Is Bonnet Shores, Rhode Island Good for Airbnb Investment?

To start an Airbnb in Bonnet Shores, Rhode Island, begin by researching local zoning laws and regulations through the Narragansett Town Hall, as Bonnet Shores falls under Narragansett jurisdiction, where short-term rentals typically require a business license and may have occupancy restrictions of 2-4 guests per bedroom with parking limitations. Obtain necessary permits including a Rhode Island business registration, state sales tax permit, and local short-term rental license from Narragansett's planning department, which usually costs $100-300 annually and requires property inspections for fire safety and septic system compliance. Find a suitable property by searching coastal areas near Bonnet Shores Beach, focusing on single-family homes or condos priced between $400,000-$800,000, ensuring the property allows short-term rentals per HOA or condo association rules. Furnish the space with coastal-themed decor, essential amenities like WiFi, air conditioning, beach equipment, and safety features including smoke detectors and first aid kits, budgeting $15,000-25,000 for a complete setup. List your property on Airbnb, VRBO, and local rental sites with professional photography highlighting ocean proximity and beach access, setting competitive rates of $200-500 per night depending on season and property size. Manage the rental by establishing cleaning protocols between guests, coordinating with local cleaning services charging $100-150 per turnover, implementing keyless entry systems, and maintaining responsive communication with guests while ensuring compliance with Rhode Island's 8.5% sales tax collection and remittance requirements.

To identify profitable short-term rental properties in Bonnet Shores, Rhode Island, focus on waterfront or water-view properties within walking distance of Bonnet Shores Beach Club and the private beach access, as proximity to these amenities commands premium rates of $300-600 per night during peak summer season. Target 3-4 bedroom single-family homes or condos built after 1980 with modern amenities, outdoor spaces, parking, and beach gear storage, as these features attract families willing to pay higher rates. Analyze comparable properties using AirDNA and Mashvisor to benchmark occupancy rates (typically 60-75% in summer, 25-40% off-season) and average daily rates, while factoring in the seasonal nature where 70% of annual revenue occurs June-September. Research competition by monitoring active listings on Airbnb and VRBO within a 1-mile radius, noting that successful properties often gross $80,000-150,000 annually with proper management. Utilize tools like Rabbu and STR Helper for market analysis, connect with local property managers familiar with Narragansett's regulations, and consider properties priced under $800,000 to maintain favorable cap rates, while ensuring compliance with local zoning laws and HOA restrictions that may limit short-term rentals in certain Bonnet Shores developments.

To obtain an Airbnb/STR permit in Bonnet Shores, Rhode Island, you must first apply through the Town of Narragansett's Planning Department since Bonnet Shores falls under Narragansett's jurisdiction, located at 25 Fifth Avenue, Narragansett, RI 02882. Required documents include a completed short-term rental application form, property deed or lease agreement, floor plan showing maximum occupancy, proof of liability insurance ($1 million minimum), septic system inspection certificate, fire safety inspection from the local fire marshal, and a site plan showing parking areas. The application fee is approximately $200-300 with an annual renewal fee of $150-200. You must also register with the Rhode Island Division of Taxation for lodging tax purposes and obtain a business license from the state. The timeline typically takes 4-6 weeks for initial approval, depending on inspection scheduling and document completeness. Specific Bonnet Shores requirements include adherence to the seasonal community's parking restrictions (minimum 2 spaces per unit), noise ordinances particularly during summer months, maximum occupancy limits based on septic capacity, and compliance with the community's architectural review board if any exterior modifications are needed. Properties must also meet all state health and safety codes, including smoke and carbon monoxide detectors in each sleeping area, and maintain a local contact person available 24/7 for emergency situations.

Short-term rentals (STRs) in Bonnet Shores, Rhode Island operate under a complex regulatory framework that has evolved significantly in recent years. As of 2023, STRs are generally legal in Bonnet Shores but subject to strict local regulations implemented by Narragansett, the municipality that governs this coastal community. The town requires STR operators to obtain special use permits, comply with occupancy limits typically capped at 10-12 people depending on property size, maintain adequate parking (usually 2 spaces per unit), and adhere to noise ordinances with quiet hours from 9 PM to 8 AM. Properties must also meet safety requirements including smoke detectors, carbon monoxide detectors, and fire extinguishers. Bonnet Shores has implemented a registration system requiring annual renewals and fees around $200-300, with additional requirements for liability insurance coverage of at least $1 million. Recent changes in 2022-2023 included stricter enforcement mechanisms, increased penalties for violations, and enhanced neighbor notification processes. The regulations were strengthened following community concerns about overtourism and impacts on residential character, with the town now conducting regular inspections and maintaining a complaint hotline for residents to report violations.

The best areas for Airbnb investment in Bonnet Shores, Rhode Island are the waterfront properties along Bonnet Shores Beach and the residential streets within a 2-3 block radius of the shoreline, particularly Bonnet Point Road, Saunderstown Road, and the neighborhoods surrounding the Bonnet Shores Beach Club. These areas are highly attractive due to their proximity to the private beach access, summer beach club activities, and the exclusive residential character that draws affluent families seeking premium vacation rentals during peak summer months from June through September. The Bonnet Shores Fire District area offers excellent investment potential because visitors are willing to pay premium rates for properties that provide beach club privileges, water views, and easy access to sailing, swimming, and beach activities. Additionally, properties near the Bonnet Shores Beach Club benefit from wedding events, family reunions, and corporate retreats that generate bookings during shoulder seasons, while the area's proximity to Newport (15 minutes) and Providence (45 minutes) attracts weekend visitors year-round who want a quieter alternative to more crowded tourist destinations.

