Montgomery, Baton Rouge and Quebec City: Positive Spreads, No Safe Starts Yet
This week's screen finds positive 60% occupancy spreads in Montgomery, Baton Rouge, and Quebec City, but all three remain WAIT decisions because regulation, downside durability, or public operator-profit validation is still incomplete.
The regulation weather is proposal-heavy, not statute-heavy. Montgomery's July 31 reporting describes a proposed short-term-rental ordinance headed for a public hearing and a vote, with residents objecting to party-house impacts and density. That is active regulatory risk, not an enacted rule. I found no verified STR ordinance tightening or loosening in Montgomery, Baton Rouge, or Quebec City during July 26-August 2. WAKA's July 31 report | Montgomery's proposed ordinance PDF
That opening matters because all three markets pass the first spreadsheet test, but none passes the whole diligence test. This is a screen for an operator with $5,000-$20,000 of starting capital, not a promise that a lease can be signed this week. The hard filter requiring a recent, public, city-specific disclosure of a profitable operator running at least three units remains unverified for all three picks. A July 29 press release says a client built 12 units in Birmingham, Alabama, but assigns the explicit $10,000 first-month profit claim to a Phoenix client, not Birmingham. That is marketing evidence, not validation. Markets Insider source
The screen in one table
| City | Population reference | AirDNA ADR / occupancy | 2BR long-term-rent reference | 60% modeled cash flow | Regulation | Start in 30 days? |
|---|---|---|---|---|---|---|
| Montgomery, AL | 195,300 (2025) | $141 / 61% | $1,000 | +$103/mo | Yellow: ordinance proposed, not enacted | Wait |
| Baton Rouge, LA | 222,795 (2025) | $179 / 48% | $1,100 | +$589/mo | Yellow: permit and use rules apply | Wait |
| Quebec City, QC | 549,459 (2021) | C$140 / 67% | C$1,520 asking benchmark | + C$567/mo | Yellow: municipal zoning plus Quebec registration; freeze in some zones | Wait |
All three pass the channel's initial spread gate:
ADR x 30.4 days x 60% occupancy > monthly rent x 1.35Montgomery clears it at
$2,572 > $1,350; Baton Rouge at $3,265 > $1,485; Quebec City at C$2,554 > C$2,052. The figures are rounded; calculations below use the unrounded products. The AirDNA pages were updated July 5, 2026 and report data through June. Montgomery AirDNA | Baton Rouge AirDNA | Quebec AirDNAPopulation references are not synchronized: the U.S. figures are July 1, 2025 estimates, while Quebec City's figure is the 2021 Census Profile. That is sufficient for the population screen, not a claim about current growth. U.S. Census city totals | Statistics Canada Census Profile
The model: visible assumptions, no false leverage
This is lease arbitrage. The operator controls a furnished unit through a long-term lease; there is no property mortgage in the P&L. “Leveraged” here means using a relatively small cash base to control a larger revenue-producing lease, which makes a bad lease more dangerous, not less.
The common model uses 30.4 days per month and 18.24 booked nights at 60% occupancy. It assumes a four-night average stay, or 4.56 turnovers per month, and a 15.5% Airbnb host-only fee. Airbnb says most hosts on that fee structure pay 15.5%. Airbnb service-fee explanation
The following are underwriting assumptions, not local quotes: $350 per month for utilities and internet, $90 per turnover for cleaning, and $310 per month for insurance, maintenance reserve, and consumables. I keep these inputs visible so a reader can replace them with a local quote. Guest lodging taxes are excluded only if they are collected from the guest and remitted separately. Management labor, furnishing purchases, furnishing debt, income tax, security deposits, and startup cash are not included. Those omissions should reduce the amount you are willing to put into a lease.
For Quebec City, all figures in the unit model are Canadian dollars. The non-rent operating assumptions are shown as C$350, C$90 per turnover, and C$310 per month. They are placeholders for diligence, not claims about Quebec operating costs.
