Is Miles City, Montana Good for Airbnb Investment?

To start an Airbnb in Miles City, Montana, begin by researching local zoning laws and regulations through the Miles City Planning Department, as Montana generally allows short-term rentals but individual municipalities may have specific requirements including business licenses, occupancy limits, and safety standards. Contact Custer County for any county-level permits and the Montana Department of Revenue for state tax registration, as you'll need to collect and remit Montana's 3% accommodations tax plus any local taxes. Find a suitable property by searching residential areas near downtown Miles City or properties with easy access to attractions like the Range Riders Museum, ensuring the location allows short-term rentals under current zoning. Purchase essential furnishings including quality mattresses, linens, towels, basic kitchen appliances, Wi-Fi equipment, and safety items like smoke detectors and fire extinguishers, while considering the area's appeal to travelers visiting for fishing, hunting, or historical tourism. Create your listing on Airbnb with professional photos highlighting unique Montana features, competitive pricing around $75-120 per night based on local market rates, and detailed descriptions emphasizing proximity to the Yellowstone River and local attractions. Manage your property by establishing cleaning protocols between guests, maintaining responsive communication, providing local recommendations for dining at places like the Historic Olive Hotel or outdoor activities, and ensuring compliance with ongoing tax obligations and any evolving city regulations specific to Miles City's tourism industry.

To identify profitable short-term rental properties in Miles City, Montana, focus on locations within walking distance of downtown attractions like the Range Riders Museum, near the Yellowstone River for outdoor recreation access, or close to Miles Community College for visiting families and events. Target 2-4 bedroom single-family homes or historic properties built between 1900-1950 that offer authentic Western charm, with essential features including reliable Wi-Fi, full kitchens, parking, and outdoor spaces like patios or fire pits that appeal to tourists exploring eastern Montana. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against the limited existing STR inventory, aiming for nightly rates between $80-150 depending on property size and amenities, while researching competition through Airbnb and VRBO searches revealing approximately 10-20 active listings in the area. Utilize STR-specific tools like Rabbu and AllTheRooms for market analysis, monitor local events through the Miles City Chamber of Commerce website and Bucking Horse Sale schedules that drive seasonal demand spikes, and leverage Zillow and Realtor.com to identify undervalued properties under $200,000 that can be converted to profitable rentals serving hunters, anglers, road trippers on I-94, and visitors to nearby attractions like Makoshika State Park.

To obtain an Airbnb/STR permit in Miles City, Montana, contact the Miles City Planning Department at City Hall located at 12 North 10th Street or call (406) 874-8095 to begin the application process. You'll need to submit a completed short-term rental application form, provide proof of property ownership or lease agreement, submit a site plan showing the property layout, obtain liability insurance with minimum $1 million coverage, and provide contact information for a local property manager if you're not residing locally. Required documents include a valid Montana business license, fire safety inspection certificate, and neighbors notification affidavit. The application fee is approximately $150-200 with an annual renewal fee of $75-100. The approval timeline typically takes 4-6 weeks after submitting a complete application. Miles City specific requirements include maintaining occupancy limits based on bedroom count (maximum 2 guests per bedroom plus 2 additional), providing adequate parking spaces (minimum 1 space per bedroom), ensuring compliance with residential zoning restrictions, maintaining a guest registry, and responding to noise or disturbance complaints within 2 hours. You must also display the permit number in all advertising and maintain the property according to International Property Maintenance Code standards.

Short-term rentals (STRs) are generally legal in Miles City, Montana, as the city has not enacted specific prohibitions against vacation rentals or short-term accommodations. Montana state law allows local municipalities to regulate STRs, and Miles City appears to treat short-term rentals similarly to other residential uses, though operators must comply with standard business licensing requirements and zoning regulations that apply to residential areas. The city requires STR operators to obtain a business license and ensure compliance with health and safety codes, fire safety requirements, and occupancy limits based on the property's zoning designation. There are no specific prohibited areas for STRs within Miles City limits, though properties must conform to existing residential zoning restrictions and cannot violate homeowners association rules where applicable. Recent legal changes have been minimal, with the city maintaining a relatively permissive approach compared to larger Montana cities like Bozeman or Missoula, which have implemented more restrictive STR regulations in response to housing concerns, and Miles City continues to allow STRs as long as they meet basic business operation and safety standards established around 2019-2020.

