Is Annapolis, Maryland Good for Airbnb Investment?

Potentially—Annapolis, Maryland combines visitor demand with long-term real estate upside.

• Offers a promising outlook driven by its strong historical appeal and consistent tourism.
• Annapolis, as the state capital and a prominent waterfront city, attracts visitors year-round for its rich history, sailing events, Naval Academy, and charming downtown.
• Current market conditions in Annapolis show a stable real estate market with steady property values, supported by desirable demographics and limited inventory.
• Tourism trends indicate consistent demand for unique accommodations beyond traditional hotels, especially during peak seasons and various festivals.
• While property values can be higher due to the city's desirability, the potential for solid rental income and capital appreciation makes Airbnb a potentially good investment in Annapolis.

$2,800–$4,500 per month based on location, season, and property quality.

• Based on available market data, Airbnb hosts in Annapolis, Maryland typically earn between $2,800 to $4,500 per month during peak season and $1,800 to $3,200 during off-peak periods.
• Seasonal variations show strongest performance from May through September when Naval Academy events, sailing season, and summer tourism drive occupancy rates to 70-85%.
• Properties within walking distance of downtown or the waterfront command premium rates, while those near the Naval Academy benefit from consistent demand during academic events and graduation periods.
• Key factors affecting earnings include proximity to Historic Intown Annapolis, property size and amenities, professional photography and listing optimization, responsive host communication.
• Whole-home rentals consistently outperform private rooms by 40-60% in revenue generation, with waterfront properties and those featuring parking commanding the highest premiums in this competitive short-term rental market.

Potentially strong—typical annual ROI is 8–14%.

• Typically generate ROI between 8-14% annually, with waterfront and downtown properties near the Naval Academy achieving the higher end of this range due to consistent demand from military families, tourists.
• The average payback period for initial investment ranges from 7-12 years depending on property location and purchase price.
• Short-term rentals in Annapolis generally outperform long-term rentals by 3-6 percentage points, as traditional rental properties in the area typically yield 5-8% ROI annually with average monthly rents of $1,800-2,800 for comparable properties.
• The seasonal nature of Annapolis tourism creates occupancy rates of 65-75% during peak months (April through October) but drops to 35-45% in winter months.
• Properties within walking distance of the waterfront, State Circle, or Naval Academy command the highest premiums and most consistent bookings.

Annapolis, Maryland averages 65–70% annual occupancy, with seasonal variation.

• Airbnb occupancy rates in Annapolis, Maryland typically average around 65-70% annually, with significant seasonal variation driven by the city's maritime tourism and Naval Academy events.
• Peak occupancy occurs during summer months (June through August) when rates climb to 80-85%, coinciding with sailing season, waterfront activities, and graduation ceremonies at the U.S.
• Naval Academy.
• Spring and fall maintain moderate occupancy around 60-65%, while winter months drop to 45-50% due to reduced tourism and harsh weather conditions.
• Annapolis performs slightly above Maryland's statewide average of 62% due to its unique position as both the state capital and a historic waterfront destination.
• The city's occupancy is particularly influenced by Naval Academy football games, boat shows, and sailing regattas which create demand spikes throughout the year.

The strongest opportunities balance visitor demand, nightly rates, and acquisition cost.

• The Historic District stands out as the premier Airbnb investment area due to its cobblestone streets, colonial architecture, and walking distance to the Naval Academy, State House, and waterfront dining.
• Eastport offers excellent value with its maritime charm, proximity to the harbor, and growing arts scene while maintaining more affordable property acquisition costs and attracting visitors seeking authentic nautical experiences.
• West Annapolis provides strong investment potential with its mix of historic homes and modern amenities.
• The Naval Academy area captures consistent demand from visiting families, prospective students, and military personnel.
• Murray Hill attracts investors seeking emerging opportunities with its tree-lined streets, proximity to shopping and restaurants.
• Parole offers modern amenities and easy highway access making it attractive for business travelers and families.
• Downtown Core properties, while requiring higher initial investment, generate exceptional returns through proximity to restaurants, bars, and entertainment venues.

Yes, but only where zoning permits short-term rentals and every required license is current.

• In Annapolis, Maryland, short-term rentals are regulated under the city's zoning ordinance and require a special exception permit through the Board of Appeals.
• Properties must be owner-occupied as the primary residence, with the owner living on-site during rental periods, and occupancy is generally limited to 2 guests per bedroom plus 2 additional guests.
• Short-term rentals are only permitted in certain residential zoning districts, primarily R1, R2, and R5 zones, and are prohibited in historic districts and some residential areas.
• The registration process involves submitting detailed applications including floor plans, parking arrangements, neighbor notification letters, and proof of liability insurance.
• Recent changes implemented around 2019-2021 have tightened enforcement, increased fines for violations to $1,000 per day, established stricter noise and parking requirements, mandated 24/7 local contact persons.

Tax rates vary by jurisdiction; licensing, inspection, and insurance costs are additional.

• Short-term rentals in Annapolis, Maryland are subject to several fees and taxes including a 13% state and local hotel tax (combining Maryland's 9% state sales tax and Anne Arundel County's 4% hotel tax).
• Property owners must obtain a short-term rental license from the city at an estimated cost of $150-250 annually, along with a business license fee of approximately $50-75.
• Anne Arundel County requires a use and occupancy permit costing around $100-150, and properties may need periodic safety inspections at $75-125 per inspection.
• Additional costs include a one-time registration fee of $25-50 with the state tax department, potential homeowners association fees if applicable.
• Property owners are also responsible for collecting and remitting the 6% Maryland state sales tax on rental income, and must file quarterly tax returns with both state and local authorities.