How to Start an Airbnb Business in Maryland

Why Maryland Is a Top Market for Short-Term Rentals

Maryland punches well above its weight as an STR market. The state is geographically tiny — you can drive from the Appalachian panhandle to the Ocean City boardwalk in under four hours — but it packs in an extraordinary concentration of demand generators. Washington D.C. sits right on its southern border. Baltimore anchors the center. The Chesapeake Bay cuts through the eastern half. And Ocean City draws millions of beach visitors every summer.

That density of demand sources is Maryland’s superpower. D.C. alone creates massive overflow demand for accommodations. Federal workers, lobbyists, contractors, and the roughly 20 million annual visitors to the nation’s capital frequently look beyond the District for lodging — and Maryland’s suburbs (Bethesda, Silver Spring, College Park, National Harbor) are often 15-30 minutes closer to their actual destination than a downtown D.C. hotel. STR operators in these areas capture D.C. demand at Maryland operating costs.

The tourism numbers back this up. Maryland’s tourism industry generates over $18 billion annually, supporting more than 140,000 jobs. The state welcomed approximately 42 million visitors in recent pre-pandemic years, and those numbers have fully recovered. Ocean City alone draws 8+ million visitors during its peak season. Baltimore’s Inner Harbor, Fort McHenry, and the National Aquarium pull steady traffic year-round. Annapolis — the state capital and a sailing mecca — hosts the U.S. Naval Academy and the Annapolis Boat Shows, which pack the city every October.

For rental arbitrage operators, Maryland offers a compelling spread: median rents are moderate compared to D.C. or Northern Virginia, but STR rates in prime locations — particularly the D.C. suburbs and waterfront communities — command premiums that significantly exceed monthly rent. A one-bedroom in Silver Spring renting for $1,700/month can generate $3,800-$5,200/month in STR revenue when managed well.

Maryland Short-Term Rental Laws and Regulations

Maryland’s STR regulatory environment is handled primarily at the county and municipal level, with a few state-level tax and licensing requirements providing the baseline. The lack of a comprehensive statewide STR law means you need to research regulations for your specific jurisdiction — rules in Baltimore City look nothing like rules in Ocean City or Montgomery County.

State-Level Requirements

Maryland’s state-level requirements for STR operators focus mainly on taxation and basic business registration:

• State sales and use tax: Maryland charges 6% sales and use tax on short-term rentals (stays under 4 months). This applies statewide, no exceptions.
• Local hotel/motel tax: Counties and municipalities impose their own transient occupancy taxes ranging from 5% to 9.5%. Baltimore City charges 9.5%. Ocean City charges 5% county tax. Montgomery County charges 7%.
• Business license: Maryland requires a Trader’s License for rental activity. You obtain this through the county Clerk of Court. The fee varies by county and gross rental revenue — typically $15-$300 annually.
• State income tax: All STR income is subject to Maryland state income tax (rates from 2% to 5.75%) plus county income tax (an additional 2.25% to 3.20% depending on county).

Airbnb and Vrbo collect and remit the 6% state sales tax for Maryland bookings. However, local transient occupancy taxes are not always automatically collected by platforms — you may need to register separately with your county and remit these taxes yourself. Check with your county’s finance department.

Key City Regulations

Baltimore City: Baltimore passed Ordinance 21-0040 in 2021, creating the city’s first formal STR registration system. All operators must register with the city’s Housing Department and obtain a short-term rental license. Properties must pass a housing inspection. Baltimore distinguishes between “hosted” rentals (owner present) and “unhosted” rentals (entire-unit, owner absent) — unhosted rentals face stricter caps and must be the operator’s primary residence. The city charges a 9.5% hotel tax on STR bookings. Violations of registration requirements carry fines starting at $500 per violation.

Ocean City: Ocean City is one of Maryland’s most established STR markets, and the town’s regulations reflect decades of experience with vacation rentals. All rental properties must be licensed with the town. Condos require approval from both the condo association and the town. Ocean City’s rental license process includes a property inspection covering fire safety, occupancy limits, and general habitability. The town also enforces strict noise ordinances — a frequent source of violations for STR operators who don’t properly screen guests. Worcester County charges a 5% room tax, and Ocean City adds its own fees.

Annapolis: Annapolis restricts short-term rentals based on zoning district. STRs are permitted in certain residential and commercial zones, but several neighborhoods have sought (and received) exemptions. The city requires a business license and charges the Anne Arundel County hotel tax of 7%. Annapolis’s compact historic district and proximity to the Naval Academy create strong, consistent demand — but the limited number of properties eligible for STR use keeps supply constrained, which supports higher ADRs for permitted operators.

