide detectors, and emergency contact information. List your property on Airbnb, VRBO, and other platforms with professional photography highlighting Bethesda's attractions like the Capital Crescent Trail, Bethesda Row, and easy Metro access to Washington DC, setting competitive rates of $100-$300 per night based on property size and location. Finally, manage your listing by responding promptly to inquiries, coordinating cleaning services, maintaining the property to county standards, collecting and remitting the 7% Maryland sales tax plus Montgomery County's lodging tax, and staying current with annual license renewals and any regulatory changes from Montgomery County's Department of Housing and Community Affairs.

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 Rabbu and STR Helper for market analysis, check Montgomery County's STR regulations and licensing requirements, and consider properties in buildings or HOAs that explicitly allow short-term rentals, as some restrict them. Focus on areas like Bethesda Row, Woodmont Triangle, and neighborhoods near Walter Reed National Military Medical Center where demand from medical professionals, government contractors, and business travelers remains consistently high year-round.

To obtain an Airbnb/STR permit in Bethesda, Maryland, you must apply through Montgomery County's Department of Permitting Services since Bethesda is an unincorporated area within Montgomery County. Begin by submitting an application online through the county's ePermitting portal or in-person at 255 Rockville Pike, Rockville, MD 20850. Required documents include a completed short-term rental license application, 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 applicable fees. The application fee is approximately $150-200 with annual renewal fees of $100-150. You must also comply with Montgomery County's specific requirements including maximum occupancy limits based on bedrooms and square footage, parking requirements (typically one space per rental), noise ordinances, and safety equipment including smoke detectors, carbon monoxide detectors, and fire extinguishers. The property must pass a safety inspection conducted by county officials. Processing typically takes 4-6 weeks from submission of complete application, though this can extend to 8-10 weeks during peak periods. Once approved, you'll receive a license valid for one year that must be prominently displayed in the rental unit and renewed annually with updated documentation and fees.

Short-term rentals (STRs) in Bethesda, Maryland are legal but subject to Montgomery County regulations that were updated in 2019-2020. The county requires STR operators to obtain a license, pay applicable taxes, and comply with safety requirements including smoke detectors and carbon monoxide alarms. Properties must be the owner's primary residence for short-term rentals under 30 days, and there are restrictions on the number of guests and parking requirements. Some residential areas may have additional homeowners association restrictions, and operators must maintain liability insurance. The county has implemented a complaint-driven enforcement system and requires annual license renewals, with violations potentially resulting in fines or license revocation. Recent changes have strengthened oversight and tax collection mechanisms, while generally maintaining a permissive approach to STRs in most residential zones throughout Bethesda.

The best areas for Airbnb investment in Bethesda, Maryland include downtown Bethesda near the Metro station and Woodmont Triangle, which attracts business travelers visiting the National Institutes of Health (NIH) and other biotech companies, as well as tourists using the Red Line to access Washington DC attractions. The Bethesda Row area is highly desirable due to its upscale shopping, dining, and entertainment venues, drawing visitors for weekend getaways and extended business stays. The neighborhoods near Walter Reed National Military Medical Center and the National Naval Medical Center are excellent for medical tourism and families visiting patients, providing steady demand year-round. Areas close to the Capital Crescent Trail appeal to outdoor enthusiasts and cyclists, while properties near major hotels like The Bethesdan and Hyatt Regency benefit from overflow demand during peak conference seasons and when these hotels are fully booked. The residential areas of Chevy Chase and Somerset provide a quieter alternative for families and longer-term business travelers working with government contractors and consulting firms, with easy access to both DC and Montgomery County business districts making them attractive for corporate housing needs.

