Is Red Lodge, Montana Good for Airbnb Investment?

To start an Airbnb in Red Lodge, Montana, begin by researching local regulations through Carbon County and the City of Red Lodge, as Montana generally allows short-term rentals but local jurisdictions may have specific requirements including business licenses, zoning compliance, and potential occupancy limits. Obtain necessary permits by contacting Red Lodge City Hall for a business license (typically $25-50 annually) and ensure your property meets fire safety codes and building requirements, while also registering for Montana state taxes and obtaining liability insurance. Find a suitable property in Red Lodge's residential areas or near ski resorts, considering proximity to Red Lodge Mountain Resort and downtown attractions, with purchase prices ranging from $300,000-800,000 depending on size and location. Furnish the property with mountain-themed decor, essential amenities like high-speed internet, heating systems suitable for Montana winters, quality bedding, kitchen supplies, and outdoor gear storage, budgeting approximately $15,000-30,000 for complete furnishing. List your property on Airbnb, VRBO, and Booking.com with professional photography highlighting Red Lodge's outdoor recreation access, competitive pricing ($100-300/night depending on season and property size), and detailed descriptions emphasizing proximity to Yellowstone National Park (60 miles), skiing, hiking, and fishing opportunities. Manage your Airbnb by implementing efficient check-in procedures, maintaining consistent cleaning standards, responding promptly to guest inquiries, coordinating with local cleaning services and maintenance providers, and adjusting pricing seasonally to maximize occupancy during peak summer and winter tourism periods while ensuring compliance with Montana's 4% accommodation tax and any local lodging taxes.

To identify profitable short-term rental properties in Red Lodge, Montana, focus on locations within walking distance of Main Street's restaurants and shops, or properties offering mountain views and easy access to Red Lodge Mountain ski resort and Beartooth Highway. Target 2-4 bedroom cabins, condos, or historic homes built between 1920-1980 with rustic charm, fireplaces, hot tubs, and parking for multiple vehicles, as these features appeal to both winter skiers and summer tourists visiting Yellowstone National Park. Analyze pricing using AirDNA and Mashvisor to benchmark against comparable properties, aiming for $150-300 per night depending on size and amenities, with peak seasons during ski season (December-March) and summer months (June-September). Research competition by studying existing Airbnb and VRBO listings within a 5-mile radius, noting occupancy rates, guest reviews, and pricing strategies of successful properties managed by companies like RedLodge.com and local property management firms. Utilize tools like STR Helper for market analysis, connect with Red Lodge Area Chamber of Commerce for tourism data, monitor Red Lodge Mountain's visitor statistics, and consult with local real estate agents familiar with STR regulations, as Carbon County has specific zoning requirements and the town limits short-term rental permits in certain residential areas.

To obtain an Airbnb/STR permit in Red Lodge, Montana, contact the Red Lodge City Hall at 201 South Broadway or call (406) 446-1718 to begin the application process, as Red Lodge requires short-term rental permits for properties rented for less than 30 days. Submit a completed STR permit application form along with required documents including proof of property ownership or lease agreement, floor plan of the rental unit, proof of liability insurance (typically $1 million minimum), contact information for a local property manager if you're not local, parking plan showing adequate guest parking, and waste management plan. Pay the application fee of approximately $200-300 annually, though fees may vary based on property size and type. The city requires STR properties to maintain residential character, limit occupancy to 2 people per bedroom plus 2 additional guests, provide adequate parking (typically 1 space per bedroom), maintain quiet hours from 10 PM to 8 AM, and display the permit number in all advertising. Properties must also comply with fire safety codes, have working smoke and carbon monoxide detectors, and provide emergency contact information to neighbors. The approval timeline is typically 30-60 days depending on completeness of application and any required inspections. Red Lodge also requires annual permit renewal and may conduct periodic inspections to ensure compliance with city ordinances and neighbor complaint protocols.

Short-term rentals (STRs) are generally legal in Red Lodge, Montana, as the city has not implemented a comprehensive ban on vacation rentals, though they operate under certain zoning and regulatory frameworks. Red Lodge allows STRs primarily in residential zones but requires operators to obtain proper business licenses and comply with local zoning ordinances, parking requirements, and occupancy limits. The city has implemented some restrictions including requirements for local contact persons, noise ordinances, and waste management compliance, while certain areas near schools or in specific residential districts may have additional limitations. Recent changes around 2022-2023 have included discussions about registration requirements and potential caps on the number of STR permits in certain neighborhoods due to housing availability concerns, though no outright prohibition has been enacted. Property owners must also comply with Montana state tax requirements and local lodging taxes, and the city has been monitoring the impact of STRs on long-term housing availability for residents, leading to ongoing policy discussions about potential future regulations.

The best areas for Airbnb investment in Red Lodge, Montana are the Historic Downtown District, which attracts tourists year-round with its charming Main Street lined with shops, restaurants, and proximity to the Red Lodge Mountain Resort, particularly during ski season from December through March and summer festivals like the Festival of Nations in August. The Beartooth Highway corridor area is highly desirable due to its position as the gateway to Yellowstone National Park via the scenic Beartooth Pass, drawing significant summer tourism from May through September when the pass is open. The Rock Creek area offers excellent fishing access and appeals to outdoor enthusiasts visiting for fly fishing, hiking, and camping, with consistent demand from May through October. Properties near the Red Lodge Mountain Resort base area command premium rates during ski season and summer mountain biking season, benefiting from proximity to lifts and resort amenities. The residential neighborhoods along Broadway Avenue and Haggin Avenue provide good investment opportunities with lower acquisition costs while still maintaining walkability to downtown attractions, making them attractive to families and groups visiting for outdoor recreation, with companies like Yellowstone Safari Company and Beartooth Scenic Byway Tours regularly bringing visitors to the area.

