Is Takoma Park, Maryland Good for Airbnb Investment?

To start an Airbnb in Takoma Park, Maryland, begin by researching local regulations as the city requires short-term rental operators to obtain a business license and comply with zoning restrictions that typically limit rentals to owner-occupied properties or specific residential zones. Contact the Takoma Park City Clerk's office to obtain the necessary business license (approximately $50-100 annually) and ensure your property meets fire safety and building code requirements, which may require inspections. Find a suitable property in residential zones R-1 through R-4, keeping in mind that many areas require the owner to live on-site during rentals. Purchase essential furnishings including quality bedding, basic kitchen appliances, WiFi equipment, safety devices (smoke detectors, carbon monoxide detectors, fire extinguisher), and consider the area's eco-conscious demographic by including sustainable amenities. Register for Maryland state taxes and obtain a trader's license if required, then create your Airbnb listing with professional photos highlighting proximity to Washington DC (just 7 miles away), the Takoma Metro station, and local attractions like the Takoma Park Farmers Market. For ongoing management, establish clear house rules respecting the community's quiet residential character, implement a 24/7 guest communication system, coordinate cleaning between stays, maintain compliance with the city's noise ordinances, and consider hiring local property management companies familiar with Montgomery County regulations if you plan to scale operations.

To identify profitable short-term rental properties in Takoma Park, Maryland, focus on locations within walking distance of the Takoma Metro station and near the vibrant downtown commercial district along Carroll Avenue, as proximity to Washington DC (15 minutes by Metro) drives high demand from business travelers and tourists. Target 2-3 bedroom single-family homes or condos built after 1950 with parking spaces, modern amenities, and outdoor space, as these features command premium rates in this market where properties typically rent for $80-150 per night. Conduct pricing analysis using AirDNA and Mashvisor to identify properties where potential STR revenue exceeds long-term rental income by at least 40%, focusing on areas near Sligo Creek Park and the Takoma Junction development where occupancy rates average 65-75%. Research competition by analyzing existing Airbnb and VRBO listings within a 0.5-mile radius, noting that successful properties emphasize the neighborhood's walkability, proximity to trendy restaurants like Republic and Roscoe's, and easy DC access. Utilize tools like Rabbu, AllTheRooms, and local MLS data through partnerships with Takoma Park realtors, while monitoring the city's STR regulations and considering properties in nearby Silver Spring if Takoma Park's zoning restrictions limit opportunities, ensuring compliance with Montgomery County's short-term rental licensing requirements implemented in 2019.

To obtain an Airbnb/STR permit in Takoma Park, Maryland, you must first contact the Takoma Park City Clerk's office at 7500 Maple Avenue to apply for a Short-Term Rental License, as the city requires all properties rented for less than 30 days to be licensed. Required documents typically include a completed application form, proof of property ownership or lease agreement allowing short-term rentals, certificate of occupancy, fire safety inspection certificate from the Montgomery County Fire Department, general liability insurance policy (minimum $1 million coverage), floor plan of the rental unit, and contact information for a local responsible party available 24/7. The application fee is approximately $200-300 annually, with additional inspection fees of around $100-150. You must also register with Montgomery County for tax collection purposes and obtain a Maryland trader's license if operating as a business. The timeline for approval is typically 4-6 weeks after submitting a complete application, pending successful inspections. Takoma Park specific requirements include limiting rentals to owner-occupied properties or properties where the owner lives within a 25-mile radius, maintaining a guest registry, posting emergency contact information prominently in the rental unit, ensuring adequate parking without impacting neighbors, and adhering to noise ordinances with quiet hours from 10 PM to 7 AM. Properties must also comply with the city's housing code standards and may be subject to periodic re-inspections.

Short-term rentals (STRs) are currently prohibited in Takoma Park, Maryland. The city enacted a comprehensive ban on STRs in 2019 following concerns about housing affordability, neighborhood character, and parking issues. The ordinance specifically prohibits the rental of residential properties for periods of less than 30 consecutive days, effectively banning platforms like Airbnb and VRBO throughout the entire city. There are no permitted areas or exceptions for STRs within Takoma Park's boundaries, making it one of the more restrictive jurisdictions in Montgomery County regarding short-term rental regulations. Property owners who violate the ban face fines and enforcement actions, and the city has maintained this prohibition despite some advocacy for more flexible regulations that would allow limited STR operations under certain conditions.

The best areas for Airbnb investment in Takoma Park, Maryland include the Historic District near the downtown core along Carroll Avenue, which attracts visitors interested in the city's arts scene, local festivals, and proximity to the Takoma Metro station providing easy access to Washington DC. The neighborhoods around Sligo Creek Park are highly desirable due to their natural setting and appeal to families and outdoor enthusiasts visiting the area's extensive trail system. The residential areas near the Takoma Park Community Center and Library draw guests attending local events, workshops, and cultural activities. Properties within walking distance of the Takoma Metro station (Red Line) are particularly valuable for business travelers and tourists wanting convenient transportation to downtown DC, the National Mall, and other major attractions. The area around Eastern Avenue near the DC border is attractive for its walkability to restaurants, shops, and the weekly farmers market, while also offering lower property costs compared to DC proper. The neighborhoods near Montgomery College Takoma Park campus can generate steady income from visiting academics, prospective students, and families during graduation periods.