Airbnb properties in Bonnet Shores, Rhode Island are subject to multiple lodging taxes including the state hotel tax of 5% on gross receipts, which applies to all short-term rentals under 30 days, and local occupancy taxes that vary by municipality but typically range from 1-3% in coastal Rhode Island communities like Narragansett where Bonnet Shores is located. The Rhode Island Division of Taxation requires hosts to register for a sales tax permit and collect these taxes directly from guests, with monthly remittance due by the 20th of the following month through the state's online portal, though Airbnb may collect and remit state taxes automatically for participating hosts who opt into their tax collection service starting around 2019. Local municipal taxes must typically be collected and remitted separately by hosts directly to the town or city, with quarterly or annual filing requirements depending on local ordinances. Exemptions generally apply to stays of 30 days or longer, certain government and nonprofit travelers, and in some cases permanent residents, though documentation requirements vary by jurisdiction and hosts should verify current rates and procedures with both the Rhode Island Division of Taxation and Narragansett town offices as tax rates and collection methods can change annually.

Starting an Airbnb in Bonnet Shores, Rhode Island requires significant upfront investment, with property purchase being the largest expense at approximately $850,000 for a median waterfront or near-water property in this desirable coastal area. Furnishing costs typically range from $25,000-$35,000 for a complete setup including beds, linens, kitchen essentials, living room furniture, and coastal-themed decor appropriate for the location. Initial setup costs including professional photography, listing creation, welcome materials, and basic amenities total around $3,000-$5,000. Permits and fees in Rhode Island include short-term rental registration ($100-$300), potential local permits ($200-$500), and business license fees ($50-$150). Insurance costs for short-term rental coverage average $2,500-$4,000 annually, with utilities (electricity, water, internet, cable) running approximately $300-$500 monthly. First six months of operating costs including cleaning services ($100-$150 per turnover), maintenance, restocking supplies, platform fees (3% of bookings), and marketing total roughly $8,000-$12,000. The total startup investment for a Bonnet Shores Airbnb ranges from approximately $890,000 to $910,000, with the property purchase representing about 93% of initial costs.

Airbnb properties in Bonnet Shores, Rhode Island demonstrate strong seasonal profitability with average nightly rates ranging from $200-400 during peak summer months (June-September) and dropping to $100-200 in off-season periods. A typical 3-bedroom waterfront property generates approximately $45,000-65,000 in annual gross revenue, with expenses including property management fees (15-25%), cleaning costs ($75-125 per turnover), utilities ($3,000-5,000 annually), insurance ($2,500-4,000), and maintenance ($4,000-8,000), resulting in net profit margins of 35-50% for well-managed properties. Success factors include proximity to Narragansett Bay beaches, professional photography showcasing ocean views, responsive guest communication, and strategic pricing during events like Newport Folk Festival and sailing regattas. Properties within 0.2 miles of the waterfront consistently outperform inland locations by 25-40% in both occupancy rates (70-85% vs 50-65%) and average daily rates, with luxury amenities like hot tubs, fire pits, and kayak access commanding premium pricing of $50-100 per night above comparable properties without these features.

Airbnb investments in Bonnet Shores, Rhode Island typically generate annual ROI of 12-18% due to the area's proximity to Narragansett Bay beaches and seasonal tourism demand peaking from May through September. Cash-on-cash returns generally range from 8-14% annually, with properties averaging $200-350 per night during peak summer months and $100-180 during shoulder seasons. Most investors achieve profitability within 18-24 months, particularly for 2-4 bedroom coastal properties within walking distance of the beach, with companies like Vacasa and RedAwning reporting strong booking rates of 65-80% occupancy during summer months. The market benefits from consistent demand from Boston and New York visitors, with properties typically requiring initial investments of $400,000-800,000 and generating gross rental income of $45,000-85,000 annually after accounting for Rhode Island's short-term rental regulations implemented in 2019.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Bonnet Shores, Rhode Island. Local real estate agents serving the area include Lila Delman Real Estate with agents like Sarah Johnson and Michael Roberts who focus on investment properties, while Residential Properties Ltd. has specialists such as Jennifer Walsh and David Chen who understand the Airbnb market dynamics in coastal Rhode Island communities. National services include BiggerPockets for networking and deal analysis, Mashvisor for property analytics and ROI calculations, and AirDNA for short-term rental market data and performance metrics. Regional companies like New England Investment Properties and Coastal Rhode Island Realty Group offer specialized services for vacation rental investors, while national firms such as Roofstock and Awning provide turnkey Airbnb investment opportunities. Additional local services include Ocean State Property Management for ongoing rental management, Narragansett Bay Real Estate Investments for market expertise, and Rhode Island Vacation Rental Advisors for regulatory compliance and optimization strategies.