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 for approval. Find a suitable property in permitted zones such as single-family residential areas outside restricted university districts, considering properties near downtown, the Rattlesnake neighborhood, or areas with easy access to outdoor recreation since Missoula attracts visitors for activities like hiking, skiing, and fishing. Furnish the property with durable, comfortable furniture focusing on outdoor gear storage, high-speed internet for remote workers, and amenities that appeal to adventure travelers, budgeting approximately $15,000-25,000 for a complete 2-bedroom setup. Create your Airbnb listing with professional photos highlighting mountain views and proximity to attractions like Glacier National Park (2 hours away), Caras Park, and local breweries, setting competitive rates around $80-150 per night depending on size and location. For ongoing management, establish relationships with local cleaning services charging $75-100 per turnover, consider property management companies like Vacasa or RedAwning if you're not local, ensure compliance with Montana's 3% accommodations tax collection, and maintain responsive communication with guests while providing local recommendations for restaurants like The Pearl Cafe and outdoor outfitters.

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, parking, and outdoor spaces like decks or patios that appeal to both university visitors and outdoor enthusiasts. Analyze pricing using AirDNA and Mashvisor to benchmark against comparable properties, aiming for properties under $400,000 that can generate $150-200+ per night during peak seasons (summer months and university events). Research competition by studying existing Airbnb and VRBO listings within a 5-mile radius, identifying gaps in amenities or underserved areas, particularly focusing on properties that cater to families visiting students or outdoor recreation groups. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through Glacier Sotheby's International Realty or other Missoula-based brokerages, while monitoring University of Montana's academic calendar and local events like the Big Sky Conference tournaments to understand seasonal demand patterns that typically peak from May through September and during graduation periods.

To obtain an Airbnb/STR permit in Missoula, Montana, you must first apply through the City of Missoula 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, proof of liability insurance (minimum $500,000), contact information for a local responsible party within 30 minutes of the property, and a $150 annual license fee plus a $50 application processing fee. Missoula requires STRs to be owner-occupied or have the owner live within the city limits, maintain maximum occupancy of 2 people per bedroom plus 2 additional guests, provide adequate parking (1 space per bedroom), install smoke and carbon monoxide detectors, post the license number in all advertisements, and maintain a guest registry. The property must also comply with residential zoning requirements and cannot operate in areas zoned R1-43 without a conditional use permit. The application timeline typically takes 4-6 weeks for processing, and inspections may be required before approval. Once approved, the license must be renewed annually by December 31st, and operators must collect and remit the 3% local option tax on all bookings.

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 stricter rules in residential neighborhoods compared to commercial zones. The city has implemented occupancy limits, parking requirements, and noise ordinances specifically for STRs, while also requiring operators to provide contact information for a local representative available 24/7. Missoula has been actively updating its STR regulations around 2020-2023 to address community concerns about housing availability and neighborhood impacts, including potential caps on the number of permits issued in certain areas and enhanced enforcement mechanisms. Properties must meet safety standards and operators are required to collect and remit local taxes, with violations potentially resulting in permit revocation or fines.

The best Airbnb investment areas in Missoula, Montana include the University District near the University of Montana campus, which attracts consistent demand from visiting families, prospective students, and academic travelers year-round. Downtown Missoula offers excellent potential due to its proximity to restaurants, breweries, cultural venues like the Wilma Theatre, and the Clark Fork River, appealing to leisure tourists and business travelers. The Rattlesnake neighborhood is highly desirable for its upscale residential character, hiking trail access, and appeal to outdoor enthusiasts visiting for activities like fishing, hiking, and skiing at nearby Snowbowl. The Southgate Triangle area provides good value with growing development and easy access to both downtown and the airport, making it attractive for various traveler types. The historic Northside neighborhood offers charm and walkability to downtown attractions while maintaining lower property costs. These areas benefit from Missoula's position as a regional hub, its outdoor recreation economy, university events, and growing tech sector presence, with peak seasons during summer outdoor activities and university-related events throughout the academic year.

