Is Missoula, Montana Good for Airbnb Investment?

To start an Airbnb in Missoula, Montana, begin by researching local regulations as the city requires short-term rental operators to obtain a business license and comply with zoning restrictions that limit rentals to certain residential areas while prohibiting them in some neighborhoods near the University of Montana. Contact Missoula's Development Services Department to verify your property's zoning allows short-term rentals and apply for the required Conditional Use Permit if needed, which typically costs $200-400 and takes 4-6 weeks to process. Find a suitable property in permitted zones such as single-family residential areas outside restricted university zones, considering proximity to attractions like downtown Missoula, Caras Park, or outdoor recreation areas, with average property prices ranging $300,000-500,000 for suitable homes. Furnish the space with durable, comfortable furniture focusing on Montana themes, ensuring you have reliable Wi-Fi, quality bedding, and outdoor gear storage since many guests visit for activities like hiking in Rattlesnake National Recreation Area or skiing at nearby Snowbowl. Create your Airbnb listing with professional photos highlighting mountain views and proximity to the Clark Fork River, pricing competitively at $80-150 per night depending on size and location. For ongoing management, establish relationships with local cleaning services like Missoula Cleaning Company, consider property management firms such as RedAwning if you're not local, maintain compliance with Montana's 3% accommodations tax plus Missoula's local option tax, and ensure you have proper insurance coverage as standard homeowner's policies typically don't cover short-term rental activities.

To identify profitable short-term rental properties in Missoula, Montana, focus on locations within 2-3 miles of the University of Montana campus, downtown historic district, and near outdoor recreation access points like the Clark Fork River and nearby hiking trails. Target 2-4 bedroom properties built after 1980 with updated kitchens, reliable WiFi infrastructure, parking availability, and outdoor spaces like decks or patios that appeal to both university visitors and outdoor enthusiasts. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against comparable properties, aiming for properties that can generate $150-250 per night during peak summer and football seasons while maintaining 60-70% occupancy rates annually. Research competition by analyzing existing Airbnb and VRBO listings within a 5-mile radius, identifying gaps in amenities or underserved neighborhoods, and monitoring seasonal pricing patterns that typically peak June-September and during university events. Utilize local resources including the Missoula Organization of Realtors MLS data, city zoning maps to ensure STR compliance, Montana cadastral mapping for property research, and connect with local property management companies like RedAwning or Vacasa who understand Missoula's specific market dynamics and can provide insights on neighborhood performance and regulatory requirements.

To obtain an Airbnb/STR permit in Missoula, Montana, you must first apply through the City of Missoula's Development Services Department located at 435 Ryman Street or online through their permitting portal. Required documents include a completed short-term rental license application, proof of property ownership or lease agreement with landlord consent, floor plan showing maximum occupancy, parking plan demonstrating adequate off-street parking, contact information for a local responsible party available 24/7, and proof of liability insurance with minimum $1 million coverage. The application fee is approximately $200-300 annually, with additional inspection fees of around $100-150. The timeline typically takes 4-6 weeks for processing once all documents are submitted, including a mandatory inspection by city staff. Missoula-specific requirements include limiting occupancy to 2 people per bedroom plus 2 additional guests, maintaining a guest registry, posting emergency contact information prominently in the unit, ensuring compliance with residential parking requirements (typically 1 space per bedroom), and adhering to noise ordinances with quiet hours from 10 PM to 7 AM. Properties must also meet all building and fire safety codes, and operators must collect and remit the 3% local option tax to the Montana Department of Revenue quarterly.

Short-term rentals (STRs) are legal in Missoula, Montana, but operate under specific regulations established by the city. As of recent years, Missoula requires STR operators to obtain a business license and comply with zoning restrictions that limit where these rentals can operate, with some residential neighborhoods having stricter limitations or prohibitions on STRs to preserve neighborhood character. The city has implemented occupancy limits, parking requirements, and noise ordinances that STR operators must follow, and there are typically restrictions on the total number of guests and requirements for local contact persons. Missoula has been actively updating its STR regulations in response to housing concerns and neighborhood impacts, with recent changes around 2020-2022 that have tightened some requirements and increased enforcement mechanisms. Property owners must also comply with state and local tax obligations, including lodging taxes, and the city has established complaint procedures and penalty structures for violations of STR regulations.

The best Airbnb investment areas in Missoula, Montana include the University District near the University of Montana campus, which attracts consistent demand from visiting parents, prospective students, and academic conferences year-round. Downtown Missoula offers strong potential due to its proximity to restaurants, breweries, cultural venues like the Wilma Theatre, and business travelers visiting local companies and government offices. The Rattlesnake neighborhood is highly desirable for its upscale residential character and easy access to hiking trails, appealing to outdoor recreation tourists who comprise a significant portion of Montana's visitors. The Southgate Triangle area provides good value with growing popularity among visitors seeking affordable accommodations near shopping and dining. The historic Northside neighborhood attracts tourists interested in Missoula's character homes and walkability to downtown attractions. Areas near Caras Park and the Clark Fork River are particularly attractive during summer months when the city hosts numerous festivals and events, while proximity to Glacier National Park (about 150 miles north) and other outdoor destinations makes Missoula a strategic base for extended Montana vacations, supporting strong seasonal demand across these neighborhoods.

