Is Forsyth, Montana Good for Airbnb Investment?

To start an Airbnb in Forsyth, Montana, begin by researching local zoning laws and regulations through Rosebud County and the City of Forsyth, as Montana generally allows short-term rentals but local municipalities may have specific requirements including business licenses, occupancy permits, and tax registration with the Montana Department of Revenue for lodging taxes. Obtain necessary permits by contacting Forsyth City Hall for a business license (estimated $50-150 annually) and ensure your property meets fire safety codes and building requirements, which may require inspections. Find a suitable property by researching the local real estate market where median home prices are approximately $180,000-250,000, focusing on areas near Forsyth's downtown or close to the Yellowstone River for tourist appeal. Furnish the property with essential amenities including quality bedding, kitchen supplies, Wi-Fi, and local guidebooks, budgeting around $5,000-15,000 for initial furnishing depending on property size. List your property on Airbnb and other platforms like VRBO, setting competitive rates based on local market research (estimated $75-125 per night for a 2-bedroom property), and create compelling listings with professional photos highlighting Forsyth's proximity to outdoor recreation and small-town charm. Manage your property by establishing cleaning protocols, guest communication systems, and consider hiring local cleaning services or property management companies, while maintaining compliance with Montana's 3% statewide lodging tax and any additional local taxes, ensuring you keep detailed records for tax purposes and guest safety.

To identify profitable short-term rental properties in Forsyth, Montana, focus on properties within 2-3 miles of the Yellowstone River for fishing access and near Highway 12 for easy traveler access, as this small agricultural town of approximately 1,800 people primarily attracts outdoor enthusiasts and highway travelers. Target 2-4 bedroom single-family homes or ranch-style properties built after 1980 with modern amenities, full kitchens, outdoor spaces, and parking, as these appeal to fishing groups and families passing through to Yellowstone National Park. Analyze pricing by researching comparable rentals in nearby Billings (60 miles west) and adjusting downward by 30-40% for Forsyth's smaller market, aiming for $80-120 per night depending on property size and amenities. Competition research should focus on the limited existing STR inventory through Airbnb and VRBO searches, identifying gaps in availability during peak fishing seasons (May-September) and hunting seasons (fall), while monitoring occupancy rates of existing properties. Utilize tools like AirDNA for market data, STR Helper for revenue projections, Mashvisor for investment analysis, and local resources including the Forsyth Chamber of Commerce, Rosebud County records for property information, and networking with local real estate agents familiar with investment properties to identify opportunities in this emerging but limited STR market.

To obtain an Airbnb/STR permit in Forsyth, Montana, you must first contact the Forsyth City Clerk's office at City Hall located at 1005 Main Street to inquire about short-term rental licensing requirements, as Montana municipalities handle STR regulations locally. You'll likely need to submit a completed business license application, proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental unit, contact information for a local property manager if you're not local, and pay an estimated application fee of $100-300 annually. Additional requirements may include a fire safety inspection, compliance with zoning ordinances (typically allowed in residential zones with restrictions), maximum occupancy limits based on bedrooms and square footage, parking requirements of one space per bedroom, and adherence to noise ordinances. The approval process typically takes 2-4 weeks after submitting complete documentation, and you may need to display your permit number in rental listings and provide it to guests. Contact the Rosebud County Health Department for any additional health and safety requirements, and ensure compliance with Montana state tax obligations including the 3% state lodging tax through the Department of Revenue.

Short-term rentals (STRs) in Forsyth, Montana are generally legal but operate under limited local regulation as of 2024. Forsyth, a small city in Rosebud County with approximately 1,700 residents, does not appear to have comprehensive STR-specific ordinances, meaning they likely fall under general business licensing requirements and zoning regulations. The city typically requires basic business licenses for commercial activities, and STRs would need to comply with existing residential zoning laws and building codes. Montana state law generally allows local municipalities to regulate STRs, and most small Montana towns like Forsyth have not implemented restrictive bans, though they may require operators to obtain business licenses, collect local taxes, and ensure properties meet safety standards. There are no known prohibited areas specifically for STRs within Forsyth city limits, though residential zoning restrictions may apply. Recent legal changes have been minimal at the local level, with most regulatory activity occurring in larger Montana cities like Bozeman and Missoula rather than smaller communities like Forsyth, where STR activity is typically lower and less contentious.

The best areas for Airbnb investment in Forsyth, Montana are primarily concentrated around the downtown historic district near the Yellowstone River, which attracts visitors interested in fishing, boating, and river recreation activities. The residential neighborhoods within walking distance of Rosebud County Fairgrounds benefit from seasonal events and the annual county fair, typically drawing guests during summer months. Areas near Highway 12 and Interstate 94 intersection capture business travelers and those passing through to Yellowstone National Park, approximately 150 miles southwest. The neighborhoods close to Forsyth's golf course and recreational facilities appeal to leisure travelers seeking outdoor activities including hunting and fishing, particularly during peak seasons from May through September. Properties near the Yellowstone River access points are especially attractive due to the area's reputation for excellent fishing and the annual influx of anglers, while locations within a few blocks of Main Street restaurants and services provide convenience for guests exploring the historic railroad town atmosphere.