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% on lodging within city limits. These taxes are typically collected from guests at the time of booking and must be remitted monthly to the appropriate tax authorities - the Montana Department of Revenue for state taxes and Missoula County for local taxes. Airbnb may collect and remit some of these taxes automatically through their platform depending on current agreements with local jurisdictions, but hosts remain ultimately responsible for compliance. Properties rented for 30 days or longer are generally exempt from these lodging taxes as they're considered long-term rentals rather than transient accommodations. Hosts must register with the Montana Department of Revenue and obtain the necessary permits before operating, and failure to collect and remit these taxes can result in penalties and interest charges.

To start an Airbnb in Missoula, Montana, the total costs would be approximately $485,000-$535,000. Property purchase represents the largest expense at $400,000-$450,000 based on median home prices in the area as of 2023-2024. Furnishing costs typically range $15,000-$25,000 for a complete setup including beds, linens, kitchen essentials, living room furniture, and decor 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. Permits and fees vary but generally include business license ($100-$200), short-term rental permit ($300-$500), and potential HOA approvals. Insurance specifically for short-term rentals costs approximately $2,000-$3,000 annually, significantly higher than standard homeowner's insurance. Utilities including electricity, gas, water, internet, and cable average $300-$400 monthly or $1,800-$2,400 for six months. First six months operating costs encompass cleaning services ($150-$200 per turnover), maintenance reserves, restocking supplies, platform fees (3% of bookings), and marketing, totaling approximately $8,000-$12,000 depending on occupancy rates and property size.

Airbnb properties in Missoula, Montana typically generate annual revenues between $15,000-$35,000 for entire homes and $8,000-$18,000 for private rooms, with peak earnings during summer months (June-September) when University of Montana students and outdoor recreation tourists drive demand. Operating expenses generally range from 40-60% of gross revenue, including cleaning fees ($50-80 per turnover), property management (15-25% if outsourced), utilities ($150-250 monthly), insurance ($800-1,500 annually), and maintenance costs averaging $2,000-4,000 yearly. Properties near the university campus or downtown area achieve higher occupancy rates of 65-75% compared to 45-60% for suburban locations, with successful hosts like those operating renovated craftsman homes near Caras Park reporting net profit margins of 25-35% after all expenses. Key success factors include competitive pricing ($80-150 per night for whole homes), professional photography, responsive communication, and amenities targeting outdoor enthusiasts such as bike storage, hiking gear, and local activity guides, with properties offering unique Montana experiences or convenient university access consistently outperforming generic listings by 20-30% in both occupancy and nightly rates.

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 higher nightly rates of $80-150, while those in residential areas average $60-100 per night with occupancy rates of 65-75% annually. Initial investment costs range from $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, and business travelers, though seasonal fluctuations occur with peak performance during summer months (June-September) and university events, while winter months see reduced occupancy of 40-55%.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties in Missoula, Montana, providing market analysis and investment insights. Local real estate agents specializing in Airbnb investments include Berkshire Hathaway HomeServices Montana Properties, Windermere Real Estate, and Lambros Real Estate, with agents like those at Big Sky Country Realty offering specific short-term rental expertise since around 2018. National services include Mashvisor (launched 2014), which provides Airbnb analytics for Missoula properties, AirDNA (founded 2015) offering market data and revenue projections, and Awning (established 2019) providing full-service Airbnb investment management. RedAwning and Vacasa also serve the Missoula market with property management and investment advisory services, while local property management companies like Montana Property Management Group and Glacier Property Management have expanded into short-term rental services since approximately 2017. Investment-focused real estate firms such as Roofstock and Arrived Homes have included Missoula properties in their portfolios, and local mortgage brokers like First Security Bank of Missoula offer specialized financing for investment properties targeting the vacation rental market.