Montgomery County (Bethesda, Silver Spring, Rockville): Montgomery County adopted STR regulations that require hosts to obtain a license and limit STR activity to an operator’s primary residence. The county caps stays at 120 nights per year for entire-home rentals when the host is absent. Hosted stays (owner present in the building) have no night cap. Montgomery County charges a 7% transient occupancy tax. These suburbs are prime territory for D.C. overflow demand — particularly Bethesda (near NIH and Walter Reed) and Silver Spring (Metro-accessible, growing entertainment district).

Recent Regulatory Changes (2025-2026)

• Baltimore City has ramped up enforcement of its 2021 STR ordinance, partnering with data analytics firms to identify unregistered listings. Hosts operating without a license face $500 per violation, and the city has begun issuing fines at scale rather than warnings.
• Anne Arundel County (which includes Annapolis and surrounding areas) introduced new registration requirements in late 2024 that apply to all STR operators, including those in unincorporated areas that previously had minimal oversight.
• Frederick County established its first STR permitting ordinance in 2025, requiring annual registration and limiting non-owner-occupied rentals in residential zones. Frederick’s growing tourism profile (Civil War sites, wineries, downtown revitalization) has increased STR activity enough to prompt regulatory attention.
• At the state level, Maryland’s Comptroller’s office has improved its data-sharing with platforms, making it harder for operators to avoid state sales tax obligations.

Maryland’s regulatory trend mirrors the national pattern: increasing formalization and enforcement. Operators who get compliant early benefit from reduced competition as casual hosts drop out or get fined out.

Tax Obligations for Maryland Airbnb Hosts

Maryland’s tax obligations for STR operators layer state, county, and sometimes municipal taxes. The total burden varies significantly by location:

• State sales and use tax: 6% on all short-term accommodations (stays under 4 months).
• County/municipal transient occupancy tax: Ranges from 5% (Worcester County/Ocean City) to 9.5% (Baltimore City). Montgomery County: 7%. Anne Arundel County: 7%. Prince George’s County: 7%.
• Trader’s License: Annual business license required in the county where the property is located. Fees based on gross revenue.

Total tax rates by popular market:

Location	State Tax	Local Tax	Total
Baltimore City	6%	9.5%	15.5%
Montgomery County	6%	7%	13%
Anne Arundel County	6%	7%	13%
Ocean City (Worcester Co.)	6%	5%	11%

Airbnb collects and remits the 6% state sales tax automatically for Maryland listings. Local transient occupancy taxes are handled by platforms in many jurisdictions, but not all — verify with your county’s finance office. If you take direct bookings, you’re responsible for collecting and remitting all applicable taxes.

For income tax reporting, Maryland uses a progressive state tax (2%-5.75%) plus a county piggyback tax (2.25%-3.20%). Combined with federal taxes and self-employment tax (if applicable on Schedule C), your effective income tax rate on STR profit can reach 35-45%. Track every deductible expense meticulously — cleaning, supplies, repairs, depreciation, insurance, platform fees, mortgage interest, and even mileage for property visits all reduce your taxable income.

Best Cities for Airbnb in Maryland

Baltimore

Baltimore offers one of the best risk-to-reward ratios in the mid-Atlantic STR market. Property costs and rents are substantially lower than D.C., Northern Virginia, or the Maryland suburbs, while STR demand stays strong thanks to the city’s convention center, Johns Hopkins University and Hospital, the Inner Harbor tourist district, and a growing arts and food scene (Fells Point, Canton, Hampden).

Average ADRs for entire-home listings in Baltimore run $130-$185, with occupancy between 65% and 78%. The best-performing neighborhoods are Fells Point (walkable nightlife and waterfront), Canton (slightly more residential, families), Federal Hill (young professionals, stadium proximity), and areas near Johns Hopkins Hospital (medical visitors stay for extended periods).

Baltimore is one of the better East Coast cities for rental arbitrage. A two-bedroom apartment in Fells Point renting for $1,600/month can generate $3,500-$4,800/month in STR revenue. The spread is wide enough to absorb the 15.5% combined tax rate and still profit. Johns Hopkins-area units are particularly valuable because medical travelers often book 5-14 night stays, reducing turnover costs.

Ocean City

Ocean City is Maryland’s beach tourism capital and its most established vacation rental market. The town’s 10-mile boardwalk, beach access, and family-friendly reputation draw 8+ million visitors annually — overwhelmingly concentrated between Memorial Day and Labor Day.

