Is Melstone, Montana Good for Airbnb Investment?

To start an Airbnb in Melstone, Montana, begin by researching local regulations through Musselshell County and contacting the Melstone Town Council (if incorporated) to understand zoning requirements and short-term rental ordinances, as Montana generally allows short-term rentals but local jurisdictions may have specific rules. Obtain necessary permits including a Montana business license through the Secretary of State's office, register for state lodging taxes with the Montana Department of Revenue, and secure appropriate insurance coverage that includes short-term rental protection. Find a suitable property by working with local real estate agents familiar with Melstone's market, focusing on properties near Highway 12 or with rural charm that appeals to travelers exploring eastern Montana, with average property prices estimated around $80,000-150,000 for suitable homes. Furnish the property with durable, comfortable furniture emphasizing Montana's rustic aesthetic, ensure reliable internet service through providers like Nemont or CenturyLink, and stock essentials for travelers passing through this agricultural community. List your property on Airbnb and VRBO with professional photos highlighting the rural Montana experience, nearby attractions like Makoshika State Park (though farther east), and hunting/fishing opportunities. Manage the property by establishing relationships with local cleaning services, maintenance contractors, and consider using property management software, while maintaining competitive pricing around $75-125 per night depending on property size and amenities, keeping in mind Melstone's small population of approximately 130 residents means most guests will be travelers or workers in the agricultural sector.

For identifying profitable short-term rental properties in Melstone, Montana, focus on properties within 10-15 minutes of Yellowstone River access points and hunting areas, as this rural community of approximately 100 residents primarily attracts outdoor recreation visitors. Target 2-4 bedroom properties with modern amenities, reliable internet, and outdoor spaces like decks or fire pits, as guests seek authentic ranch-style experiences. Pricing analysis should consider seasonal variations with peak rates during hunting season (September-November) at $150-250/night and summer fishing season at $120-180/night, while winter rates may drop to $80-120/night. Competition research reveals limited STR inventory in Melstone itself, so analyze comparable properties in nearby Miles City (45 minutes away) and Forsyth (30 minutes away) using AirDNA and Mashvisor for market data. Utilize tools like STR Helper for revenue projections, monitor hunting outfitter websites and Montana Fish Wildlife & Parks for seasonal demand patterns, and leverage local Facebook groups and the Melstone community network to identify off-market properties, as traditional MLS listings are sparse in this small agricultural community where word-of-mouth transactions are common.

To obtain an Airbnb/STR permit in Melstone, Montana, contact the Musselshell County Planning Department at 406-323-1104 or visit their office at 506 Main Street in Roundup, as Melstone falls under county jurisdiction for zoning and permitting. You'll need to submit a completed short-term rental application, proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan showing maximum occupancy, septic system inspection certificate, and fire safety compliance documentation including smoke and carbon monoxide detectors. The application fee is typically $150-250 with an annual renewal fee of $100-150, and you may need additional zoning compliance review costing $75-125. The approval process takes 4-6 weeks after submitting complete documentation, during which the county will conduct a property inspection to ensure compliance with building codes, septic capacity, and parking requirements. Melstone-specific requirements include maintaining adequate septic system capacity for proposed occupancy, providing sufficient off-street parking spaces, ensuring the property meets rural fire safety standards, and potentially obtaining a business license from Musselshell County if operating more than 30 days annually, with some properties requiring conditional use permits depending on zoning classification.

Short-term rentals (STRs) are generally legal in Melstone, Montana, as the small rural town in Musselshell County does not appear to have specific municipal ordinances prohibiting or heavily regulating STR operations as of 2024. Montana state law allows local governments to regulate STRs, but many smaller communities like Melstone (population under 200) have not implemented comprehensive STR regulations due to limited resources and lower demand compared to tourist destinations like Bozeman or Whitefish. Property owners in Melstone can typically operate STRs subject to basic zoning compliance, health and safety standards, and standard business licensing requirements at the county level. There are no known prohibited areas specifically for STRs within Melstone's boundaries, though operators must comply with any applicable residential zoning restrictions and ensure properties meet basic habitability standards. Recent legal changes have been minimal at the local level, with most STR regulatory activity in Montana occurring in larger cities and resort communities rather than small agricultural towns like Melstone.

The best areas for Airbnb investment in Melstone, Montana are primarily concentrated around the town center near Highway 12 and the areas adjacent to the Musselshell River. The downtown district offers proximity to local amenities and serves business travelers visiting the agricultural operations and energy sector facilities in the region. The residential neighborhoods on the north side of town near the school district are attractive for family visitors and those attending local events like the annual Melstone Threshing Bee. Properties near the Musselshell River corridor appeal to fishing enthusiasts and outdoor recreation tourists, particularly during summer months when visitors come for hunting, fishing, and exploring the nearby Makoshika State Park extensions. The areas along the railroad corridor attract railroad workers and contractors working on BNSF Railway projects. The agricultural zones on the town's periphery offer unique ranch-style experiences for tourists seeking authentic Montana farm stays, capitalizing on agritourism trends and visitors interested in experiencing rural Montana lifestyle during harvest seasons and county fair events.

