The Real Ceiling on a McHenry Vacation Rental's Income

A listing photographs a loft with two queen beds and calls the house "sleeps 12." A buyer runs the math on that number, plans a rental income projection around it, and puts in an offer near Wisp Resort assuming the county will agree with the listing agent's arithmetic.

It won't. Garrett County doesn't count beds. It counts bedrooms, and only the ones that meet a specific legal definition. That loft with the two queen beds might not be a bedroom at all in the eyes of the Transient Vacation Rental Unit ordinance, which means the real occupancy ceiling on that house could be several guests lower than the number on the listing, and the projected income lower still.

This is the part of buying a short-term rental near Wisp that rarely makes it into a walk-through. Everyone talks about proximity to Chair 4 or the "Down Under" trail, or whether the place sits close enough to the lake to call itself lake access. Almost nobody talks about the window.

The Formula Behind the Number

Garrett County licenses short-term rentals in the Deep Creek Lake Watershed Zoning District as Transient Vacation Rental Units, or TVRUs. The ordinance defines legal occupancy with a simple formula: two guests per bedroom, plus four additional guests. A five-bedroom house tops out at 14 legal overnight guests. A four-bedroom house tops out at 12.

The catch is in what counts as a bedroom. Under the ordinance, a room only qualifies if it has proper egress, meaning a door or window that meets a minimum size and leads directly outside the structure. A finished loft, a converted den, or a bonus room with a small decorative window can be furnished, photographed, and rented as sleeping space, but it does not count toward the license's bedroom total unless it meets that egress standard.

So two houses that look identical in a listing description, both "5 bedrooms plus a loft, sleeps 12," can carry two different legal ceilings. One has five true bedrooms and a loft that doesn't count, capping it at 14 guests under the formula. The other has what's actually a sixth legal bedroom, pushing its ceiling to 16 guests and its license into an entirely different category, which matters more than it sounds like it should.

Why the Sixth Bedroom Changes the Transaction

Garrett County splits TVRU licensing into two tracks. A property with five bedrooms or fewer gets a straightforward change-of-application when it changes hands. The seller had a license, the buyer takes over the license, paperwork moves through the county's Office of Licensing and Enforcement, and the rental keeps operating without much of a gap.

A property with six to eight bedrooms doesn't get the quiet version. It requires a special exception variance hearing before the license can transfer, and that means a public process with a timeline the buyer doesn't fully control. If a closing date is set assuming the rental income starts on day one, and the property turns out to sit on the six-bedroom side of that line, the buyer is now waiting on a hearing before the calendar they built their offer around means anything.

This is exactly the kind of detail that separates a buyer who priced the house correctly from one who priced the listing's marketing copy. A six-bedroom home near Wisp might command a higher purchase price because it can, in theory, sleep more guests and earn more per week. But that theoretical ceiling comes with a licensing hurdle the five-bedroom house down the road never has to clear. The premium only makes sense if the buyer has already budgeted for the hearing, the timeline, and the possibility that the transfer doesn't move as fast as the seller's rental calendar suggests it will.

Above eight bedrooms, the county doesn't permit the property as a TVRU at all. It gets treated as a lodging facility instead, a different regulatory category entirely.

The Rest of the License, Before You Waive Anything

Bedroom count decides the ceiling, but the ordinance has a full list of items a county inspector checks before issuing or renewing a license, and each one is worth confirming during due diligence rather than discovering after closing.

A license that already exists on the property can usually transfer to a new owner, which saves time. But an existing license doesn't mean the license matches current reality. If a previous owner finished a garage into a sixth bedroom without pulling a permit, or let the hot tub maintenance contract lapse, that gap surfaces at renewal, not at closing, and it becomes the new owner's problem to fix.

What This Means When the Purchase Price Already Reflects the Season

McHenry's rental market has had a strong run. Residential sales activity across Garrett County through the first half of 2026 came in well ahead of the same period a year earlier, with total dollar volume climbing significantly and a noticeable share of that increase driven by higher-end sales, some well above the seven-figure mark. Average and median prices both moved up alongside that activity.

That kind of market rewards sellers who can point to strong historical rental numbers. It also means buyers are often paying a premium that assumes the property's rental performance continues at the same pace. If that performance was built on an occupancy count the county wouldn't actually license today, the buyer isn't just inheriting a house. They're inheriting a gap between what the previous owner advertised and what the next license renewal will approve.

This is why the bedroom formula matters more in a rising market than a flat one. When prices are climbing on the strength of rental income, the legal ceiling on that income becomes the thing worth verifying before the number gets built into an offer.

What to Confirm Before You Write the Offer

Ask for the current TVRU license and its renewal date, not just a verbal confirmation that "it's licensed." Ask which rooms the county recognizes as bedrooms on that license, and compare that number to what the listing calls the sleeping capacity. If the answer is six bedrooms or more, ask specifically whether a special exception hearing has already happened for this property, or whether the transfer will need one.

Walk every room the listing counts as a bedroom and check the window. If it doesn't open to the outside at a size that meets the egress standard, that room is furniture and square footage, not licensed occupancy.

None of this eliminates the appeal of buying near Wisp for rental income. The four-season draw that pulls skiers in winter and lake visitors in summer is real, and it's part of why this market has held up. But the number that determines what that appeal is actually worth on paper isn't the one in the listing headline. It's the one a county inspector signs off on, room by room, window by window.

Two Things Buyers Ask Early

Does a "flex room" without a closet still count as a bedroom? Closets aren't part of the county's bedroom definition. Egress is. A room can lack a closet and still count, or have a closet and still fail to qualify, depending entirely on whether it has a compliant door or window leading outside.

What happens if the TVRU license lapsed before the sale? A license that lapses for two consecutive years loses its grandfathered status and has to go through the full Deep Creek Lake Watershed Zoning Ordinance process from scratch, the same one new construction goes through. That's a materially longer and less certain path than a simple transfer, and it's worth confirming the license is current before assuming a quick handoff.

Bedroom by bedroom, window by window, this is the kind of detail that turns a rental projection into a number you can actually rely on. If you're weighing a property near Wisp or anywhere else around Deep Creek Lake and want a clear read on what its license would actually support, Chef's Edge Real Estate is glad to walk the property with you before you write the offer. Let's Connect.