Bozeman vacation rental market

[Stephen Conrad jr]

I am looking to invest in Bozeman and specifically target the str market there. My fiancé recently had her bachelorette party there and absolutely loved it. We have talked about buying a vacation home somewhere and renting it short term either to travelers or travel nurses between our trips out.

Does Bozeman have a strong str market?

[Michael Rutkowski]

Hi Stephen, thanks for looking into Bozeman's market for STR's. I manage exclusively STR's for residential real estate and some STR's mixed into my commercial property. Our market, if you can find a cash-flowing property, is great in terms of vacancy if that's what you mean? I have 6 active rentals with occupancy at +90% in the summer, and around 65% in the slowest times of year, of which there are 2, 2 month periods. Talking with other competitors and professionals in my field in town and in my area, I think that is a pretty good number. As with all things real estate, location is crucial, but we also have the complexities of offering the best amenities when competing with each other.

Currently our market is pretty saturated with STR in all the new low-rise buildings going up all over town. I honestly have no idea how they compete with each other. I will give you a huge tip for free... Buy something in the county for STR's. Also factor in those amenities. There are so many generic rentals in Bozeman, and with no amenities, they just won't be worth the investment because of costs. Costs: STR managers want 20-30%, and the upkeep on furnishings is much higher than with a LTR. It will suck out all your profit with a poorly chosen property.

The thing with the city of Bozeman is that they have regulated STR ops within city limits, such that an owner, to be in compliance, will need to live in 1 unit for 6 months out of the year. The most successful STR ops within city limits are multi-families with an owner/operator. These types of property comprise R2 with an ADU, R3 with multi-family or ADU, R4 with multi family and/or ADU. RO is also a property designation, but there's no restrictions in that zoning designation as far as I know. I don't know any agents or property managers, including myself, who would manage an unregistered property inside city limits, as it is now a misdemeanor, and there's possible sanctions by the Realty Reg board, even though STR's are not regulated by the Montana Landlord Act. Those are no joke, upwards of $5000.

I hope I helped you out a bit, but to answer your question in one word: yes. You can always DM me if you have any more detailed questions.