Investment Property Loans in Annapolis, MD

Annapolis requires a Rental Operating License; the standard license costs $125 per unit per year, the landlord must offer at least a one-year lease, and every licensed rental is inspected once a year.

For investors: A fourplex runs $500 a year in license fees before any repairs the annual inspection turns up. Hard-wired smoke alarms are required in every sleeping room and on each story, which can mean electrical work in older houses near the harbor.

Source: City of Annapolis, Rental Licensing Procedures, Oct 2026

A short-term rental license in Annapolis costs $650 a year if owner occupied and $750 if not, and the licensee must live in the city or hire a local property manager reachable at all times.

For investors: An owner living outside the city needs a manager with a primary residence or office inside Annapolis who answers the phone around the clock, and must report a change of manager within five calendar days. Include that management fee in any short-term projection.

Source: City of Annapolis, Rental Licensing Procedures, Oct 2026

City planning staff report that a licensee may operate only one short-term rental unit in Annapolis, and the city had issued 283 short-term rental licenses as of June 1, 2025.

For investors: City Code section 17.44.090 counts a person together with every entity they hold an interest in, so separate LLCs do not unlock a second license. Staff found only about half of roughly 560 advertised units licensed, and the council has since raised fines aimed at unlicensed listings.

Source: City of Annapolis Department of Planning and Zoning, STR Annual Staff Report (August 19, 2025), Jun 2025

Ordinance O-17-25, adopted October 13, 2025, caps non-owner-occupied short-term rental licenses on each Annapolis blockface at 10% of its residential units, or one license where the blockface has under ten units.

For investors: Licenses on over-cap blockfaces may renew only until November 1, 2027, after which a lottery puts Annapolis and Anne Arundel residents first. A sale ends the license at the end of its term, so pay nothing extra for a seller's short-term income.

Source: City of Annapolis Legislation O-17-25, Limiting Short-term Rentals per Blockface (Legistar), Oct 2025

Annapolis adopted O-40-25 on March 9, 2026, effective on passage, pausing new non-owner-occupied short-term rental licenses for 12 months while renewals of valid licenses and owner-occupied applications continue.

For investors: Through about March 9, 2027, a buyer of a home they will not live in cannot get a new short-term license, and applications pending at adoption are frozen too. Owner occupancy under the ordinance means living there more than half the year, so underwrite current purchases as long-term rentals.

Source: City of Annapolis Ordinance O-40-25, 12-Month Moratorium on New Non-owner-occupied Short-Term Rental Licenses (signed copy), Mar 2026

Resolution R-33-26, adopted September 28, 2026, set Annapolis fines for short-term rental violations at up to $5,000 for initial and repeat offenses, up from the $1,000 long-term rental rate.

For investors: Paired with the moratorium, the new fine makes an unlicensed listing an expensive gamble. If a seller has been booking guests without a license, have those bookings cancelled before settlement instead of honoring them after you take title.

Source: City of Annapolis Resolution R-33-26, Fines Related to City Code 17.44.090 (Legistar), Sep 2026

Short-term rental stays in Annapolis carry Anne Arundel County's 8% occupancy tax on rent, raised from 7% on July 1, 2023, and hosts pay it through the city's short-term rental portal.

For investors: The license application also asks for a Maryland sales and use tax number, plus a county hotel tax account from the city Finance Office for homes with three or more bedrooms. Build the 8% into nightly pricing rather than absorbing it.

Source: City of Annapolis, Short Term Rental Portal (Citizen Self-Service), Oct 2026

Homes rented only during Naval Academy graduation events and the spring and fall sailboat and powerboat shows need no Annapolis license fee; owners file a free registration so occupancy tax can be collected.

For investors: O-17-25 exempts boat show and Commission Week rentals from the blockface cap, and the moratorium says it does not affect council-approved events such as the boat shows. A unit between leases can take those peak bookings, but the 8% tax still applies.

Source: City of Annapolis, Short Term Rental Portal; Rental Licensing Procedures; Ordinances O-17-25 and O-40-25, Oct 2026

The U.S. Naval Academy lists a total enrollment of 4,400 midshipmen and a 338-acre campus in Annapolis; its students are active-duty members of the Navy.

For investors: Long-term demand tied to the Academy comes from faculty, staff and Navy families, while graduation week is one of the event periods the city exempts from short-term license fees. Both support rents in neighborhoods within reach of the Yard.

Source: United States Naval Academy, About USNA, Oct 2026

For fiscal 2027 a property inside Annapolis pays $1.427 per $100 of assessed value: $0.112 state, $0.577 county and $0.738 city.

For investors: A rental assessed at $500,000 owes about $7,135 a year. The city caps yearly taxable assessment growth at 10% and the county at 2%, but only for a principal residence, so a rental absorbs each reassessment in full.

Source: Anne Arundel County Office of Finance, Tax Information for the City of Annapolis, Jul 2026

Anne Arundel County charges a 1% transfer tax on sales under $1 million (1.5% at $1 million or more) plus a recordation tax of $7 per $1,000, on top of Maryland's state transfer tax.

For investors: On a $600,000 purchase the county transfer tax alone is $6,000. Recordation falls on the deed, since state law exempts a qualifying purchase money deed of trust, but a later cash-out refinance owes the county rate on new principal above the old balance.

Source: Anne Arundel County Office of Finance, Recordation and Transfer Tax, Oct 2026

Annapolis allows one accessory dwelling unit per lot, capped at 850 square feet outside the main house's footprint; it needs a rental license, and the owner must live in one of the two units.

For investors: The residency rule makes a house with an ADU an owner-occupant play, not a pure investment. O-15-25, which would have dropped it, was withdrawn, and planning staff said that from November 1, 2025 a backyard building could be a short-term rental only if it qualifies as a full ADU.

Source: Annapolis City Code 21.64.010, Accessory dwellings (Municode), Oct 2026

NOAA's Annapolis tide gauge recorded 25 minor and 2 moderate high-tide flood days in 2024, and NOAA's outlook for May 2026 through April 2027 projects 15 to 19 such days.

For investors: Tides at these levels reach the lowest waterfront streets, so price flood insurance and check parking access before buying near the downtown harbor. The 2024 total was the highest calendar-year count in the gauge's NOAA record, which runs back to 1928.

Source: NOAA CO-OPS high tide flooding annual counts and meteorological-year outlook (projected June 24, 2026), Annapolis station 8575512, Jun 2026