Summer ADRs for condos and homes range from $200 to $450/night depending on proximity to the beach and property size. Oceanfront two-bedroom condos can command $350-$500/night during peak weeks. Annual occupancy averages 50-55% (heavily weighted toward summer), with peak-season occupancy exceeding 90%.

The Ocean City STR market is dominated by condo buildings, many of which have established rental programs. If you’re buying, look for buildings with no rental restrictions and proximity to the boardwalk (north of 60th Street tends to be quieter and more family-oriented; south of 30th Street is closer to the action). The off-season is real here — November through March is very quiet, with ADRs dropping to $80-$120 and occupancy below 30%.

Annapolis

Annapolis is a smaller but premium STR market. The state capital’s historic district, Naval Academy, sailing culture, and proximity to D.C. (35 miles) attract a well-heeled visitor base. Average ADRs run $175-$250, with peak demand during the October boat shows (which can double normal rates) and Naval Academy events (commissioning week, football games, parents’ weekends).

Occupancy rates average 60-72% annually. The best-performing properties are within walking distance of City Dock and the historic district. Waterfront properties or those with water views command significant premiums. Annapolis’s tight zoning restrictions limit STR supply, which supports strong pricing for permitted operators.

One Annapolis-specific angle: sailing and boating events create booking patterns that few other markets can match. The Annapolis Sailboat Show and Powerboat Show in October fill every available room in the city and surrounding areas. Hosts who block these weeks for maximum-rate bookings can generate a full month’s normal revenue in 10 days.

D.C. Suburbs (Bethesda, Silver Spring, College Park)

Maryland’s D.C.-adjacent suburbs capture overflow demand from the nation’s capital. These markets offer year-round, non-seasonal demand driven by government, healthcare, education, and tourism.

Bethesda: Adjacent to NIH, Walter Reed National Military Medical Center, and downtown D.C. via Metro. ADRs run $160-$220, with strong weekday occupancy from medical visitors and government contractors. Extended stays (5+ nights) are common, reducing turnover costs.

Silver Spring: More affordable than Bethesda with good Metro access (Red Line). ADRs average $130-$175, with occupancy around 70-80%. The downtown Silver Spring entertainment district and proximity to D.C. drive consistent bookings. This is one of the stronger arbitrage markets in Maryland — rents are moderate while STR demand stays high.

College Park: Home to the University of Maryland. Demand spikes around move-in/move-out, graduation, parents’ weekends, and football games. ADRs are lower ($110-$155) but occupancy is bolstered by a steady academic calendar. The Purple Line extension (under construction) will improve transit connectivity and likely boost STR demand in coming years.

Deep Creek Lake

Western Maryland’s premier resort destination operates on an entirely different cycle from the rest of the state. Deep Creek Lake draws winter skiers (Wisp Resort), summer boaters and fishers, and fall foliage tourists. It’s one of the few Maryland markets with genuine four-season demand.

ADRs range from $175 to $400+ depending on property size and lake proximity. Occupancy averages 50-60% annually, with winter weekends (ski season) and summer weeks as the strongest periods. Properties here are predominantly single-family homes and cabins — not an arbitrage market, but excellent for owners who want to offset mortgage costs through STR revenue.

How Much Do Airbnbs Make in Maryland?

Maryland’s market diversity means revenue potential spans a wide range. Here’s a realistic breakdown by market:

City/Region	Avg ADR	Avg Occupancy	Est. Monthly Revenue (1BR)	Est. Monthly Revenue (3BR)
Baltimore	$155	72%	$3,350	$5,900
Ocean City	$240	52%	$3,740	$8,100
Annapolis	$210	65%	$4,095	$7,600
Bethesda	$190	74%	$4,220	$7,200
Silver Spring	$150	76%	$3,420	$5,800
Deep Creek Lake	$265	55%	$4,370	$9,200

These are gross revenue figures before expenses. Your net depends on your operating model — arbitrage operators in Baltimore or Silver Spring have rent payments eating into that revenue, while homeowners in Ocean City or Deep Creek may have mortgage obligations but benefit from property appreciation alongside rental income.

The D.C. suburban markets (Bethesda, Silver Spring) stand out for their revenue consistency. Unlike seasonal beach markets, these areas maintain steady occupancy year-round. That predictability matters enormously for arbitrage operators who need to cover rent every month regardless of season.

I’ve watched hosts in the Baltimore market specifically who doubled their revenue by switching from static pricing to a dynamic tool and investing in better listing photos. The fundamentals — pricing, presentation, guest communication — separate the top 20% earners from the rest of the market by a wider margin than you’d expect.

