Is Kensington, Maryland Good for Airbnb Investment?

To start an Airbnb in Kensington, 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, and comply with safety requirements including smoke detectors, carbon monoxide detectors, and fire extinguishers. Next, secure your property either by purchasing real estate in Kensington's residential neighborhoods near the Metro station (average home prices around $600,000-800,000 as of 2023) or obtaining landlord permission if renting, then ensure the property meets Montgomery County's zoning requirements which typically allow short-term rentals in residential zones with restrictions on the number of guests and parking. Furnish the space with quality furniture, linens, kitchen essentials, and amenities that appeal to Washington D.C. area visitors, focusing on professional décor since many guests will be business travelers given Kensington's proximity to the capital. Create your Airbnb listing with professional photography highlighting the property's proximity to the Kensington Metro station, downtown Silver Spring, and Washington D.C., setting competitive rates based on local market analysis (typically $80-150 per night depending on property size and amenities). Finally, establish management systems including automated messaging, cleaning services, key exchange methods, and maintain compliance with Montgomery County's occupancy limits, noise ordinances, and tax collection requirements including the 7% county lodging tax that must be remitted quarterly to maintain your license in good standing.

To identify profitable short-term rental properties in Kensington, Maryland, focus on locations within walking distance of the Metro Red Line station, near Rock Creek Park trails, and close to downtown Silver Spring amenities, as these areas attract both business travelers commuting to DC and leisure visitors exploring the region. Target 2-3 bedroom single-family homes or townhouses built after 1980 with dedicated parking, updated kitchens, reliable WiFi infrastructure, and outdoor spaces like patios or decks that appeal to families and small groups. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against comparable properties in nearby Bethesda and Silver Spring, aiming for nightly rates between $120-180 depending on size and amenities, while calculating potential annual revenue of $35,000-55,000 for well-positioned properties. Research competition by analyzing existing Airbnb and VRBO listings within a 2-mile radius, identifying gaps in amenities or guest services, and monitoring occupancy rates and guest reviews to understand market saturation. Utilize tools like Rabbu for Montgomery County permit requirements, STR Helper for local regulation compliance, and partner with local property management companies familiar with Maryland's short-term rental laws to ensure profitable operations while maintaining regulatory compliance.

To obtain an Airbnb/STR permit in Kensington, Maryland, you must first apply through the Montgomery County Department of Permitting Services since Kensington follows county regulations for short-term rentals. Begin by submitting an application online through the Montgomery County ePermitting portal or in person at 255 Rockville Pike, Rockville, MD. Required documents include a completed STR application form, proof of property ownership or lease agreement with landlord consent, a floor plan showing the rental space, proof of liability insurance (minimum $1 million), a safety inspection certificate, and a business license from Montgomery County. You'll need to pay an initial application fee of approximately $200-300, plus an annual renewal fee of around $150-200. The property must undergo a safety inspection covering smoke detectors, carbon monoxide detectors, fire extinguishers, and emergency egress routes. Specific Kensington requirements include maintaining the property as your primary residence if operating a homestay, limiting occupancy to no more than 8 guests, providing adequate parking, and ensuring compliance with noise ordinances. The approval timeline typically takes 4-6 weeks after submitting a complete application and passing the required inspection. Once approved, you must display your permit number in all online listings and renew annually by December 31st.

Short-term rentals (STRs) in Kensington, Maryland are generally prohibited under the town's zoning ordinances, which restrict residential properties to long-term occupancy and do not permit commercial lodging activities in residential zones. The Town of Kensington, incorporated in 1894, maintains strict residential zoning that typically requires rental periods of 30 days or longer, effectively banning platforms like Airbnb and VRBO for stays under this threshold. The town has not enacted specific STR regulations but instead relies on existing zoning laws that classify short-term rentals as commercial uses incompatible with residential neighborhoods. Property owners found operating STRs can face code enforcement actions and fines, as the town prioritizes maintaining the residential character of its historic neighborhoods. Unlike some surrounding Montgomery County jurisdictions that have created STR licensing frameworks, Kensington has maintained its restrictive stance without recent legal changes to accommodate short-term rental operations, making it one of the more restrictive municipalities in the Washington D.C. metropolitan area regarding STR activities.

