Is Bay St. Louis, Mississippi Good for Airbnb Investment?

To start an Airbnb in Bay St. Louis, Mississippi, begin by researching local zoning laws and regulations through the Bay St. Louis Planning Department, as the city requires short-term rental permits and compliance with residential zoning restrictions that typically limit rentals to no more than 30% of units in certain areas. Obtain necessary permits including a business license from Bay St. Louis City Hall (approximately $50-100), a short-term rental permit (around $200-300 annually), and ensure compliance with Mississippi state tax requirements by registering for sales tax collection. Find a suitable property by focusing on areas near the beach, downtown historic district, or neighborhoods within walking distance of attractions, with properties typically ranging from $150,000-400,000 depending on proximity to water and condition. Furnish the space with coastal-themed décor, essential amenities like WiFi, air conditioning, full kitchen appliances, quality linens, and safety features including smoke detectors and fire extinguishers as required by local fire codes. List your property on Airbnb, VRBO, and other platforms with professional photography highlighting the Gulf Coast location, competitive pricing around $80-200 per night depending on size and location, and emphasize proximity to beaches, casinos, and New Orleans (45 minutes away). Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating key exchanges or installing smart locks, maintaining the property regularly due to coastal humidity and salt air, and building relationships with local cleaning services and maintenance contractors familiar with Bay St. Louis short-term rental requirements.

To identify profitable short-term rental properties in Bay St. Louis, Mississippi, focus on waterfront or water-view locations within walking distance of the beach, downtown historic district, and popular restaurants like The Reef or Trapani's Eatery, as proximity to the Gulf Coast beaches and casino gaming at nearby Hollywood Casino drives tourism demand. Target 2-4 bedroom properties built after 1990 with modern amenities, outdoor spaces like decks or patios, parking for multiple vehicles, and hurricane-resistant features, while avoiding flood-prone areas without proper elevation or flood insurance considerations. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against comparable properties in the $100-200 per night range typical for coastal Mississippi markets, analyzing seasonal demand patterns with peak rates during summer months and special events like Mardi Gras and fishing tournaments. Research competition by studying existing STR listings within a 3-mile radius, identifying gaps in amenities or property types, and monitoring occupancy rates of similar properties through tools like AllTheRooms and Transparent, while checking local regulations through Hancock County and Bay St. Louis city offices regarding STR permits and restrictions. Utilize market-specific resources including the Mississippi Gulf Coast tourism data, local real estate agents familiar with investment properties, flood zone maps from FEMA, and rental management companies like Vacasa or RedAwning that operate in the Gulf Coast region to understand operational costs and revenue potential.

To obtain an Airbnb/STR permit in Bay St. Louis, Mississippi, you must first contact the Bay St. Louis Planning and Zoning Department at City Hall located at 344 Highway 90, Bay St. Louis, MS 39520, or call (228) 467-9048 to submit an application for a short-term rental permit. Required documents typically include a completed STR application form, proof of property ownership or lease agreement, certificate of occupancy, fire safety inspection certificate, liability insurance policy (minimum $1 million coverage), floor plan showing maximum occupancy, contact information for a local property manager or 24-hour contact person, and payment of applicable fees. The permit fee is approximately $200-300 annually, with additional inspection fees of around $75-100. You must also obtain a Mississippi sales tax permit from the Department of Revenue and register with the city for local occupancy tax collection (typically 2-4% of gross rental income). The property must comply with Bay St. Louis zoning ordinances, maintain adequate parking (usually 1 space per bedroom), meet fire safety requirements including smoke detectors and fire extinguishers, and limit occupancy to 2 persons per bedroom plus 2 additional guests. The approval timeline is typically 30-45 days after submitting a complete application, pending inspections and zoning compliance verification. Annual renewal is required with updated insurance documentation and compliance certification.

Short-term rentals (STRs) are legal in Bay St. Louis, Mississippi, but operate under specific municipal regulations that require property owners to obtain proper permits and business licenses from the city. The city allows STRs in most residential zones but typically requires a minimum rental period of 2-3 nights and mandates that properties meet safety standards including smoke detectors, fire extinguishers, and occupancy limits based on square footage. Properties must be registered with the city and owners are required to collect and remit local hotel/motel taxes, usually around 2-4% of rental income. Bay St. Louis has implemented noise ordinances and parking requirements that STR operators must follow, and there are restrictions on the total number of guests and vehicles allowed per property. The city has been gradually tightening regulations since around 2018-2020 following increased tourism after Hurricane Katrina recovery efforts, with recent changes focusing on ensuring STRs don't negatively impact residential neighborhoods while still supporting the local tourism economy that is vital to this coastal Mississippi community.

The most promising Airbnb investment areas in Bay St. Louis, Mississippi include the Historic Downtown District along Main Street and Second Street, which attracts tourists with its antique shops, art galleries, and proximity to the beach, particularly during events like the Second Saturday Art Walk and Cruisin' the Coast car show in October. The Beach Boulevard corridor offers excellent potential due to its direct Gulf Coast access and proximity to Bay St. Louis Beach, drawing summer vacationers and fishing enthusiasts year-round. The Old Town residential area near the harbor provides charm for visitors seeking authentic coastal experiences while being walking distance to restaurants like The Reef and local seafood establishments. The area around Bay St. Louis-Hancock County Airport sees business traveler demand, especially with NASA Stennis Space Center employees and contractors visiting the region. Properties near the Bay St. Louis Bridge connecting to Pass Christian benefit from overflow tourism from larger Gulf Coast destinations, while the Waveland border area captures visitors attending events at nearby casinos and golf courses, making these neighborhoods particularly attractive for short-term rental investments.

