Montgomery Short Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short Term Rental Business in Montgomery

The City of Montgomery, Alabama has a very welcoming environment for short term rental businesses. There are currently no specific regulations or restrictions on operating an Airbnb or VRBO in the city347. This makes it relatively easy for entrepreneurial hosts to get started.

To legally run a short term rental in Montgomery, you simply need to obtain a standard business license from the city3. There are no special short term rental permits required. The business licensing process is straightforward - you submit an application providing information about your business and pay the applicable fee3.

With the lack of red tape, Montgomery is an attractive market for Airbnb investors. You are free to purchase an investment property and immediately start renting it out on a short term basis, without worrying about permits, zoning restrictions, caps on rental nights per year, or other common STR regulations found in many cities347. This regulatory freedom provides a lot of flexibility.

Another appealing aspect of Montgomery's short term rental landscape is that there are no restrictions on non-owner occupied rentals. In some cities, you can only rent out your primary residence on a short term basis. But in Montgomery, you are allowed to purchase investment properties with the sole intent of using them as Airbnb rentals, even if you don't live there yourself347. This opens up more opportunities.

The city also doesn't limit which zoning districts allow short term rentals. Whether a property is zoned residential, mixed-use, or commercial, you can operate an Airbnb as long as you obtain a business license347. So hosts have a wide selection of neighborhoods to choose from.

Overall, Montgomery's hands-off approach to regulating short term rentals makes it one of the easiest cities to start an Airbnb business. The low barriers to entry are very appealing to investors and entrepreneurs looking to capitalize on the growing short term rental industry without getting bogged down in red tape.

Short Term Rental Licensing Requirement in Montgomery

While many cities have implemented specific short term rental ordinances with special permit requirements, Montgomery keeps it simple. The only license you need to operate an Airbnb is a general business license37.

Applying for a business license involves providing details about your rental business, including3:

• Business name, address, and description
• Owner name and contact information
• Property owner details if different from business owner
• Projected annual revenue

There is an application fee required to obtain your business license. Licenses need to be renewed annually as they expire at the end of each calendar year3.

So in summary, the barrier to entry to starting an Airbnb business in Montgomery is quite low from a regulatory perspective. You don't have to navigate a complicated short term rental specific licensing process like in many other markets. It's the same straightforward business licensing required for any type of business.

This is a major advantage for Montgomery hosts. In cities with strict short term rental ordinances, the licensing process can be very involved, time-consuming and costly. Hosts often have to submit things like floorplans, parking plans, proof of insurance, fire safety certifications and more. The application fees can also be quite high.

But in Montgomery, you can get set up quickly and easily with just a standard business license. You don't have to worry about being denied a short term rental permit because you don't meet some stringent criteria. As long as you properly register your business and pay the applicable lodging taxes, you can operate freely.

So for entrepreneurs and investors eager to ride the short term rental wave, Montgomery offers a refreshingly simple path to getting started thanks to its minimalist approach to licensing and regulation. The city seems to recognize the economic benefits of Airbnb and has chosen to welcome short term rentals without burdening hosts with onerous red tape.

Required Documents for Montgomery Short Term Rentals

When submitting your business license application to legally operate as a short term rental in Montgomery, you'll need to provide a number of documents and pieces of information3:

• Completed business license application form
• Business owner details - name, address, phone, email
• Property owner information if you are not the property owner
• Physical address of your short term rental property
• Projected annual revenue for your rental business
• Application fee payment

Unlike some cities, Montgomery does not require you to submit things like floor plans, parking details, proof of liability insurance, or other items that are sometimes needed for short term rental permits in other markets. The document requirements are minimal.

This streamlined application process is a major perk for Montgomery hosts. You don't have to spend time and money gathering a long list of required documents. In some cities, hosts need to provide things like:

• Floorplans with room dimensions and locations of fire extinguishers and smoke detectors
• Site plans showing parking spaces
• Proof of $500K-$1M liability insurance
• Fire safety inspection reports
• Neighbor notification proof

Putting together all of that documentation can be a major hassle and expense. But in Montgomery, the required paperwork for a short term rental business license is no different than any other type of business. You just need to fill out the standard application and provide basic information about your business and rental property.

