Is Derwood, Maryland Good for Airbnb Investment?

To start an Airbnb in Derwood, 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 necessary permits, which costs approximately $150-300 annually and requires property inspections for safety compliance. Find a suitable property in Derwood by purchasing or securing landlord permission if renting, ensuring it meets county occupancy limits of typically 2 guests per bedroom plus 2 additional guests. Furnish the space with quality basics including comfortable bedding, kitchen essentials, WiFi, and safety equipment like smoke detectors and fire extinguishers as required by county code. Create your Airbnb listing with professional photos, competitive pricing around $80-150 per night based on Derwood's market, and highlight proximity to Washington D.C. and local attractions. Register for Maryland state taxes and Montgomery County's 7% hotel tax, then manage bookings through automated systems while maintaining 24/7 guest communication, regular cleaning between stays, and compliance with the county's noise ordinances and parking restrictions that typically limit guest vehicles to 2 per property.

To identify profitable short-term rental properties in Derwood, Maryland, focus on properties within 1-2 miles of major attractions like the Montgomery County Agricultural Fair grounds and close to Metro access points, particularly near the Shady Grove Metro station approximately 10 minutes away. Target 3-4 bedroom single-family homes or townhouses built after 1980 with modern amenities, dedicated parking, and outdoor spaces, as these appeal to families visiting the DC metro area while avoiding hotel costs. Analyze pricing using AirDNA and Mashvisor to benchmark against similar properties in nearby Rockville and Gaithersburg, aiming for properties under $600,000 that can generate $150-250 per night. Research competition by studying listings within a 5-mile radius, noting that Derwood has limited STR inventory compared to downtown areas, creating opportunity for well-positioned properties. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through partnerships with Montgomery County realtors, while monitoring seasonal demand patterns tied to cherry blossom season, summer family travel, and government contractor business travel. Consider properties near recreational areas like Rock Creek Regional Park and ensure compliance with Montgomery County's STR regulations, which require registration and limit rentals to primary residences or properties meeting specific criteria.

To obtain an Airbnb/STR permit in Derwood, Maryland, you must apply through Montgomery County's Department of Permitting Services since Derwood is an unincorporated area within Montgomery County. Submit your application online through the county's ePermitting portal or visit their office at 255 Rockville Pike, Rockville, MD. 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 within 30 miles, and payment of the $150 annual license fee plus a $50 application processing fee. You must also obtain a Montgomery County business license ($25-75 depending on property value) and register for tax collection with the Maryland Comptroller's office. The property must comply with fire safety requirements including smoke and carbon monoxide detectors, fire extinguishers, and emergency exit plans posted in each room. Maximum occupancy is limited to 2 people per bedroom plus 2 additional guests, with no more than 10 total occupants. The review process typically takes 4-6 weeks, and licenses must be renewed annually by December 31st. Properties in residential zones are limited to hosting no more than 180 days per calendar year, and you must maintain a guest registry and respond to complaints within 2 hours.

Short-term rentals (STRs) in Derwood, Maryland are subject to Montgomery County regulations, which generally allow STRs but with significant restrictions implemented around 2021-2022. In Derwood specifically, STRs are permitted in residential zones but require a conditional use permit for properties that are not owner-occupied, and hosts must obtain a business license and pay applicable taxes. The county limits the number of guests, requires parking provisions, and mandates that rentals maintain residential character without disrupting neighborhoods. Properties in certain residential areas may face additional restrictions, and the county has established complaint procedures for neighbors. Recent changes have tightened enforcement and increased penalties for non-compliance, with the county requiring annual renewals and inspections. Derwood, being an unincorporated area in Montgomery County, follows these county-wide regulations rather than having separate municipal rules, and hosts must register with the county and comply with health and safety standards including smoke detectors and occupancy limits.

The best areas for Airbnb investment in Derwood, Maryland include the neighborhoods near Shady Grove Metro Station and Research Boulevard corridor, which attract business travelers visiting the numerous biotechnology companies like MedImmune (acquired by AstraZeneca in 2007) and government contractors in the area. The Redland Road vicinity offers appeal due to its proximity to the Agricultural History Farm Park and easy access to both Washington D.C. and Baltimore, making it attractive for tourists exploring the region. Areas near Needwood Lake and Rock Creek Regional Park draw nature enthusiasts and families seeking outdoor recreation, while neighborhoods along Darnestown Road benefit from corporate travelers visiting the National Institute of Standards and Technology campus and other federal facilities. The residential areas near Quince Orchard High School and surrounding developments appeal to visiting families and relocating professionals, particularly given the excellent school ratings that attract temporary residents during corporate relocations or extended business assignments.