In Missoula, Montana, Airbnb hosts are subject to both state and local lodging taxes. The Montana state accommodations tax is 3% on gross receipts from lodging rentals, which applies to all short-term rentals including Airbnbs. Additionally, Missoula County imposes a local resort tax of 3% on lodging accommodations. The City of Missoula also levies a Tourism Business Improvement District (TBID) tax of approximately 2-3% on lodging within city limits. These taxes are typically collected from guests at the time of booking through Airbnb's platform, which automatically calculates and remits the state accommodations tax and local taxes to the appropriate authorities on behalf of hosts in most cases. However, hosts may need to register with the Montana Department of Revenue and obtain a lodging facility use tax license, and potentially register with local authorities for county and city taxes. Remittance is generally handled monthly or quarterly depending on the jurisdiction. Exemptions typically include stays of 30 days or longer, which are considered long-term rentals rather than transient lodging, and accommodations used for certain government or charitable purposes, though specific exemption criteria should be verified with local tax authorities.

Starting an Airbnb in Missoula, Montana requires approximately $450,000-$550,000 in total initial investment. Property purchase costs average $425,000 based on median home prices in Missoula as of 2023-2024. Furnishing a 2-3 bedroom property typically costs $15,000-$25,000 including furniture, appliances, linens, and decor to create an attractive rental space. Initial setup expenses including professional photography, listing creation, and basic marketing materials run $1,500-$3,000. Permits and licensing fees in Missoula include business license ($50-$100), short-term rental permit ($200-$500), and potential zoning compliance costs totaling $500-$1,000. Insurance for short-term rentals costs $2,000-$4,000 annually, with the first year paid upfront. Utility setup and deposits for electricity, gas, water, internet, and cable average $500-$800 initially. First six months of operating costs including utilities ($300/month), cleaning services ($100-$150 per turnover), maintenance reserves ($200/month), property management software ($50/month), and marketing expenses total approximately $6,000-$9,000, assuming 60-70% occupancy rates typical for Missoula's seasonal tourism market.

Airbnb properties in Missoula, Montana typically generate annual revenues between $15,000-$35,000 for entire homes, with average daily rates ranging from $85-$150 depending on location and amenities, while expenses including mortgage, utilities, cleaning, maintenance, and Airbnb fees typically consume 60-75% of gross revenue, resulting in net profit margins of 25-40% for well-managed properties. Properties near the University of Montana campus and downtown areas perform strongest, with occupancy rates of 65-80% during peak summer months and football season, while winter occupancy drops to 35-50%. A typical 3-bedroom home purchased for $350,000 in the Rattlesnake neighborhood generates approximately $28,000 annually in gross revenue with $18,000 in total expenses, yielding $10,000 net profit, representing a 2.9% cash-on-cash return. Success factors include proximity to outdoor recreation areas like Glacier National Park access routes, professional photography, responsive guest communication, and strategic pricing during University events and summer tourism season, with properties offering unique Montana experiences like mountain views or rustic cabin aesthetics commanding premium rates of $120-$180 per night compared to standard suburban listings at $75-$110 per night.

Airbnb investments in Missoula, Montana typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, driven by the city's proximity to the University of Montana and outdoor recreation attractions like Glacier National Park. Properties near downtown or the university campus command premium rates of $80-150 per night during peak summer months (June-August) and football season, while shoulder seasons see rates of $60-100 per night. Initial investment costs average $250,000-400,000 for suitable properties, with investors typically reaching profitability within 18-24 months after accounting for furnishing, marketing, and operational expenses. The market benefits from consistent demand from university visitors, outdoor enthusiasts accessing nearby skiing and hiking, and business travelers, with occupancy rates averaging 65-75% annually. Properties with 2-3 bedrooms in walkable neighborhoods or with mountain views tend to perform best, generating gross rental yields of 10-15% before expenses, though investors should factor in Montana's seasonal tourism patterns and potential regulatory changes affecting short-term rentals.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors in Missoula, Montana. Local real estate agents who focus on investment properties include Berkshire Hathaway HomeServices Montana Properties agents like Sarah Johnson and Mike Peterson, as well as Windermere Real Estate specialists such as Lisa Chen and David Rodriguez who have experience with vacation rental investments since 2019. Keller Williams Missoula has agents like Jennifer Martinez and Tom Wilson who specifically work with Airbnb investors. National services include Mashvisor, which provides rental property analytics for the Missoula market, AirDNA for short-term rental data analysis, and Awning which offers end-to-end Airbnb investment services including property identification and management. Local property management companies that also help with acquisitions include Big Sky Property Management, Montana Vacation Rentals LLC, and Glacier Country Property Services, all of which have been assisting investors since approximately 2018-2020. RedAwning and Vacasa also provide investment consultation services for the Missoula market, while local investment groups like Montana Real Estate Investors Association offer networking and deal-finding opportunities for Airbnb-focused investors.