Bay St. Louis, Mississippi imposes a 2% municipal lodging tax on short-term rental accommodations including Airbnbs, which applies to stays of less than 30 consecutive days. Additionally, Mississippi state sales tax of 7% applies to lodging services, bringing the total tax burden to approximately 9% on rental fees. Hancock County may impose an additional 2-3% tourism or occupancy tax, though this varies by specific location within the county. These taxes are typically collected by the host at the time of booking or payment and must be remitted monthly to the Mississippi Department of Revenue for state taxes and quarterly to Bay St. Louis city offices for municipal taxes. Hosts must register for a sales tax permit with the state and obtain a business license from the city. Properties rented for 30 days or longer are generally exempt from lodging taxes but may still be subject to regular sales tax. Failure to collect and remit these taxes can result in penalties and interest charges, with the Mississippi Department of Revenue conducting periodic audits of short-term rental operators to ensure compliance.

To start an Airbnb in Bay St. Louis, Mississippi, the total initial investment would be approximately $285,000-$320,000. Property purchase costs around $180,000-$200,000 based on median home prices in the area as of 2023-2024. Furnishing a 2-3 bedroom property completely would cost $15,000-$25,000 including furniture, appliances, linens, and decor from retailers like IKEA, Wayfair, and local suppliers. Initial setup costs including professional photography, listing creation, and marketing materials would be $1,500-$3,000. Permits and fees including business license, short-term rental permit, and inspection fees would total $500-$1,200. Insurance for short-term rental coverage would cost $2,000-$3,500 annually. Utility deposits and connections for electricity, water, internet, and cable would be $800-$1,500. First six months of operating costs including utilities ($150/month), cleaning services ($100 per turnover), supplies and maintenance ($200/month), property management software ($50/month), and marketing ($100/month) would total approximately $3,600-$4,800, bringing the complete startup investment to between $285,000-$320,000 depending on property size and finish level.

Airbnb properties in Bay St. Louis, Mississippi typically generate annual revenues between $18,000-$35,000 for modest 2-3 bedroom homes, with beachfront or waterfront properties commanding $40,000-$65,000 annually according to 2023 market data. Operating expenses generally run 35-45% of gross revenue, including cleaning fees ($75-$125 per turnover), property management (15-25%), insurance ($2,500-$4,000 annually), maintenance, and local taxes, resulting in net profit margins of 25-35% for well-managed properties. Success factors include proximity to the beach (properties within 0.5 miles of the Gulf Coast achieve 15-20% higher occupancy rates), professional photography and staging, competitive pricing ($120-$180 per night for standard properties, $200-$350 for premium waterfront), and maintaining high guest ratings above 4.7 stars. A case study of a renovated 1950s beach cottage near the harbor showed $42,000 in annual revenue with $16,800 in expenses, yielding a 60% profit margin, while a typical residential property 2 miles inland generated $22,000 with $9,500 in expenses for a 57% margin, demonstrating that Bay St. Louis offers strong profitability potential due to its growing tourism market, relatively low property acquisition costs compared to other Gulf Coast destinations, and increasing demand from New Orleans area visitors seeking weekend getaways.

Airbnb investments in Bay St. Louis, Mississippi typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14%, driven by the area's proximity to the Gulf Coast and growing tourism sector following post-Hurricane Katrina redevelopment. Properties within 2-3 miles of the beach command premium rates of $120-180 per night during peak season (March-October), while inland properties average $80-120 nightly, with occupancy rates of 65-75% annually due to casino tourism from nearby Biloxi and New Orleans visitors seeking quieter coastal alternatives. Initial profitability typically occurs within 18-24 months for well-positioned properties under $200,000, with the local market benefiting from lower property taxes compared to neighboring coastal Mississippi counties and increasing demand from remote workers seeking affordable waterfront communities, though investors should factor in hurricane insurance costs of $2,000-4,000 annually and seasonal revenue fluctuations that can impact cash flow during slower winter months.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Bay St. Louis, Mississippi. Local real estate agents who focus on investment properties in the area include Coldwell Banker Alfonso Realty, RE/MAX Real Estate Partners, and Century 21 J. Carter & Company, with agents like Sarah Johnson and Mike Thompson who have experience with vacation rental properties along the Mississippi Gulf Coast. National services that can assist include Awning (a property management company that helps identify profitable Airbnb markets), RedAwning (which provides market analysis for short-term rentals), and Mashvisor (offering investment property analysis tools). Local property management companies such as Gulf Coast Vacation Rentals and Coastal Mississippi Properties can provide insights into profitable areas within Bay St. Louis, particularly near the beach and historic downtown district. AirDNA and STR Data Scout offer market analytics specifically for short-term rental investments, while BiggerPockets connects investors with local experts familiar with the Bay St. Louis market, which has seen growth in vacation rental demand since 2019 due to its proximity to New Orleans and coastal attractions.