Airbnb properties in Forsyth, Montana are subject to Montana's statewide lodging facility use tax of 3% on gross receipts, which applies to all short-term rental accommodations under 30 days. The state tax is collected by the accommodation provider and must be remitted monthly to the Montana Department of Revenue by the 15th of the following month using Form LFU-1 if monthly gross receipts exceed $500, or quarterly if less. Rosebud County, where Forsyth is located, does not impose an additional county lodging tax, and the city of Forsyth does not currently have a municipal occupancy tax ordinance as of 2023. Airbnb may collect and remit the state lodging tax directly on behalf of hosts through their platform in Montana, but hosts should verify this arrangement and ensure compliance. Exemptions include stays of 30 days or longer, accommodations provided to permanent residents, and certain government employee lodging, while properties with annual gross receipts under $2,000 from lodging services are exempt from the tax requirement.

Starting an Airbnb in Forsyth, Montana requires approximately $180,000-220,000 in total initial investment. Property purchase represents the largest expense at $150,000-180,000 based on median home prices in rural Montana markets. Furnishing costs typically range $8,000-12,000 for a complete 2-3 bedroom setup including beds, linens, kitchen essentials, and living room furniture from retailers like IKEA, Wayfair, and local suppliers. Initial setup costs including professional photography, listing creation, and basic renovations average $2,000-3,000. Permits and fees vary but expect $500-1,500 for business licenses, short-term rental permits, and potential zoning approvals through Rosebud County. Insurance premiums for short-term rental coverage run $1,200-2,000 annually, with companies like Proper Insurance and CBIZ offering specialized Airbnb policies. Utility deposits and connections (electricity, water, internet, cable) cost approximately $500-800 initially. First six months operating expenses including utilities ($150-250/month), cleaning supplies ($100/month), maintenance reserves ($200/month), platform fees (3% of bookings), and marketing budget total roughly $3,000-5,000, assuming moderate occupancy rates of 40-60% typical for rural Montana markets in 2024.

Airbnb properties in Forsyth, Montana show moderate profitability potential with average daily rates ranging from $75-120 depending on property size and amenities, generating annual revenues of $15,000-35,000 for properties with 40-60% occupancy rates. Operating expenses typically consume 35-45% of gross revenue, including cleaning fees ($25-40 per turnover), utilities ($150-250 monthly), property management (10-15% if outsourced), insurance ($800-1,200 annually), and maintenance costs averaging $2,000-4,000 yearly. Net profit margins generally fall between 25-40% for well-managed properties, with success factors including proximity to Yellowstone River recreational activities, competitive pricing during peak summer months (June-September), professional photography, and responsive guest communication. Properties near downtown Forsyth or with unique features like river access tend to outperform, with some hosts reporting $20,000-30,000 annual net profits on modest 2-3 bedroom homes purchased for $150,000-250,000, though seasonal fluctuations and Montana's harsh winters significantly impact occupancy rates from November through March, requiring hosts to factor in 3-4 months of minimal bookings when calculating annual returns.

Airbnb investments in Forsyth, Montana typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, based on the town's position along the Yellowstone River and proximity to outdoor recreation areas. Properties in Forsyth, with average purchase prices around $180,000-$250,000, can expect gross rental yields of 12-18% annually, with net returns after expenses settling at the lower ROI range. The timeframe to profitability is generally 18-24 months, considering initial setup costs, furnishing, and marketing expenses. Seasonal demand peaks during summer months (June-September) when fishing and hunting activities drive occupancy rates to 65-75%, while winter months see reduced demand at 35-45% occupancy. Cash-on-cash returns are optimized when investors put down 20-25% and leverage financing, with break-even typically occurring within the first 12-18 months of operation given Forsyth's growing appeal as a gateway to eastern Montana's recreational opportunities.

STRSearch is a national platform that specializes in identifying profitable short-term rental investment opportunities including in Forsyth, Montana. Local real estate agents in the Forsyth area who work with Airbnb investors include Century 21 Big Sky Real Estate, Yellowstone Valley Properties, and RE/MAX Billings. National services that help investors find profitable Airbnb properties include Mashvisor, which provides rental property analytics, AirDNA for market data and revenue projections, Awning for turnkey Airbnb investments, Roofstock for rental property purchases, and RedAwning for vacation rental market analysis. Local property management companies that can assist investors include Big Sky Vacation Rentals and Montana Property Solutions. Additional services include BiggerPockets for investor networking and education, Vacasa for property management, and local mortgage brokers like First Interstate Bank and Stockman Bank who understand investment property financing in Montana markets.