The best areas for Airbnb investment in Kensington, Maryland include the historic downtown district along Connecticut Avenue, which attracts visitors due to its charming antique shops, local restaurants, and proximity to the Metro Red Line providing easy access to Washington DC for business travelers and tourists. The residential neighborhoods near Rock Creek Park, particularly around Knowles Avenue and Plyers Mill Road, offer attractive properties for families visiting the area's recreational facilities and those seeking quieter accommodations while maintaining Metro accessibility. The area near the Kensington train station and MARC Brunswick Line is highly desirable for business travelers commuting to DC and Baltimore, with consistent demand from government contractors and consultants. Properties near the National Institutes of Health (NIH) campus in nearby Bethesda draw medical professionals, researchers, and patients' families requiring extended stays. The neighborhoods around Warner Avenue and Summit Avenue benefit from proximity to both the Kensington Farmers Market and various community events, attracting weekend visitors and those interested in the town's small-town charm while being within 30 minutes of major DC attractions like the Smithsonian museums and Capitol Hill.

In Kensington, Maryland, Airbnb properties are subject to Maryland's state sales tax of 6% on lodging accommodations, which applies to rentals of less than 30 consecutive days. Montgomery County, where Kensington is located, imposes an additional hotel/motel tax of 7% on short-term rentals, bringing the total occupancy tax rate to approximately 13%. These taxes are typically collected by Airbnb directly from guests at the time of booking through their automated tax collection system, which began in Maryland around 2017, and the platform remits these taxes quarterly to the Maryland Comptroller's office and Montgomery County. Property owners must register with the Maryland Comptroller to obtain a sales tax license and may need to file returns even when Airbnb collects taxes, depending on their total rental activity. Exemptions generally apply to rentals of 30 days or longer, which are considered long-term leases rather than transient accommodations, and certain properties used for permanent residence purposes may also be exempt from occupancy taxes.

To start an Airbnb in Kensington, Maryland, expect total costs around $650,000-$750,000. Property purchase represents the largest expense at approximately $550,000-$600,000 based on median home prices in this Montgomery County suburb as of 2023-2024. Furnishing costs typically range $15,000-$25,000 for a complete 2-3 bedroom home including furniture, bedding, kitchenware, and décor to create an attractive rental space. Initial setup costs including professional photography, listing creation, welcome materials, and basic supplies total around $2,000-$3,000. Montgomery County requires short-term rental permits and business licenses totaling approximately $500-$800, plus potential HOA approval fees. Insurance costs including landlord coverage and short-term rental protection average $2,500-$4,000 annually, so roughly $1,250-$2,000 for six months. Utilities including electricity, gas, water, internet, and cable typically cost $300-$500 monthly, totaling $1,800-$3,000 for six months. First six months operating costs including cleaning services ($100-$150 per turnover), maintenance reserves, property management software subscriptions, and marketing expenses add another $3,000-$5,000. Additional considerations include potential renovation costs for compliance with local regulations and creating separate entrances if required, which could add $10,000-$30,000 depending on property condition and local requirements.

Airbnb properties in Kensington, Maryland typically generate annual revenues between $25,000-$45,000 for entire homes and $15,000-$28,000 for private rooms, 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), utilities ($150-$300 monthly), property management (10-20% of revenue), insurance ($1,200-$2,500 annually), and maintenance costs ($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 (driving higher demand from business travelers), competitive pricing strategies, professional photography, rapid guest communication, and maintaining consistent 4.8+ star ratings. Properties within walking distance of the Kensington Metro station command premium rates, while those offering unique amenities like private parking, outdoor spaces, or family-friendly features see occupancy rates of 65-80% compared to the area average of 55-70%. The market benefits from year-round demand due to government contractors, tourists visiting nearby attractions, and families relocating to the DC metro area, though profitability can be significantly impacted by Montgomery County's short-term rental regulations and licensing requirements implemented in 2019.

Airbnb investments in Kensington, Maryland typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% based on current market conditions. Properties in this Washington D.C. suburb benefit from consistent demand from business travelers, government contractors, and tourists visiting the National Capital Region, with average daily rates of $120-180 depending on property size and amenities. Initial profitability usually occurs within 12-18 months after accounting for startup costs, furnishing, and marketing expenses. The proximity to Metro stations, downtown D.C. (approximately 30 minutes), and attractions like the National Institutes of Health campus drives occupancy rates of 65-75% annually. Investment properties in the $400,000-600,000 range typically generate $2,500-4,000 monthly gross revenue, with net profits of $1,200-2,200 after expenses including cleaning, utilities, insurance, and platform fees, making the timeframe to break even on initial investment approximately 4-6 years for cash purchases or 8-12 years for leveraged investments.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Kensington, 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 Airbnb acquisitions in Montgomery County, while Coldwell Banker Realty's investment division has helped clients identify profitable short-term rental opportunities in the Kensington area since 2019. 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 identification and management. Regional companies like DC Metro Property Group and Maryland Investment Realty specialize in multi-family and investment properties suitable for short-term rentals, while Vacasa and RedAwning provide property management services that help investors maximize their Airbnb returns in the Washington DC metro area including Kensington.