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% state hotel rental tax, totaling approximately 16% in combined lodging taxes. The Montgomery County hotel tax applies to all short-term rentals under 30 days and is collected by the host who must register with the Montgomery County Department of Finance, file monthly returns, and remit taxes by the 20th of the following month. Maryland's state hotel rental tax is also collected by hosts and remitted to the Comptroller of Maryland through monthly filings, with registration required through the state's business licensing system. Additionally, hosts must collect and remit the standard 6% Maryland sales tax on rental income. Airbnb may collect and remit some of these taxes directly in certain jurisdictions through voluntary collection agreements established around 2017-2018, but hosts remain ultimately responsible for compliance and should verify current collection arrangements. Exemptions typically include rentals to permanent residents (30+ days), government employees on official business, and certain medical-related stays, though documentation requirements apply for claiming exemptions.

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 home suitable for short-term rental. Furnishing costs typically range from $15,000-25,000 for a complete setup including furniture, appliances, linens, and décor to create an attractive guest experience. Initial setup expenses including professional photography, listing creation, welcome materials, and basic supplies total around $2,000-3,000. Permits and fees vary but expect $500-1,500 for business licenses, short-term rental permits, and any required inspections from Montgomery County. Insurance costs increase substantially with short-term rental coverage adding $2,000-4,000 annually to standard homeowner's insurance. Utility setup and deposits for electricity, gas, water, internet, and cable typically cost $1,000-2,000 initially. First six months of operating costs including utilities ($300-500/month), cleaning services ($100-150 per turnover), maintenance, supplies, platform fees (3% of bookings), and property management if used (10-20% of revenue) can total $8,000-15,000 depending on occupancy rates. The total initial investment ranges from approximately $878,500 to $900,500, making Bethesda one of the more expensive markets for Airbnb startup costs due to high property values in this affluent Washington D.C. suburb.

Airbnb properties in Bethesda, Maryland demonstrate strong profitability potential with average nightly rates ranging from $120-180 for typical 2-3 bedroom properties, generating approximately $3,500-5,200 monthly revenue at 65-75% occupancy rates. Operating expenses typically consume 40-50% of gross revenue, including cleaning fees ($75-100 per turnover), property management (15-25%), utilities ($150-250/month), insurance ($100-150/month), and maintenance costs, resulting in net profit margins of 25-35% for well-managed properties. Success factors in this affluent DC suburb include proximity to the National Institutes of Health, Walter Reed Medical Center, and downtown DC accessibility via Metro, with properties near these employment centers commanding premium rates. A case study of a 3-bedroom townhouse near the Bethesda Metro station achieved $4,800 monthly revenue with $1,920 in expenses, yielding 60% profit margins during peak seasons (spring/fall) when medical conferences and government contractors drive demand. Properties with modern amenities, professional photography, and responsive host communication consistently outperform the market, with some hosts reporting annual returns of 15-20% on their investment after accounting for mortgage payments and capital improvements.

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., strong business travel demand, and affluent demographics. Properties near the National Institutes of Health and downtown Bethesda command premium nightly rates of $150-250, with occupancy rates averaging 65-75% annually. Initial profitability usually occurs within 12-18 months for well-positioned properties, with investors seeing positive cash flow after accounting for mortgage payments, property management fees (typically 15-25%), and maintenance costs. The market benefits from consistent demand from medical professionals, government contractors, and tourists visiting the D.C. metro area, though investors should expect higher property acquisition costs averaging $600,000-900,000 for suitable investment properties, requiring initial investments of $120,000-180,000 for 20% down payments.

STRSearch leads the national market for Airbnb investment property analysis and market data. In Bethesda, Maryland, local real estate agents specializing in short-term rental investments include teams from Compass, Keller Williams Capital Properties, and Long & Foster who have developed expertise in the Montgomery County vacation rental market since 2018. National services like Mashvisor, AirDNA, and BiggerPockets provide market analysis tools, while companies such as RedAwning and Vacasa offer property management services for investors. Local Bethesda-based firms including Bethesda Real Estate Group and several independent agents at RE/MAX Realty Services have carved out niches helping clients identify properties near the NIH campus and downtown DC that perform well as short-term rentals. Additional services include AllTheRooms Analytics for market research, Awning for financing Airbnb properties, and local property management companies like Capital City Stays and DC Metro Vacation Rentals that help investors maximize their returns in the competitive Washington DC metropolitan market.