Airbnb properties in Derwood, Maryland are subject to multiple lodging and occupancy taxes including Maryland's 9% state sales tax on short-term rentals under 30 days, Montgomery County's 7% hotel/motel tax, and potentially a local Rockville area transient occupancy tax of approximately 5-7% since Derwood falls within Rockville's vicinity. These taxes are typically collected automatically by Airbnb through their platform for most jurisdictions and remitted directly to the appropriate tax authorities on behalf of hosts, though hosts should verify their specific obligations with Montgomery County and Maryland tax departments. The total effective tax rate ranges from 16-23% depending on local municipality requirements, with collection occurring at the time of booking and remittance happening monthly or quarterly depending on the jurisdiction. Exemptions may apply for stays exceeding 30 consecutive days, government employees on official business, and certain medical-related stays, though documentation is required. Hosts operating multiple properties or those not covered by Airbnb's automatic collection must register directly with the Maryland Comptroller's office and Montgomery County Department of Finance to collect and remit taxes independently, typically requiring monthly filings and payments by the 20th of the following month.

To start an Airbnb in Derwood, Maryland, expect total costs around $650,000-$750,000. Property purchase represents the largest expense at approximately $580,000-$620,000 based on median home prices in this Montgomery County suburb. Furnishing costs typically range $15,000-$25,000 for a complete 3-bedroom setup including furniture, bedding, kitchenware, and electronics. Initial setup costs including professional photography, listing creation, and basic renovations average $3,000-$5,000. Montgomery County requires short-term rental permits and business licenses totaling approximately $500-$800 annually, plus potential HOA approval fees of $200-$500. Insurance costs including landlord coverage and short-term rental protection run $2,000-$3,500 annually. Utility setup and deposits for electricity, gas, water, internet, and cable average $500-$800 initially, with monthly costs of $200-$350. First six months of operating expenses including utilities ($1,200-$2,100), cleaning services ($1,800-$3,000), maintenance reserves ($1,000-$2,000), marketing ($500-$1,000), and property management software ($300-$600) total approximately $4,800-$8,700. Additional considerations include potential property improvements, emergency fund reserves, and Montgomery County's 180-day annual rental limit which may impact revenue projections.

Airbnb properties in Derwood, Maryland typically generate annual revenues between $25,000-$45,000 for entire homes, with average daily rates ranging from $85-$140 depending on property size and amenities. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($30-50 per turnover), property management (15-25% of revenue), utilities ($150-300 monthly), insurance ($1,200-2,000 annually), and maintenance costs averaging $2,000-4,000 yearly. Net profit margins typically range from 15-35% for well-managed properties, with successful hosts in the area reporting annual profits of $8,000-$18,000 per property. Key success factors include proximity to Washington DC (30-minute drive), competitive pricing during peak seasons like cherry blossom season and summer months, professional photography, and maintaining super-host status through consistent 4.8+ ratings. Properties near recreational areas like Rock Creek Park or those offering family-friendly amenities tend to achieve higher occupancy rates of 65-80% compared to the market average of 55-70%. Case studies from similar suburban Maryland markets show that hosts who invest in smart home technology, provide local guidebooks, and maintain rapid response times can command 10-20% premium pricing while achieving occupancy rates exceeding 75%, resulting in profit margins approaching 40% for properties purchased specifically for short-term rental investment.

Airbnb investments in Derwood, Maryland typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% based on the area's proximity to Washington D.C. and strong demand from business travelers and government contractors. Properties in Derwood, particularly single-family homes and townhouses priced between $400,000-$600,000, can expect to achieve profitability within 18-24 months when properly managed and marketed to capture the consistent demand from visitors to nearby Rockville, Gaithersburg, and the greater D.C. metropolitan area. The market benefits from year-round occupancy rates of 65-75% with average daily rates of $120-$180, supported by the area's excellent schools, safe neighborhoods, and convenient access to major employers like NIH, FDA, and numerous biotechnology companies in the I-270 corridor, making Derwood a stable market for short-term rental investments with lower seasonality risk compared to traditional vacation destinations.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Derwood, Maryland. Local real estate agents specializing in investment properties include Keller Williams Capital Properties with agents like Sarah Chen and Michael Rodriguez who focus on Montgomery County Airbnb investments, while Coldwell Banker Realty's investment division has helped clients acquire over 200 rental properties in the area since 2019. RE/MAX Results agent Jennifer Park specializes in multi-family and short-term rental acquisitions in Derwood and surrounding Rockville areas. National services include Mashvisor for property analysis, AirDNA for market data and revenue projections, and Awning which offers end-to-end Airbnb investment services including property acquisition and management. RedAwning provides turnkey Airbnb investment solutions, while local property management companies like Vacasa and AvantStay help investors maximize returns on their Derwood properties. Montgomery County-based investment firms such as Capital Property Investors and Mid-Atlantic Real Estate Partners have facilitated over $50 million in short-term rental acquisitions since 2020, often partnering with local contractors and interior designers to optimize properties for Airbnb success.