Once your business license application is approved, you'll receive your license which you should keep on file. Then you're all set to start hosting short term guests!The lack of red tape and simple documentation requirements make launching an Airbnb in Montgomery a breeze compared to many other cities.

This welcoming approach likely encourages more hosts to enter the market, boosting the supply of unique short term rentals for visitors.

As the short term rental industry continues to boom, Montgomery's easy licensing process could give the city a competitive advantage in attracting Airbnb operators. While other cities make hosts jump through bureaucratic hoops, Montgomery rolls out the red carpet, which is likely to pay dividends in the form of increased tourism revenue.

Montgomery Short Term Rental Taxes

While Montgomery keeps the licensing process easy for Airbnb operators, you do still have important tax obligations to be aware of. Short term rentals are subject to the following lodging taxes37:

• State of Alabama Lodging Tax: 4-5%
• Montgomery County Lodging Tax: $2.25 per room per night
• City of Montgomery Lodging Tax: 11% for properties within city limits, 5.5% within police jurisdiction

As a short term rental host, it's your responsibility to collect these lodging taxes from your guests and remit the tax amounts to the proper authorities. Taxes need to be filed on a monthly basis7.

Proper management of lodging taxes is an important part of running a compliant short term rental business. You'll want to make sure you understand your tax obligations and stay on top of collecting and paying the taxes to avoid any issues.

Many cities have implemented short term rental specific taxes in recent years as Airbnb has grown in popularity. These taxes are often referred to as "Airbnb taxes" or "hotel taxes." They are generally a percentage of the listing price, though some are flat per-night fees.

The rationale behind these taxes is that short term rentals should help cover the impact they have on city services and infrastructure, just like hotels do. The tax revenue is often earmarked for things like affordable housing, tourism promotion, and neighborhood improvements.

In Montgomery, the lodging tax framework is fairly straightforward. The city and county taxes are in line with what many other markets charge. For example, Nashville has a combined city-county tax of 6%, plus $2.50 per night. New Orleans charges $1 per night, plus 6.75% to the city and 4% to the state.

One thing to note is that if you use Airbnb to book your rentals, the platform will automatically collect and remit the state-level taxes on your behalf. However, you are still responsible for registering to collect and pay the county and city lodging taxes yourself.

Failure to comply with the tax requirements can result in penalties and legal issues, so it's crucial to stay on top of this aspect of running your short term rental business. Consider using a tax professional or specialized short term rental compliance software to help you navigate the process.

Overall, while Montgomery's lodging taxes do add some administrative work and expense for hosts, they are not overly burdensome compared to many other cities. And the revenue they generate helps support local services and infrastructure, which benefits both residents and visitors. By being diligent about tax compliance, hosts can operate legally and contribute positively to the community.

Montgomery-wide Short Term Rental Rules

One of the most appealing things about operating a short term rental in Montgomery is the lack of restrictions. The city has not passed any laws limiting short term rentals347.

This means there are:

• No zoning restrictions on where you can operate an STR
• No cap on the number of nights you can rent per year
• No requirement that it must be your primary residence
• No mandatory safety inspections
• No limits on the number of guests or required parking spaces

Essentially, as long as you get your business license and pay your lodging taxes, you are free to operate your short term rental as you wish, without the strict operating rules found in many other cities' ordinances.

This hands-off approach makes Montgomery an attractive and easy place to run an Airbnb. However, hosts still need to make sure they are providing a safe rental and being a good neighbor to avoid any potential issues or complaints.

