Is Molalla, Oregon Good for Airbnb Investment?

To start an Airbnb in Molalla, Oregon, begin by researching local regulations through Clackamas County and the City of Molalla, as short-term rentals typically require a business license and may need conditional use permits depending on zoning (residential properties often need special approval). Contact Molalla City Hall at 503-829-6855 to understand specific permit requirements, which likely include a transient lodging tax registration and compliance with fire safety codes. Find a suitable property by searching residential areas near downtown Molalla or properties with easy access to the Molalla River recreation areas, ensuring the zoning allows short-term rentals. Obtain necessary permits including a business license ($50-100 estimated), transient lodging permit, and potentially a conditional use permit ($200-500 estimated) if required by zoning. Furnish the property with quality basics including comfortable beds, kitchen essentials, Wi-Fi, and local amenities information, focusing on outdoor recreation themes given Molalla's proximity to hiking and river activities. List your property on Airbnb and other platforms like VRBO, highlighting nearby attractions such as the Molalla River State Park and proximity to Portland (30 miles). Manage the property by establishing cleaning protocols, guest communication systems, and compliance with Oregon's 1.8% transient lodging tax collection, while maintaining good relationships with neighbors and staying current with any evolving city regulations regarding short-term rentals.

To identify profitable short-term rental properties in Molalla, Oregon, focus on properties within 10-15 minutes of outdoor recreation areas like the Molalla River or Cascade foothills, as this rural community attracts visitors seeking nature experiences and proximity to Portland (30 miles north). Target 2-4 bedroom homes with rustic or farmhouse appeal, outdoor spaces, fire pits, and parking for multiple vehicles, as guests often come in groups for fishing, hiking, or agritourism activities. Analyze pricing by researching comparable STRs in nearby Canby, Oregon City, and rural Clackamas County areas, expecting average daily rates of $80-150 depending on property size and amenities, with higher rates during summer months and harvest seasons. Competition research should include monitoring existing Airbnb and VRBO listings within a 15-mile radius, noting occupancy patterns and guest reviews to identify service gaps. Utilize AirDNA for market data specific to Clackamas County, Mashvisor for investment analysis, and local resources like the Molalla Chamber of Commerce for tourism trends, while considering proximity to events at the Molalla Buckeroo rodeo and seasonal agricultural activities that drive demand in this semi-rural market.

To obtain an Airbnb/STR permit in Molalla, Oregon, you must first contact the Molalla City Hall at 117 N Molalla Avenue or call (503) 829-6855 to inquire about their specific short-term rental ordinance and application process, as requirements were established around 2019-2020. You'll typically need to submit a completed STR permit application, proof of property ownership or authorization letter from owner, a site plan showing parking and emergency egress, proof of liability insurance (usually $1 million minimum), a good neighbor agreement outlining house rules, and payment of application fees (estimated $200-400 initially plus annual renewal fees of $100-200). Required documents also include a business license from the city, compliance with fire safety codes, and potentially a septic system inspection if not on city sewer. The property must meet specific requirements including adequate parking (typically 1 space per bedroom), compliance with residential zoning, maximum occupancy limits based on bedrooms and square footage, and 24/7 local contact information for guests. The approval timeline is generally 30-60 days after submitting a complete application, and you must also register with the Oregon Department of Revenue for transient lodging tax collection and remit both state and local lodging taxes, with Molalla's local rate typically around 8-10% combined with state taxes.

Short-term rentals (STRs) in Molalla, Oregon operate under a complex regulatory framework that has evolved significantly since 2019. The city allows STRs but requires operators to obtain a business license and comply with specific zoning restrictions, limiting them primarily to residential zones with owner-occupancy requirements for properties in certain districts. STRs are generally prohibited in multi-family residential areas and must maintain occupancy limits of no more than 8 guests, with parking requirements of one space per bedroom plus one additional space. Recent changes implemented in 2021-2022 include stricter noise ordinances, mandatory 24-hour contact information for a responsible party, and enhanced penalties for violations including potential license revocation. The city also requires STR operators to collect and remit transient lodging taxes, and properties must pass safety inspections including smoke and carbon monoxide detector requirements. Molalla's regulations are more restrictive than some neighboring jurisdictions, reflecting community concerns about housing availability and neighborhood character, with the city council conducting periodic reviews of the ordinance to address ongoing issues related to enforcement and community impact.