In Red Lodge, 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 stays of less than 30 consecutive days. Carbon County, where Red Lodge is located, imposes an additional 3% resort tax on short-term accommodations. The City of Red Lodge levies a 3% local option tax on lodging establishments. These taxes are typically collected from guests at the time of booking through Airbnb's automatic tax collection system, which remits payments directly to the appropriate tax authorities on behalf of hosts. For properties where Airbnb doesn't automatically collect, hosts must register with the Montana Department of Revenue and file quarterly returns using Form PR-1, remitting taxes by the 15th day following the end of each quarter. Local taxes may require separate registration and filing with Carbon County and the City of Red Lodge. Exemptions generally include stays of 30 days or longer, which are considered long-term rentals rather than transient accommodations, and rentals to certain government employees on official business.

Starting an Airbnb in Red Lodge, Montana requires approximately $485,000-$565,000 in total initial investment. Property purchase costs average $425,000 for a median 3-bedroom home suitable for short-term rentals in this ski town market as of 2024. Furnishing costs range $15,000-$25,000 for quality furniture, bedding, kitchen essentials, and mountain-themed decor to attract tourists visiting Beartooth Highway and nearby Yellowstone. Initial setup including professional photography, listing creation, and marketing materials costs $2,000-$3,000. Permits and fees total $1,500-$2,500 covering business licenses, short-term rental permits from Carbon County, and potential HOA approvals. Insurance including liability and property coverage specifically for short-term rentals costs $2,400-$3,600 annually. Utility setup and deposits for electricity, gas, water, internet, and cable total $800-$1,200. First six months operating costs including utilities ($1,800), cleaning services ($3,600), maintenance ($1,500), property management software ($300), and marketing ($1,000) total approximately $8,200. Additional working capital of $5,000-$10,000 is recommended for unexpected repairs and vacancy periods during Red Lodge's seasonal tourism fluctuations.

Airbnb properties in Red Lodge, Montana demonstrate strong seasonal profitability, with average nightly rates ranging from $150-300 during peak ski season (December-March) and summer months (June-September), generating annual revenues of $35,000-65,000 for well-positioned properties. Operating expenses typically include 25-30% for cleaning and maintenance, 10-15% for property management, 8-12% for utilities, and 3-5% for Airbnb fees, resulting in net profit margins of 40-50% for efficiently managed properties. Success factors include proximity to Red Lodge Mountain Resort, quality furnishings with mountain aesthetics, hot tubs or fireplaces, and responsive host communication, with properties within 5 miles of the ski area commanding premium rates. A typical 3-bedroom cabin near the resort averaging $225/night with 60% annual occupancy generates approximately $49,275 in revenue against $24,000 in expenses, yielding $25,275 annual profit (51% margin). Properties further from recreational amenities or lacking distinctive features often see occupancy rates drop to 35-45% and profit margins compress to 25-35%, while luxury properties with unique amenities like private hot springs access or panoramic Beartooth Mountain views can achieve 70%+ occupancy and profit margins exceeding 60%.

Airbnb investments in Red Lodge, Montana typically generate annual ROI of 12-18% due to the town's proximity to Beartooth Highway and Yellowstone National Park, with peak summer and winter ski seasons driving occupancy rates of 65-75%. Cash-on-cash returns generally range from 8-14% annually, with properties averaging $180-280 per night during peak seasons (June-August and December-February) and $120-160 during shoulder seasons. Most investors achieve profitability within 18-24 months, with vacation rental management companies like Vacasa and RedAwning reporting that well-positioned properties near downtown or ski access generate gross rental yields of 15-22%. The market benefits from Red Lodge Mountain Resort's consistent visitor traffic and the area's reputation as a gateway to Yellowstone, though investors should expect seasonal fluctuations with winter months potentially seeing 40-50% occupancy compared to summer's 80-90% rates.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Red Lodge, Montana. Local real estate agents like those at ERA Landmark Real Estate and Yellowstone Country Realty have experience with vacation rental properties in the Red Lodge area and understand the seasonal tourism patterns that drive Airbnb demand. National services include AirDNA for market analysis and revenue projections, Mashvisor for investment property analytics, and Awning for short-term rental market data specific to Montana ski towns. BiggerPockets connects investors with local experts familiar with Red Lodge's proximity to Yellowstone and Beartooth Highway tourism. Local property management companies like Red Lodge Rentals and Beartooth Vacation Rentals can provide insights into which neighborhoods and property types perform best for short-term rentals. National companies such as RedAwning, Vacasa, and AvantStay also analyze markets like Red Lodge for investment opportunities, while local mortgage brokers and vacation rental consultants familiar with Montana's seasonal rental regulations can guide investors through the purchasing process in this popular ski and outdoor recreation destination.