How to Start Your Maryland Airbnb Business

Maryland’s multi-layered regulatory environment means you need to check boxes at both the state and local level. Here’s how to do it systematically:

Step 1: Select your market and model. Maryland offers more operating model diversity than most states. Arbitrage works best in Baltimore, Silver Spring, and College Park where the rent-to-revenue spread is favorable. Co-hosting is growing in Ocean City and Annapolis where homeowners want professional management. Property purchases make sense at Deep Creek Lake and on the Eastern Shore where appreciation compounds with rental income.

Step 2: Research your local jurisdiction’s STR rules. This is where Maryland gets tricky. Baltimore City, Montgomery County, Anne Arundel County, and Ocean City all have completely different regulatory frameworks. Don’t assume that rules in one jurisdiction apply anywhere else. Contact the relevant licensing office directly and get specifics: What permits do I need? Are there zoning restrictions? Is there a night cap? What’s the inspection process?

Step 3: Obtain your Trader’s License. Maryland requires a Trader’s License for commercial rental activity. File with the Clerk of Court in the county where your property is located. The fee is based on estimated gross revenue — typically $15-$300 annually. This is separate from any local STR permit.

Step 4: Register for state tax accounts. Register with the Maryland Comptroller’s office for sales and use tax collection. If platforms handle tax remittance for your bookings, this registration still matters for direct bookings and compliance documentation. Also register for local transient occupancy tax with your county if it’s not automatically handled by your booking platform.

Step 5: Get local permits and inspections. Apply for any required local STR license or permit. In Baltimore City, this means registering with the Housing Department and scheduling an inspection. In Ocean City, it means a rental license and property inspection. Budget 3-8 weeks for the full approval process, including any back-and-forth on inspection findings.

Step 6: Secure proper insurance. Maryland doesn’t mandate a specific STR insurance minimum at the state level, but many local jurisdictions require proof of liability coverage. Carry at least $1 million in general liability coverage. See the insurance section below for details on what to look for in a policy.

Step 7: Prepare the property to market standards. Maryland guests vary by market — D.C. suburbs attract business travelers who want clean spaces with fast WiFi and workspaces. Ocean City guests expect beach gear and outdoor amenities. Baltimore visitors want walkable neighborhoods with restaurant recommendations. Tailor your setup and house manual to your specific guest profile.

Step 8: List and price strategically. Professional photography is baseline. Write descriptions that reference specific landmarks and distances: “12-minute walk to Inner Harbor,” “3 blocks from the Bethesda Metro station,” “ocean view from the balcony.” Use dynamic pricing from the start — Maryland’s market fluctuations between weekdays and weekends, peak and off-season, are too significant for flat-rate pricing.

Step 9: Build reliable operations. Your cleaning team is your most critical operational relationship. In Ocean City, Saturday turnovers are the industry standard — every property turns over on the same day, and cleaning crews are in extreme demand. In Baltimore and D.C. suburbs, same-day or next-morning turnovers are expected. Establish backup cleaning contacts before you need them.

Step 10: Monitor and expand. Track your performance against market benchmarks monthly. Maryland’s proximity to D.C. means you can manage multiple properties across different markets without excessive travel time. Many successful Maryland operators run a portfolio across 2-3 distinct markets — combining a year-round D.C. suburb property with a seasonal Ocean City or Deep Creek unit to balance cash flow.

Maryland STR Insurance and Liability

Maryland doesn’t impose a statewide insurance minimum for STR operators, but several municipalities (including Baltimore City) require proof of liability coverage as part of the licensing process. Even where it’s not legally mandated, operating without proper insurance in Maryland is a gamble that experienced hosts never take.

Here’s the breakdown of what you need to know about STR insurance:

Your standard policy won’t cover STR activity. Homeowner’s and renter’s insurance policies in Maryland typically exclude “business use” of the property. If a guest is injured and your insurer learns you’re running a short-term rental, the claim will likely be denied. Some insurers will also cancel your policy entirely for material misrepresentation of how you use the property.

Airbnb’s AirCover provides a floor, not a ceiling. AirCover includes up to $1 million in Host Liability Insurance and up to $3 million in Host Damage Protection. It’s better than nothing, but it has exclusions (certain property types, specific scenarios) and claims processing can take months. Don’t rely on it as your sole protection.