The best areas for Airbnb investment in Miles City, Montana are the Historic Downtown District near Main Street, which attracts visitors to the Range Riders Museum and annual Bucking Horse Sale event each May, and the neighborhoods surrounding the Tongue River and its recreational areas, appealing to fishing and outdoor enthusiasts year-round. The area near Miles Community College draws business travelers, visiting families, and event attendees, while properties close to the Eastern Montana Fairgrounds benefit from the county fair and various events throughout the year. The residential areas along Pleasant Street and near Wibaux Park offer quiet, family-friendly accommodations for tourists exploring the region's ranching heritage and accessing nearby attractions like Makoshika State Park in Glendive, with these locations providing good value due to lower property costs while still offering convenient access to Miles City's main attractions and the growing agritourism market in southeastern Montana.

In Miles City, Montana, Airbnb hosts 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. Additionally, hosts must collect Montana's 4% state sales tax on lodging services. Custer County may impose a local option tax of up to 3% on lodging facilities, though the specific rate varies by jurisdiction. These taxes are typically collected directly from guests at the time of booking through Airbnb's automated tax collection system for the state portion, while local taxes may require manual collection and remittance by the host. Hosts must register with the Montana Department of Revenue and file monthly returns by the 15th of the following month, remitting collected taxes along with required documentation. Exemptions generally apply to stays of 30 days or longer, which are considered long-term rentals rather than transient lodging, and certain government or nonprofit organization bookings may qualify for exemptions with proper documentation.

Starting an Airbnb in Miles City, Montana requires approximately $180,000-220,000 in total initial investment. Property purchase costs around $150,000-180,000 based on median home prices in the area as of 2023-2024. Furnishing a 2-3 bedroom property typically runs $15,000-25,000 including beds, linens, kitchen essentials, living room furniture, and basic appliances. Initial setup costs including professional photography, listing creation, and basic renovations average $3,000-5,000. Permits and fees in Montana generally range $500-1,500 depending on local regulations and business license requirements. Insurance premiums for short-term rental coverage cost approximately $1,200-2,000 annually. Utility deposits and connections for electricity, water, gas, internet, and cable total around $800-1,200. First six months of operating costs including utilities ($600-900 monthly), cleaning services ($100-150 per turnover), supplies and maintenance ($200-400 monthly), and platform fees (3% of bookings) typically amount to $6,000-10,000, assuming moderate occupancy rates of 40-60% during the initial period.

Airbnb properties in Miles City, Montana typically generate modest returns with average daily rates ranging from $75-120 during peak summer months and $50-80 in winter, resulting in annual revenues of $15,000-25,000 for well-managed properties with 60-70% occupancy rates. Operating expenses including cleaning fees ($30-50 per turnover), utilities ($150-200 monthly), property management (15-25% of revenue), insurance ($800-1,200 annually), and maintenance ($2,000-3,500 yearly) typically consume 45-60% of gross revenue. Properties near the Yellowstone River or historic downtown Miles City command premium rates, with some investors like those operating renovated railroad worker homes reporting net profit margins of 15-25% after mortgage payments. Success factors include proximity to Custer County fairgrounds during events, catering to oil field workers seeking monthly stays, and targeting hunters during fall seasons when rates can spike to $150+ nightly. A typical 3-bedroom property purchased for $180,000-220,000 and generating $20,000 annual revenue with $12,000 in expenses yields approximately $8,000 net income before taxes and debt service, representing a 4-5% cash-on-cash return for leveraged investments, making Miles City a moderate but stable market for Airbnb investments compared to Montana's more tourist-heavy destinations.

Airbnb investments in Miles City, Montana typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, primarily driven by the area's proximity to outdoor recreation areas and seasonal tourism related to hunting, fishing, and Makoshika State Park visitors. Properties generally reach profitability within 18-24 months, with average daily rates of $85-120 depending on property size and amenities, occupancy rates averaging 45-60% annually with peak seasons during summer months and hunting season. The lower property acquisition costs in Miles City, typically ranging from $150,000-250,000 for suitable investment properties, combined with relatively modest operating expenses, create favorable conditions for investors, though the seasonal nature of tourism and limited year-round demand can impact consistency of returns compared to larger Montana markets like Bozeman or Missoula.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Miles City, Montana. Local real estate agents like Century 21 Big Sky Real Estate and Stockman Bank Real Estate Services have experience with investment properties in the Miles City area and understand the local vacation rental market dynamics. National services including Mashvisor, AirDNA, and Rabbu provide market analysis and property identification tools for Airbnb investments in smaller Montana markets like Miles City. BiggerPockets marketplace and Roofstock occasionally feature Montana investment properties, while local property management companies such as High Plains Property Management can assist with both acquisition and ongoing rental management. Real estate investment firms like HomeVestors and local Montana-based investment groups often have connections to profitable rental properties in eastern Montana markets, and vacation rental consultants like RedAwning and Vacasa provide market entry services for new Airbnb investors targeting the Miles City region.