In many other cities, short term rental regulations have become quite restrictive in recent years. Common rules include:

• Only allowing STRs in certain zoning districts (often prohibiting them in residential areas)
• Capping the number of nights per year a property can be rented short-term
• Requiring the STR to be the host's primary residence
• Limiting the number of guests allowed per bedroom
• Requiring one off-street parking space per bedroom
• Mandating safety features like fire extinguishers, smoke detectors, and posted emergency exit routes
• Prohibiting events, parties, and excessive noise
• Requiring a local contact available 24/7 to address any issues

Cities implement these regulations in an attempt to mitigate potential negative impacts of short term rentals, such as noise, parking congestion, and loss of housing stock. Some also argue that non-owner occupied STRs change the character of residential neighborhoods.

But in Montgomery, officials have taken a different approach. Rather than preemptively placing strict limits on short term rentals, the city has opted to let the industry operate freely, with minimal intervention. This is likely due to a recognition of the economic benefits of Airbnb, combined with a lack of widespread issues necessitating a heavy-handed response.

The lack of operating restrictions gives Montgomery hosts a lot of flexibility and freedom in how they run their short term rental businesses. You can choose to rent out your property as often as you want, to as many guests as it can comfortably accommodate. You're not constrained by arbitrary caps or zoning limitations.

This regulatory freedom does come with a lot of responsibility though. Without the city mandating things like fire safety equipment and occupancy limits, the onus is on hosts to voluntarily implement best practices to ensure a safe and neighborly operation. Most experienced hosts and professional managers do this anyway as a matter of course.

But hosts should be aware that a hands-off regulatory approach means that if issues do arise with an Airbnb property, neighbors and city officials may be quicker to crack down on that individual operator, since there aren't blanket rules in place. So it's in your best interest to be proactive about addressing potential concerns before they become problems.

Overall, Montgomery's lack of operating restrictions is a major selling point for short term rental entrepreneurs. It allows for creativity and flexibility in crafting an Airbnb business model. As long as you are a responsible operator, you can really tailor your business to your goals and the needs of your target guest demographic, without worrying about running afoul of a long list of rules. This dynamic environment is a big part of what makes Montgomery an appealing Airbnb investment destination.

Does Montgomery strictly enforce STR rules?

Since Montgomery does not actually have any major restrictions on short term rentals, there isn't much for the city to enforce. As long as you properly obtain your business license and stay current on your lodging tax obligations, you shouldn't run into any compliance issues with the city347.

Compared to many other cities that have implemented strict regulations on Airbnb and VRBO rentals, often with aggressive enforcement, Montgomery is very hands-off and welcoming of short term rentals347. There are no stories of the city cracking down on Airbnb operators or implementing bans.

This Airbnb-friendly environment makes Montgomery an appealing market for hosts. The lack of red tape allows you to operate freely and avoid the risk of accidentally violating a rule that could put your business in jeopardy like in some highly regulated cities.

In places with a lot of short term rental regulations, hosts often have to worry about things like:

• Neighbor complaints leading to fines or license revocation
• City officials doing spot inspections to check for permit and safety violations
• Competitors reporting minor infractions to try to get your listing shut down
• Constantly monitoring evolving regulations to stay compliant

Operating an Airbnb in that type of strict enforcement environment can be very stressful and risky. Even well-intentioned hosts can inadvertently run afoul of the rules, jeopardizing their business.

But in Montgomery, the regulatory landscape is much more stable and straightforward. The city has taken a deliberately welcoming approach to short term rentals. Officials understand the benefits of Airbnb to the local economy and have chosen not to burden the industry with a lot of red tape and punitive enforcement.

This hands-off approach doesn't mean that hosts can act with total impunity though. If an Airbnb property is generating a lot of complaints due to noise, trash, parking issues, etc., the city can still take action under existing nuisance ordinances. And if a host fails to obtain a business license or pay their taxes, they can face penalties.

But in general, Montgomery seems to have a collaborative rather than adversarial relationship with short term rental operators. The focus is on encouraging compliance with the basic licensing and tax rules, not on finding excuses to penalize hosts.

This enforcement philosophy makes the city very appealing for Airbnb entrepreneurs. While you still have to be a responsible operator and good neighbor, you can run your business without constant fear of unintentionally breaking an obscure rule. There's a much wider margin for error compared to stricter cities.