1. Montgomery: a positive screen colliding with a live ordinance
Snapshot. AirDNA reports 833 active listings, $18.2K average annual revenue, 61% occupancy, $141 ADR, and an $80 RevPAR for the market, updated July 5 through June 2026. Zillow's Montgomery market page reported a $1,000 average two-bedroom rent on August 1, 2026. The 2025 U.S. Census estimate is 195,300 residents. AirDNA Montgomery | Zillow Montgomery rent | U.S. Census city totals
Screen math. At 60%, gross room revenue is $2,571.84. The first gate compares that with $1,350, or 1.35 times rent. It passes comfortably. The operating model does not.
Modeled monthly P&L:
| Line item | Amount |
|---|---|
| Gross room revenue: $141 x 18.24 nights | $2,572 |
| Airbnb host fee, 15.5% | -$399 |
| Long-term rent | -$1,000 |
| Utilities and internet assumption | -$350 |
| Cleaning: $90 x 4.56 turns | -$410 |
| Insurance, maintenance reserve, consumables assumption | -$310 |
| Modeled operating cash flow | +$103 |
The model is positive only because the observed ADR and the 60% hurdle are doing nearly all the work. At 50% occupancy, the same stack is about -$191 per month; at 40%, it is about -$485. That is before furniture financing or management labor.
Two submarkets to test:
- Downtown / Riverfront: use it as a first comp set for walkability, events, and business travel, but price against the exact building and parking situation.
- Midtown / Forest Park: test neighborhood demand and longer stays separately from downtown. Do not assume city-average ADR transfers to a residential block.
Regulation traffic light: Yellow. Montgomery does not give this screen a stable, enacted permit path. The July 31 WAKA report says the proposed ordinance was expected to come before the council for a public hearing and vote. It describes resident complaints about large parties in Arrowhead and quotes the council president saying the city intends to fine and vacate problem properties. The same report points readers to the proposed ordinance, which discusses business permit fees, lodging taxes, and penalties but is not yet law. Read the proposed ordinance and the City of Montgomery public-notice page. Ask the city for written confirmation of the address-level use, application, business-license, tax, inspection, and enforcement path after the vote. Until then, there is no defensible “sign now” answer.
MTR signal. Furnished Finder's Montgomery page description showed 222 furnished rentals and 119 available, with visible monthly examples from about $900 to $5,000 and two-month-plus stays. That is supply, not demand or occupancy; it supports testing an MTR fallback, not the $103 nightly model. Furnished Finder Montgomery
First 90 days: Days 1-7: do not pay a deposit; obtain the enacted ordinance, written zoning answer, landlord permission, and an insurance quote. Days 8-30: only after those answers, furnish one unit with a mid-term-capable layout and run a conservative comp set. Days 31-60: measure actual ADR, weekday pickup, utility burn, and complaint events against the 60% model. Days 61-90: require enough reserve to survive the modeled 40% loss before considering another lease.
30-day answer: WAIT. This is the weakest financial cushion of the three, and the governing rule is still moving.
2. Baton Rouge: the best U.S. margin, but occupancy is the trap
Snapshot. AirDNA reports 1,533 active listings, $15.6K average annual revenue, 48% occupancy, $179 ADR, and $73 RevPAR, updated July 5 through June 2026. Zillow reported a $1,100 average two-bedroom rent on August 1. The 2025 U.S. Census estimate is 222,795 residents. AirDNA Baton Rouge | Zillow Baton Rouge rent | U.S. Census city totals
Screen math. Gross revenue at the 60% hurdle is $3,264.96, versus $1,485 for rent times 1.35. Baton Rouge therefore clears the top-line test by the widest U.S. margin in this issue. The 48% observed occupancy is the core risk.
Modeled monthly P&L:
| Line item | Amount |
|---|---|
| Gross room revenue: $179 x 18.24 nights | $3,265 |
| Airbnb host fee, 15.5% | -$505 |
| Long-term rent | -$1,100 |
| Utilities and internet assumption | -$350 |
| Cleaning: $90 x 4.56 turns | -$410 |
| Insurance, maintenance reserve, consumables assumption | -$310 |
| Modeled operating cash flow | +$589 |
At 50% occupancy, the same model is about +$197. At 40%, it is about -$194. The 48% observed occupancy sits close to the break-even zone, so the $589 result is a hurdle case, not a forecast.