The most promising Airbnb investment areas in Molalla, Oregon include the Historic Downtown District along Main Street, which attracts visitors interested in the city's pioneer heritage and annual events like the Molalla Buckeroo Rodeo (established 1913), and properties near the Molalla River corridor, popular with outdoor enthusiasts for fishing, kayaking, and camping access to nearby Mount Hood National Forest. The Feyrer Park vicinity offers appeal for families visiting the area's recreational facilities and attending youth sports tournaments, while properties along Highway 211 provide convenient access for business travelers working with local timber companies like Stimson Lumber Company and agricultural operations. The residential areas near Molalla High School and the community college campus attract visitors for graduation ceremonies, sporting events, and educational conferences, while the outskirts toward the Cascade foothills appeal to guests seeking rural retreats with mountain views and proximity to hiking trails, berry picking, and agritourism activities at local farms and vineyards.

In Molalla, Oregon, Airbnb hosts are subject to Oregon's statewide transient lodging tax of 1.8% on gross rental receipts, which applies to stays of less than 30 consecutive days. Clackamas County, where Molalla is located, imposes an additional transient lodging tax of 6% on short-term rental accommodations. The City of Molalla does not currently impose a separate lodging tax beyond the county and state requirements. These taxes are typically collected from guests at the time of booking through Airbnb's platform, which automatically calculates and remits the Oregon state tax directly to the Oregon Department of Revenue on behalf of hosts who have opted into their collection service. For the Clackamas County tax, hosts may need to register separately with the county and remit payments quarterly, though Airbnb has been expanding its automatic collection services to include more local jurisdictions. 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 Molalla, Oregon requires approximately $380,000-$420,000 in total initial investment. Property purchase costs around $350,000 based on median home prices in the area as of 2023. Furnishing a 2-3 bedroom property typically runs $15,000-$25,000 including beds, linens, kitchen essentials, living room furniture, and décor. Initial setup costs including professional photography, listing creation, and basic renovations total approximately $3,000-$5,000. Permits and fees in Clackamas County include business license ($50-$100), short-term rental permit ($200-$500), and potential HOA approvals. Insurance for short-term rentals costs $1,200-$2,000 annually, requiring specialized coverage beyond standard homeowner's policies. Utility setup and deposits for electricity, water, sewer, garbage, internet, and cable run $500-$800 initially, with monthly costs of $200-$350. First six months of operating expenses including utilities ($1,200-$2,100), cleaning services ($1,800-$3,000), maintenance reserves ($1,000), marketing ($500), and property management software ($300-$600) total approximately $4,800-$7,700, bringing the complete startup investment to roughly $380,000-$420,000 depending on property condition and furnishing choices.

Airbnb properties in Molalla, Oregon typically generate annual revenues between $15,000-$35,000 for entire homes, with average daily rates ranging from $80-$150 depending on property size and amenities. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($30-50 per turnover), property management (10-20% if outsourced), utilities ($150-300 monthly), insurance ($1,200-2,000 annually), and maintenance costs averaging $2,000-4,000 yearly. Properties within 5 miles of the Molalla River or offering rural retreat experiences command premium rates, with some hosts reporting 65-75% occupancy rates during peak summer months (June-September) and 35-45% during winter. A typical 3-bedroom home purchased for $400,000 in 2022 might generate $28,000 annually while incurring $16,000 in expenses, yielding a 3% net return before mortgage considerations. Success factors include proximity to outdoor recreation areas like Silver Falls State Park (30 minutes away), professional photography, responsive communication, and targeting Portland metro visitors seeking weekend escapes, with the most profitable properties being those that differentiate through unique amenities like hot tubs, fire pits, or farm experiences that justify rates 20-30% above standard accommodations.

Based on Molalla, Oregon market conditions, Airbnb investments typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14% depending on property type and location within the city. Properties near the Molalla River or downtown area command higher nightly rates of $85-120, while suburban properties average $65-95 per night with occupancy rates of 60-75% annually. Initial investment recovery and profitability generally occurs within 18-24 months, with vacation rental management companies like Vacasa and RedAwning reporting strong performance in the Portland metro area including Molalla. The market benefits from proximity to outdoor recreation areas and reasonable property acquisition costs averaging $350,000-450,000 for suitable rental properties, making it attractive compared to Portland's saturated market while still capturing overflow demand from the larger metropolitan area.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for Airbnb investors in Molalla, Oregon, offering comprehensive market analysis and property recommendations. Local real estate agents serving the Molalla area include Windermere Realty Trust, Keller Williams Realty, and RE/MAX Equity Group, with agents like those at Century 21 and Coldwell Banker also having expertise in investment properties in Clackamas County. National services that assist Airbnb investors include Mashvisor, which provides rental property analytics, AirDNA for short-term rental market data, and Roofstock for turnkey rental properties, though their Molalla inventory may be limited. Local property management companies such as RedAwning and Vacasa can help investors manage their Airbnb properties once purchased, while investment-focused firms like BiggerPockets connects investors with local professionals. Regional companies serving the Portland metro area, including Molalla, include Portlandia Properties and Pacific Northwest investment specialists who understand the rural vacation rental market dynamics in areas approximately 30 miles south of Portland.