Rent Local Incentives: An Owner’s Guide

Are you considering renting your Big Sky property to local workers but unsure how to make the numbers work? You’re not alone. With tight inventory and strong seasonal demand, it can be hard to balance income, compliance, and community impact. In this guide, you’ll learn how local programs like Rent Local work, which incentives actually attract qualified tenants, and how to set up your lease and taxes the right way. Let’s dive in.

Why incentives matter in Big Sky

Big Sky’s rental market is unique. It’s a small resort community with limited long-term housing and a highly seasonal economy. Local reports point to a very low vacancy rate in recent years and rising home values, which makes stable, workforce housing harder to find for year-round employees.

For you as an owner, smart incentives can reduce vacancy and create predictable returns. They can also open the door to cash payments from local programs in exchange for renting to qualified workers on longer leases.

Two local programs to know

Rent Local at a glance

The Big Sky Community Housing Trust runs the Rent Local program, which pays owners cash to lease homes to local workers for one to two years. You must rent to tenants who meet local employment criteria, agree to program rules, and follow a payment schedule. Enrollment can pause or use waitlists depending on funding. Review eligibility, rent caps, and current payment timing on the program page at the Big Sky Community Housing Trust.

Good Deeds overview

BSCHT’s Good Deeds offers a one-time payment in exchange for a permanent deed restriction that limits occupancy to the local workforce and prohibits short-term rentals. This option can help owners who want long-term stability and are comfortable with a permanent local-use restriction. Learn more on the Good Deeds page.

Incentives you can offer

Cash and rent concessions

Short-term discounts can fill a vacancy fast. Examples include a first-month credit, a small signing bonus, or a limited-time rent reduction spread over the first few months. Always model your effective annual rent so you know the true impact on cash flow. For strategy basics, see guidance on rent concessions.

Non-cash benefits

You can add value without cutting monthly rent:

• Include select utilities, like internet or heat, and price accordingly.
• Offer a furnished option for an easy move-in.
• Allow pets with clear rules and a modest pet fee. These can broaden your applicant pool and reduce time on market.

Move-in assistance and deposits

Consider a reduced security deposit for well-qualified applicants or allow installments. Montana law does not cap deposit amounts, but you must itemize deductions and return deposits within statutory timelines. Review the security deposit rules in the Montana Code.

Lease term and flexibility

Multi-year leases with clear annual increases can stabilize income and reduce turnover. Seasonal flexibility can also work when coordinated with employer hiring cycles. Put rent escalations and renewal terms in writing.

Energy upgrades that pay back

Efficiency improvements can lower operating costs and help marketing. Explore state rebates and utility incentives via the Montana DEQ energy programs and NorthWestern Energy rebates before you invest.

Short-term vs long-term rules in Big Sky

If you are weighing short-term vs long-term use, understand the tax and zoning differences first.

• Montana’s Lodging Facility Sales and Use Tax (8% combined) applies to stays under 30 days, with exemptions for 30-day continuous stays to the same occupant. Review current rules with the Montana Department of Revenue.
• The Big Sky Resort Area District collects a separate Resort Tax on short-term lodging. Confirm what applies to your property with the Resort Tax overview.
• Zoning and permits matter. Gallatin County defines short-term rentals and regulates them by district. Check your address and permit needs using the county’s Short-Term Rental FAQs.

If you enroll in Rent Local or accept a Good Deeds restriction, follow those program rules on lease length, occupancy, and use.

Structure incentives the right way

Model the numbers and taxes

Calculate your effective rent after any concessions and the timing of cash received. Keep detailed records for all incentives and payments. The IRS explains rental income, deductions, and recordkeeping in its guidance on rental real estate. Consult a tax professional for your specific situation.

Put it in the lease

Use a written lease that clearly describes the incentive type, amount, and timing. Spell out utilities, furnishings, and renewal mechanics. If you join Rent Local or Good Deeds, include required clauses and any documentation permissions the program requests. Follow Montana timelines and itemization rules for security deposits.

Advertising and screening

Stay compliant with the Fair Housing Act. Use neutral language and objective screening criteria that apply to every applicant. Review HUD’s guidance on advertising and marketing before you publish listings or use third-party screening tools.

Compliance checklist

• Verify zoning and any STR permit requirements for your address via Gallatin County’s STR resources.
• If converting to workforce housing, confirm Rent Local or Good Deeds steps and payment rules with BSCHT: Rent Local and Good Deeds.
• Model effective rent and cash flow, and track receipts. See the IRS tips for rental real estate.
• Use a lease that documents incentives and complies with Montana deposit statutes in the MCA.
• Follow HUD guidance for fair, nondiscriminatory advertising and screening: HUD advertising.

Sample packages that work in Big Sky

Package A: Rent Local starter

• One-year lease to a qualified local worker. Apply to BSCHT and request a Rent Local payment when available. Include utilities in rent and offer a modest move-in credit. Document all terms in the lease. See Rent Local for current eligibility and payment schedules.

Package B: Two-year workforce stability

• Offer a small first-year concession and free internet for a two-year lease. Add a furnishings option if appropriate. Consider energy upgrades supported by Montana DEQ programs. If you want a permanent solution, evaluate Good Deeds.

Package C: Renewal retention

• Provide a one-time renewal credit or professional cleaning at signing instead of lowering ongoing rent. This can reduce turnover costs while keeping your effective rent steady.

Common risks and how to mitigate

• Short-term revenue hit from concessions. Model effective rent and cap total concession dollars.
• Drawing applicants who are not a fit. Keep objective, consistent screening and verify employment when programs allow.
• Tax or zoning missteps. Confirm state lodging, Resort Tax, and county rules before marketing any short-term stays.
• Fair housing issues. Use inclusive ad language and apply the same screening criteria to every applicant.

If you want a data-driven, local plan for your property, let’s talk about valuation, compliance, and the right incentive structure for your goals. Connect with Sunny Odegard to map your options.

FAQs

What is the Rent Local program in Big Sky?

• The Big Sky Community Housing Trust pays owners to lease homes to qualified local workers for one to two years, with set rules and a payment schedule; see the latest details on the Rent Local page.

Do lodging and resort taxes apply to long-term leases in Big Sky?

• Montana’s lodging tax generally applies to stays under 30 days; continuous stays of 30 days or more are commonly exempt, and Big Sky’s Resort Tax applies to short-term lodging, so confirm specifics with the Montana DOR and Resort Tax resources.

What are Montana’s rules on security deposits for rentals?

• Montana does not cap deposit amounts, but landlords must itemize deductions and return deposits within statute timelines; review the rules in the Montana Code.

How can I reduce energy costs to make my rental more attractive?

• Explore rebates and incentives through Montana DEQ energy programs and NorthWestern Energy to offset upgrades like insulation or efficient appliances.