Two submarkets to test:
- Downtown / riverfront: build a comp set around parking, event dates, and business travel; do not use a high-ADR listing with a different bedroom count as the comp.
- LSU / Southdowns: test student-family, medical, and visiting-professional demand separately. The operating question is whether a 30-day-plus fallback can carry weak nightly months, not whether the neighborhood sounds attractive.
Regulation traffic light: Yellow. The official East Baton Rouge Parish Chapter 9 - Use Regulations PDF is the document to read before leasing. Its short-term-rental provisions establish that a permit is required, that the permit remains valid unless the STR ceases operation for one year, that total occupancy is two persons per bedroom plus two, and that one parking space is required for each bedroom used for the STR unless an alternative motor-vehicle parking arrangement is approved. Confirm the exact application, inspection, tax, and address-level zoning path with the issuing office; the public PDF evidence does not give me a reliable fee figure, so I am not inventing one.
The compliance checklist is therefore concrete: written landlord permission for transient use, Chapter 9 permit confirmation, bedroom and occupancy calculation, parking plan, insurance, tax treatment, and a check for any HOA or condominium ban. A permit is not a substitute for lease permission.
MTR signal. The Furnished Finder Baton Rouge page description showed 247 furnished rentals and 143 available, while the visible result set returned a different count. Rates displayed ranged from roughly $875 to $4,000 per month. This is a live supply page, not an occupancy survey; use it to test 30-day-plus stays, not to claim nurses will fill the unit. Furnished Finder Baton Rouge
First 90 days: Days 1-7: get the permit and zoning answer for the exact address, not just the city name; collect landlord consent and the parking plan. Days 8-30: furnish one unit, launch a nightly listing only after the permit path is clear, and add a 30-day-plus listing aimed at professionals. Days 31-60: track actual occupancy against the 48% observed market figure and the 60% hurdle separately. Days 61-90: keep the second lease off the table unless the unit survives a 40% month and the permit, tax, and complaint record are clean.
30-day answer: WAIT. Baton Rouge has the best modeled margin, but the actual market occupancy is below the model's break-even target and public three-unit profit validation is missing.
3. Quebec City: the Canadian spread is real, the zoning gate is not optional
Snapshot. AirDNA reports 3,123 active listings, $20.4K average annual revenue, 67% occupancy, $140 ADR, and $87 RevPAR, updated July 5 through June 2026. The saved AirDNA page labels these figures in dollars but does not state the currency; because Quebec City is the Canadian market, this article models the figures as Canadian dollars and you should confirm currency before using the model. The 2025 CMHC table reports a C$1,277 average two-bedroom rent in apartment structures of three or more units; a Statistics Canada asking-rent table places the two-bedroom Quebec CMA benchmark at C$1,520 in 2025 Q3. I use the higher C$1,520 asking benchmark in the P&L. AirDNA Quebec City | CMHC average rents table | Statistics Canada asking rents
Statistics Canada's 2021 Census Profile puts Québec city at 549,459 residents. Statistics Canada Census Profile
Screen math. C$140 x 18.24 nights produces C$2,553.60, compared with C$2,052 for the asking rent times 1.35. It passes, but the spread is much less forgiving if AirDNA's dollar label is not Canadian or if the address cannot operate nightly.
Modeled monthly P&L, all CAD:
| Line item | Amount |
|---|---|
| Gross room revenue: C$140 x 18.24 nights | C$2,554 |
| Airbnb host fee, 15.5% assumption | -C$396 |
| Long-term asking-rent benchmark | -C$1,520 |
| Utilities and internet assumption | -C$350 |
| Cleaning: C$90 x 4.56 turns | -C$410 |
| Insurance, maintenance reserve, consumables assumption | -C$310 |
| Modeled operating cash flow | +C$567 |
Using the lower C$1,277 CMHC average instead would show about C$810, but an arbitrage operator competes for a current lease, not a province-wide average. The higher asking benchmark is the more useful underwriting input. At 40% occupancy, the asking-rent model is about -C$376 per month.
