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Rental Car in Bavaria

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My wife and I are flying into Munich and taking the train to Salzburg. After we have finished our time in Salzburg, we plan to take the bus to Berchtesgaden for several days. We would like to rent a car there so we can travel around the area. On our way back to Munich, we plan to stop to see Herrenchiemsee. My question is should we rent the car in Salzburg instead of taking the bus and return the car there (to avoid drop off fee in another country) before taking the train back to Munich? I don't know what to expect during Octoberfest in Munich in terms of traffic. Or is there somewhere where we can drop the car somewhere just outside Munich and stay with the plan of renting in Berchtesgaden?

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