What your STR insurance policy should include:

• $1 million minimum general liability coverage
• Property damage coverage for furnishings, appliances, and guest-caused damage
• Loss of rental income if the property is damaged and can’t be rented
• For Ocean City and waterfront properties: flood insurance (NFIP or private carrier)
• For properties with amenities like hot tubs, fire pits, or docks: verify specific coverage (common exclusions)
• Umbrella policy consideration for multi-property operators

Maryland-specific considerations: Properties near the Chesapeake Bay and Atlantic coast may be in FEMA flood zones — standard insurance doesn’t cover flood damage. Check flood zone status at FEMA’s National Flood Hazard Layer viewer. Also, Maryland’s legal environment means personal injury claims are common; if a guest slips on your icy walkway in January (Maryland winters are real), you want solid coverage behind you.

Budget $1,200-$3,000 annually per property for comprehensive STR insurance. Waterfront and flood-zone properties will be on the higher end. Providers like Proper Insurance, Safely, and CBIZ offer policies structured specifically for short-term rental operations.

Why 10XBNB Gives You the Edge in Maryland

Maryland’s STR opportunity is real, but the state’s market-by-market regulatory differences create a maze that trips up unprepared operators. The rules in Baltimore City have almost nothing in common with the rules in Ocean City. Montgomery County’s primary-residence requirement doesn’t apply in Worcester County. Tax rates swing from 11% to 15.5% depending on where your property sits. Getting any of this wrong costs money — in fines, in lost bookings, or in a lease you can’t profitably operate.

The 10XBNB program equips you with the framework to evaluate any market systematically — not just Maryland markets, but the approach is particularly valuable in states like this where local variation is extreme. Students learn to analyze revenue potential against regulatory constraints, negotiate arbitrage leases that protect them, build multi-market portfolios, and set up operations that scale.

Maryland also rewards speed. Baltimore’s enforcement is increasing. Montgomery County caps non-owner-occupied nights. Ocean City inspection schedules fill up. The operators who move first — with a plan, with proper compliance, with optimized listings — lock in positions that become harder for latecomers to match. The knowledge gap between prepared and unprepared hosts is wider in Maryland than in states with simpler regulatory frameworks, and that gap translates directly to profitability.

Frequently Asked Questions

Do I need a license to operate an Airbnb in Maryland?

Yes, at minimum you need a Trader’s License from the county Clerk of Court. Beyond that, many jurisdictions require their own STR-specific permits. Baltimore City requires registration with the Housing Department. Ocean City requires a rental license and inspection. Montgomery County requires a host license. Always check both state and local requirements for your specific property location.

How much tax do Maryland Airbnb hosts pay on bookings?

Maryland charges a 6% state sales and use tax on all short-term accommodations. Counties and cities add transient occupancy taxes ranging from 5% to 9.5%. In Baltimore City, the total tax rate is 15.5%. In Ocean City, it’s 11%. In Montgomery County, it’s 13%. Airbnb remits the 6% state tax automatically, but local taxes may require separate registration and payment.

Can I do rental arbitrage in Baltimore?

Baltimore’s STR ordinance requires that unhosted (entire-unit) short-term rentals be the operator’s primary residence. This complicates traditional rental arbitrage where you lease a property solely for STR use. Hosted rentals — where you’re present in the building — have fewer restrictions. Some operators work within the primary residence requirement by living in one unit of a multi-unit building and renting other units as STRs. Always verify current regulations with Baltimore’s Housing Department before signing a lease.

What are the best areas in Maryland for short-term rentals?

For year-round income: the D.C. suburbs (Bethesda, Silver Spring) offer consistent demand from government and medical travelers. For seasonal peak revenue: Ocean City generates the highest gross during summer months. For balanced performance: Baltimore’s Fells Point and Canton neighborhoods combine reasonable year-round occupancy with moderate operating costs. For premium ADRs: Annapolis commands high rates, especially during boat show season and Naval Academy events.

Is Ocean City, Maryland good for Airbnb?

Ocean City is an established vacation rental market with strong summer demand — 8+ million annual visitors and peak-season occupancy above 90%. ADRs range from $200-$450 during summer. The tradeoff is extreme seasonality: winter occupancy drops below 30% and ADRs fall to $80-$120. The math works for operators who price peak season aggressively enough to cover the full annual cost structure, but it requires more cash reserves than year-round markets. Condo buildings near the boardwalk offer the most accessible entry point.

Do I need flood insurance for a Maryland waterfront property?

If your property is in a FEMA-designated flood zone — common along the Chesapeake Bay, Ocean City, and other coastal areas — flood insurance is strongly recommended and often required by mortgage lenders. Standard homeowner’s and STR liability policies exclude flood damage. The National Flood Insurance Program (NFIP) provides coverage, as do some private carriers. Check your property’s flood zone status at FEMA’s National Flood Hazard Layer map before purchasing or leasing.