Two submarkets to test:
- Vieux-Québec: use it as a tourist-demand comp set only after the city confirms that the exact zone can add a commercial tourist-accommodation establishment. A recognizable tourist address is not a permit.
- Sainte-Foy: test institutional, hospital, university, and longer-stay demand separately from the historic core. Treat this as a comp-set hypothesis and verify the exact zoning and building rules before spending on furniture.
Regulation traffic light: Yellow. Quebec's official registration page says an establishment offering tourist accommodation for remuneration for periods of 31 days or less must be registered. Before applying, the operator must obtain an official municipal document confirming compliance with urban-planning rules. The application materials include a title, tax bill, or lease; at least C$2 million in civil-liability insurance per event; lease or condominium provisions allowing tourist accommodation, or owner/condominium authorization; and identifying exterior and interior photos. The 2026 registration fee listed for general tourist accommodation is C$156. Quebec government registration requirements
The city added a second layer of uncertainty: its April 13 announcement says it imposed a temporary 150-day freeze on adding new commercial tourist-accommodation establishments in some zones to favor residents' return to Vieux-Québec. The public announcement does not give this screen enough address-level detail to call any Vieux-Québec lease safe. Read the City of Quebec announcement and use the city's 311 information record for tourist-accommodation authorization to obtain the municipal document before signing. The provincial registration does not override municipal zoning, a lease clause, or a condominium declaration.
MTR signal. The Furnished Finder Quebec City page returned no usable city-specific count or rate in the evidence available for this screen. That is not evidence of weak demand; it is an evidence gap. A 30-day-plus listing may be the better legal and occupancy fallback, but verify local demand through live comparable listings before underwriting it. Furnished Finder Quebec City
First 90 days: Days 1-7: screen the address against municipal zoning, the freeze zones, the lease, and any condominium declaration; do not treat the C$156 provincial fee as permission. Days 8-30: only after the municipal document and C$2 million insurance are in hand, furnish one unit and test both nightly and 30-day-plus positioning. Days 31-60: reconcile actual CAD receipts, platform fees, cleaning, and tax obligations; confirm the AirDNA currency. Days 61-90: keep a reserve for a 40% occupancy month and do not add a second unit until the municipality's written path survives a full review.
30-day answer: WAIT. The market data clears the math, but the municipal freeze and address-level document are hard gates.
What would change these calls?
The three markets are worth diligence calls, not deposits. The next screen should promote a city only when four items are in the file:
- A signed lease addendum expressly permitting Airbnb, VRBO, and 30-day-plus stays.
- A written city or municipal answer for the exact address, including the ordinance section, permit status, parking or occupancy conditions, and tax account.
- A local insurance quote and enough reserve to survive the 40% sensitivity case.
- A public, recent, city-specific operator disclosure showing three or more units and actual profit, not just a portfolio count, a sales pitch, or a different city's testimonial.
Montgomery is the no-go on margin and legislative timing. Baton Rouge is the closest to a worthwhile underwriting candidate, but only if the address clears Chapter 9 and the operator can prove that 60% occupancy is attainable despite the 48% market reading. Quebec City is the strongest Canadian screen on occupancy, but the municipal freeze and incomplete currency/address evidence make the lease decision premature.
This week's answer is therefore WAIT in all three cities. Positive spread is an invitation to verify the lease and ordinance. It is not permission to sign one.
Sources and method
Market data: AirDNA Montgomery, AirDNA Baton Rouge, and AirDNA Quebec. Long-term rent and population: the Zillow, Statistics Canada, CMHC, and U.S. Census links placed next to each city. Regulation: the Baton Rouge Chapter 9 PDF, the Montgomery proposed ordinance, the Montgomery WAKA report, and the Quebec government and City of Quebec links above.
The model excludes furnishing, management, taxes, deposits, and bad-lease costs. Those omissions reinforce WAIT; they do not justify rounding cash flow up.
Airbnb Arbitrage Cash Flow
Each week, 3 mid-sized North American cities where Airbnb arbitrage (long-term rent → short-term sublet) generates positive monthly cash flow — with full model, neighborhood picks, and regulation traffic light.
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