In Takoma Park, Maryland, Airbnb hosts are subject to Maryland's state sales tax of 6% on short-term rental accommodations, which is automatically collected by Airbnb and remitted to the state on behalf of hosts. Montgomery County imposes an additional 5% transient occupancy tax on lodging stays of less than 30 consecutive days, bringing the total tax rate to approximately 11% for most Airbnb bookings. Airbnb collects and remits both the state and county taxes directly through their platform as of 2019, simplifying compliance for hosts who no longer need to manually register or file returns for these taxes. The city of Takoma Park itself does not impose a separate lodging tax beyond what is collected at the state and county levels. Stays of 30 days or longer are typically exempt from these transient occupancy taxes and are treated as long-term rentals rather than short-term accommodations, though hosts should verify current exemption thresholds as regulations can change.

To start an Airbnb in Takoma Park, Maryland, the total costs would be approximately $520,000-$580,000. Property purchase represents the largest expense at $450,000-$500,000 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 furniture, appliances, linens, and decor to create an attractive rental space. Initial setup costs including professional photography, listing creation, and basic renovations average $3,000-$5,000. Permits and fees in Montgomery County include short-term rental licenses, business permits, and potential HOA approvals totaling approximately $500-$1,500. Insurance costs for short-term rental coverage run $2,000-$3,500 annually, with six months costing $1,000-$1,750. Utilities including electricity, gas, water, internet, and cable average $300-$400 monthly, totaling $1,800-$2,400 for six months. First six months operating costs including cleaning services, supplies, maintenance, platform fees (Airbnb charges 3% host fee), marketing, and miscellaneous expenses typically run $8,000-$12,000. Additional considerations include potential property management fees if outsourced (10-20% of revenue), emergency repair funds, and local tax obligations which vary by specific location within Takoma Park.

Airbnb properties in Takoma Park, Maryland typically generate annual revenues of $18,000-$35,000 for entire homes and $8,000-$15,000 for private rooms, with average daily rates ranging from $75-$140 depending on property size and amenities. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($30-50 per turnover), utilities ($150-250 monthly), property management (10-20% of revenue), insurance ($800-1,200 annually), and maintenance costs ($2,000-4,000 yearly). Net profit margins typically range from 15-35% after expenses, with successful properties averaging 65-75% occupancy rates throughout the year. Key success factors include proximity to Washington DC (20 minutes by Metro), competitive pricing below DC rates while offering suburban charm, professional photography, responsive host communication, and targeting business travelers and tourists seeking alternatives to expensive downtown hotels. Properties near the Takoma Metro station and those featuring parking, full kitchens, and outdoor spaces tend to outperform the market average, with some hosts reporting annual profits of $8,000-$15,000 on well-managed single-family homes, though seasonal fluctuations and increased competition from new listings have compressed margins by approximately 10-15% since 2019.

Based on Takoma Park, Maryland market conditions, Airbnb investments typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% depending on property type and location within the city. Properties near the Takoma Metro station and downtown area command higher nightly rates of $85-120, while residential areas average $65-95 per night. Initial profitability usually occurs within 12-18 months for well-positioned properties, with break-even on cash investment typically achieved in 18-24 months. The market benefits from proximity to Washington DC, attracting business travelers and tourists, with occupancy rates averaging 65-75% annually. Properties requiring minimal renovation show faster returns, while those needing significant updates may extend profitability timelines to 24-30 months but can achieve higher long-term ROI of 10-14% once established.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties in Takoma Park, Maryland, offering market analysis and property recommendations. Local real estate agents specializing in Airbnb investments in the area include Keller Williams Capital Properties agents who focus on investment properties, Long & Foster agents with short-term rental expertise, and Compass realtors who understand the Montgomery County market dynamics. National services like Awning (founded 2017) provide full-service Airbnb property management and investment guidance, while Mashvisor offers data-driven property analysis tools for the Washington DC metro area including Takoma Park. AirDNA provides market data and revenue projections for short-term rentals in the region, and BiggerPockets connects investors with local professionals experienced in Airbnb investments. Local property management companies such as RedAwning and Vacasa (established 2009) offer services to optimize rental performance, while investment-focused brokerages like eXp Realty have agents specializing in short-term rental properties in Montgomery County. Additionally, companies like Roofstock and Arrived Homes have expanded into the short-term rental investment space, providing turnkey solutions for investors looking to enter the Takoma Park Airbnb market.