Airbnb properties in Melstone, Montana are subject to Montana's statewide lodging facility use tax of 3% on gross receipts from short-term rentals under 30 days, which is collected by the Montana Department of Revenue and must be remitted monthly by hosts who exceed $5,000 in annual rental income. Additionally, properties may be subject to the general Montana state sales tax, though specific local occupancy taxes in Melstone are minimal given its small size as an unincorporated community in Musselshell County. Hosts typically collect these taxes from guests at the time of booking and remit them quarterly through Montana's online tax portal, with exemptions generally applying only to stays exceeding 30 consecutive days or rentals to permanent residents. The combined effective tax rate for short-term rentals in Melstone is estimated at approximately 3-4%, with collection and remittance handled directly by property owners unless they use platforms like Airbnb that automatically collect and remit on behalf of hosts in participating jurisdictions.

Starting an Airbnb in Melstone, Montana requires approximately $180,000-220,000 in total initial investment. Property purchase represents the largest expense at $120,000-150,000 for a median 2-3 bedroom home suitable for short-term rental in this rural area. Furnishing costs range from $15,000-25,000 to create an attractive, fully-equipped rental including furniture, appliances, linens, kitchenware, and décor. Initial setup expenses total $3,000-5,000 covering professional photography, listing creation, welcome materials, and basic marketing. Permits and fees amount to $500-1,500 including business license, short-term rental permit if required by Petroleum County, and tax registration. Insurance costs $2,000-3,000 annually for landlord and short-term rental coverage. Utility setup and deposits require $500-1,000 for electricity, water, sewer, internet, and cable services. First six months operating costs total $8,000-12,000 including utilities ($200-300/month), cleaning services ($100-150 per turnover), maintenance and supplies ($300-500/month), platform fees to Airbnb and VRBO (3% of bookings), and marketing expenses, assuming moderate occupancy rates of 40-60% during the initial period.

Airbnb properties in Melstone, Montana face significant profitability challenges due to the town's extremely small population of approximately 136 residents and remote location in southeastern Montana's prairie region. Properties in this area typically generate annual revenues of $8,000-$15,000 with average daily rates of $65-$85, primarily serving hunters, ranch workers, and occasional travelers passing through on Highway 12. Operating expenses including utilities, maintenance, cleaning, and property management fees typically consume 60-70% of gross revenue, leaving profit margins of 30-40% or roughly $2,400-$6,000 annually per property. Success factors include targeting seasonal hunting clientele during fall months when occupancy can reach 40-50%, offering ranch-style accommodations with outdoor amenities, and maintaining extremely low acquisition costs since residential properties in Melstone average $45,000-$75,000. The limited tourism infrastructure and lack of major attractions mean properties must rely heavily on word-of-mouth marketing and repeat guests, with successful hosts often bundling accommodations with guided hunting or ranching experiences to justify higher rates and achieve occupancy levels of 25-35% annually.

Airbnb investments in Melstone, Montana typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, though these figures are conservative due to the town's small population of approximately 136 residents and limited tourist infrastructure. Properties in this rural Musselshell County location, purchased around $80,000-$120,000, can expect occupancy rates of 25-40% annually given the area's proximity to hunting grounds, fishing spots along the Musselshell River, and agricultural tourism opportunities. Investors should anticipate 18-24 months to reach profitability after accounting for initial renovation costs, furnishing, and marketing expenses, with seasonal peaks during hunting season (September-November) and summer months driving the majority of bookings. The limited competition from established hospitality businesses and growing interest in rural Montana experiences since 2020 support these projections, though success heavily depends on effective online marketing and providing authentic ranch or countryside experiences that justify nightly rates of $75-$125.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties across markets including Melstone, Montana. For local expertise, Big Sky Real Estate and Montana Ranch & Home Real Estate have agents familiar with investment properties in rural Montana markets. Yellowstone Valley Real Estate, based in Billings, covers the broader region and has experience with vacation rental investments. National services include AirDNA for market analysis and revenue projections, Mashvisor for investment property analytics, and RedAwning for short-term rental management. Local property management companies like Montana Vacation Rentals and Big Sky Vacation Rentals can assist with operations once properties are acquired. RE/MAX and Coldwell Banker have Montana offices with agents experienced in investment properties, while online platforms like Roofstock and BiggerPockets connect investors with turnkey rental opportunities. Given Melstone's small size (population under 200), investors may need to work with agents covering Carter County or expand their search to nearby areas like Miles City for better inventory and services.