What to Know About Becoming a Landlord in Billings, MT

Last reviewed and updated October 6, 2026

What should you know before becoming a landlord in Billings? Check the rent against real benchmarks (HUD's FY2026 Fair Market Rent for a Billings-metro 3-bedroom is $1,983), follow Montana's landlord-tenant law, and screen every applicant by the same written standards.

Renting out a Billings home you are not ready to sell, or buying one to rent, can build equity over time, but only when the numbers work and the property is run properly. As a Real Estate Broker with The Morales Group at Engel & Völkers Billings, I help investors decide whether a property works as a rental before they buy it or decide not to sell it.

What does the Billings market look like for a new landlord?

Billings homes sold for a median $385,000 from October 1, 2025 through September 30, 2026, according to the Billings MLS, with a median 25.5 days on market and a median 98.4% of original list price. On October 4, 2026, 655 Billings residential listings were active.

Homes that are priced right are not sitting for months in Billings right now, so renting should be a decision you make on the rental numbers, not because a sale feels slow. If you are deciding between selling and renting, the 12-month Billings real estate market report shows prices and days on market by area and price band.

How much rent can a Billings rental bring in?

HUD's FY2026 Fair Market Rents for the Billings, MT metro area are $1,132 a month for a one-bedroom, $1,432 for a two-bedroom and $1,983 for a three-bedroom. Fair Market Rents are a benchmark set for housing assistance programs, not a quote for any specific home.

Price your rental against comparable rentals near the property, with the same bedroom count, condition, parking and laundry. Who pays water, sewer, gas and electricity also changes what a tenant will pay. Price too high and the home sits vacant; price too low and you give up income every month.

What are the pros and cons of renting out your property?

When the rent covers your full carrying costs, a tenant's payments help pay down your mortgage while you keep the property and any appreciation. You keep the option to sell later.

The trade-off is work and risk. You handle repairs, seasonal maintenance and tenant questions, and you carry the mortgage yourself during any vacancy. One major repair or a two-month vacancy can erase a year of thin cash flow.

How do you estimate rental income and expenses?

Start with a realistic rent from comparable rentals, then subtract every cost, not only the mortgage:

• Principal and interest on the loan
• Property taxes (see my guide to Billings property taxes)
• Landlord insurance, which is priced differently from an owner-occupied policy
• Routine maintenance such as furnace service, lawn care and snow removal if you provide it
• A reserve for big-ticket items such as a roof, furnace or water heater
• Vacancy between tenants
• Property management, even if you self-manage at first
• Any utilities you pay instead of the tenant

My guide to flip vs rental in Billings walks through how I would underwrite a rental before an investor makes an offer.

How is rental income taxed?

Rental income is taxable, and the IRS allows landlords to deduct ordinary and necessary rental expenses such as mortgage interest, property taxes, insurance, repairs and management fees. The IRS also lets you depreciate a residential rental building, not the land, generally over 27.5 years.

Depreciation lowers taxable income while you own the property, and the depreciation you claimed is generally taxed when you sell. A 1031 exchange can defer that tax if you buy another investment property; see my guide to 1031 exchanges in Billings. Talk with a tax professional about your situation.

What Montana laws apply to landlords?

Residential tenancies in Montana are governed by the Montana Residential Landlord and Tenant Act of 1977, Title 70, Chapter 24 of the Montana Code Annotated. Security deposits are covered separately in Title 70, Chapter 25.

These laws cover the lease, entry to the property, repair responsibilities, notices and deposits. Read them, or have a Montana real estate attorney review your lease, before your first tenant moves in.

What do fair housing laws require when you screen tenants?

The federal Fair Housing Act prohibits discrimination in renting because of race, color, religion, sex, national origin, familial status or disability. Montana law (MCA 49-2-305) also protects marital status, creed and age.

These rules apply to your advertising, your questions and your decisions. Write down your screening criteria, such as income verification, credit history and rental references, and apply the same criteria to every applicant.

What are Montana's security deposit rules?

Under MCA 70-25-202, when a tenancy ends a Montana landlord must return the full security deposit within 10 days if there is no unpaid rent, no damage and no cleaning needed. If you deduct anything, you have 30 days to send the tenant a written, itemized list of the charges with any remaining balance.

Montana law does not set a maximum security deposit amount. Keep move-in and move-out photos and a written condition checklist, which make any deduction easier to support.

Do you need a city license or permit to rent in Billings?

Long-term rentals and short-term rentals are treated differently. Before you list, confirm with the City of Billings whether any license, permit or registration applies to your property, especially if you plan stays of fewer than 30 days.

Should you self-manage or hire a property manager?

Self-managing saves the management fee but makes you responsible for marketing, showings, screening, leases, rent collection and repair calls. Owners who live out of the area, or who want less day-to-day involvement, often hire a property manager.

When you compare managers, ask for the full fee schedule in writing: the monthly management fee, the fee to place a new tenant, lease renewal fees, and how repairs are approved and billed. Then put those costs in your numbers before you decide.

Frequently Asked Questions

How much can I charge for rent in Billings?

Rent depends on the specific home. As a benchmark, HUD's FY2026 Fair Market Rents for the Billings, MT metro area are $1,432 a month for a two-bedroom and $1,983 for a three-bedroom; compare against nearby rentals with the same bedroom count and condition.

How fast must a Montana landlord return a security deposit?

Under MCA 70-25-202, a Montana landlord returns the full deposit within 10 days if there are no charges, or within 30 days with a written, itemized list if anything is deducted.

What are the landlord-tenant laws in Montana?

The Montana Residential Landlord and Tenant Act of 1977, in Title 70, Chapter 24 of the Montana Code Annotated, governs residential rentals. Security deposits are covered in Title 70, Chapter 25.

Do I need a license to be a landlord in Billings?

Requirements differ for long-term and short-term rentals. Confirm with the City of Billings before you list, especially for stays of fewer than 30 days.

Before you rely on any of this

This article provides general real estate information and is not legal or tax advice. Landlord-tenant rules, taxes and local requirements depend on the specific property and your situation. Confirm them with a Montana real estate attorney, a tax professional and the City of Billings before you rent a property.

Weighing whether a Billings property works as a rental? Start with the Billings real estate investing page, or call or text Gene at 406-861-4844.

Gene Hauck is a Real Estate Broker and REALTOR® with The Morales Group at Engel & Völkers Billings, 1921 1st Ave N, Billings, MT 59101. Montana license RRE-BRO-LIC-135399. 406-861-4844.