Is Cambridge, Maryland Good for Airbnb Investment?

To start an Airbnb in Cambridge, Maryland, begin by researching local zoning laws and regulations through the Dorchester County Planning and Zoning Department, as Cambridge typically requires short-term rentals to comply with residential zoning restrictions and may require a business license from the city clerk's office. Obtain necessary permits including a rental license from Dorchester County (approximately $50-100 annually), ensure compliance with Maryland state tax requirements by registering for sales tax collection, and verify your property meets fire safety codes which may require smoke detectors, carbon monoxide detectors, and emergency exit plans. Find a suitable property by purchasing or leasing a home in residential zones that allow short-term rentals, focusing on areas near downtown Cambridge or waterfront locations that attract tourists visiting the Chesapeake Bay region. Furnish the property with quality furniture, linens, kitchen essentials, and amenities like WiFi, cable TV, and air conditioning, ensuring it meets Airbnb's standards for cleanliness and comfort while incorporating local charm that reflects Cambridge's maritime heritage. List your property on Airbnb by creating a detailed profile with professional photos, competitive pricing (typically $80-200 per night depending on size and location), and highlighting nearby attractions like the Harriet Tubman Underground Railroad Visitor Center and Blackwater National Wildlife Refuge. Manage your Airbnb by responding promptly to inquiries, maintaining a cleaning schedule between guests, coordinating check-ins and check-outs, collecting and remitting the required 6% Maryland sales tax plus any local hotel taxes, and ensuring ongoing compliance with Cambridge's noise ordinances and parking regulations while building positive guest reviews to increase bookings.

To identify profitable short-term rental properties in Cambridge, Maryland, focus on waterfront locations near the Choptank River and historic downtown areas within walking distance of restaurants, marinas, and attractions like the Harriet Tubman Museum, as these command premium rates of $150-250 per night compared to $80-120 for inland properties. Target 2-4 bedroom homes built after 1980 with modern amenities, parking, outdoor spaces, and water views, while avoiding properties requiring major renovations or in flood-prone zones. Analyze comparable STR rates using AirDNA and Mashvisor, which show Cambridge averaging 65-75% occupancy rates with seasonal peaks during summer months and crab season (April-November), and calculate potential gross yields of 8-12% annually. Research competition by monitoring active Airbnb and VRBO listings within 3-mile radius, noting that Cambridge has approximately 45-60 active STRs with highest performers being waterfront properties and those near Sailwinds Park. Utilize tools like Rabbu and STRData for market analysis, partner with local property managers like Chesapeake Bay Vacation Rentals, and leverage Cambridge's tourism board data showing 180,000+ annual visitors, while ensuring compliance with Dorchester County's STR regulations requiring business licenses and adhering to the 10% hotel tax requirement.

To obtain an Airbnb/STR permit in Cambridge, Maryland, you must first contact the Cambridge Planning and Zoning Department at City Hall located at 410 Academy Street to determine if short-term rentals are permitted in your specific zoning district, as regulations vary by zone. Submit a completed short-term rental application along with required documents including property deed or lease agreement, floor plan showing maximum occupancy, proof of liability insurance (minimum $1 million coverage), fire safety inspection certificate from the Cambridge Fire Department, and a site plan showing parking availability. Pay the application fee of approximately $150-250 plus annual renewal fees of around $100-150. The city requires properties to maintain adequate off-street parking (typically 1 space per bedroom), comply with maximum occupancy limits based on square footage, install smoke and carbon monoxide detectors in all sleeping areas, provide emergency contact information to neighbors, and maintain the property in accordance with city housing codes. Schedule inspections with both the fire department and building inspector, which typically costs $75-100 per inspection. The approval process generally takes 30-45 days from submission of complete application materials, and permits must be renewed annually. Contact the Cambridge Planning Department at (410) 228-1000 for current application forms and to verify specific requirements, as regulations may have been updated since 2023.

Short-term rentals (STRs) in Cambridge, Maryland are generally legal but operate under Dorchester County's zoning regulations and state oversight. The city allows STRs in most residential areas but requires compliance with local zoning ordinances, health department regulations, and state tax requirements including the 9% state sales tax and local hotel tax. Properties must meet safety standards including smoke detectors, carbon monoxide detectors, and proper egress requirements. STRs are typically prohibited in areas zoned exclusively for single-family residential use without special permits, and the city has implemented noise ordinances and parking requirements that affect STR operations. Recent changes around 2022-2023 have included stricter enforcement of existing regulations and enhanced registration requirements, with the city working to balance tourism revenue with neighborhood preservation concerns, particularly in historic districts near the Choptank River waterfront area.

The most promising Airbnb investment areas in Cambridge, Maryland include the historic downtown waterfront district near High Street and Race Street, which attracts tourists visiting the Choptank River waterfront, antique shops, and the Richardson Maritime Museum. The area around Dorchester County Visitor Center and Long Wharf Park offers strong potential due to proximity to boating activities, fishing charters, and scenic river views that draw weekend visitors from Baltimore and Washington DC metro areas. The neighborhoods near Sailwinds Park and the Cambridge Municipal Airport cater to business travelers and recreational boaters, while properties within walking distance of the Hyatt Regency Chesapeake Bay Golf Resort benefit from golf tourism and corporate retreats. The residential areas along Maryland Avenue and near the Cambridge-South Dorchester High School provide good value investments with lower acquisition costs while still offering easy access to downtown attractions, making them ideal for budget-conscious travelers exploring the Chesapeake Bay region's maritime heritage, crabbing industry tours, and annual events like the Cambridge Classic Powerboat Regatta.

In Cambridge, Maryland, Airbnb properties are subject to both state and local lodging taxes. The Maryland state sales tax of 6% applies to short-term rental accommodations, along with the state's 3.5% hotel tax, for a combined state rate of 9.5%. Dorchester County, where Cambridge is located, imposes an additional 3% local accommodancy tax on lodging establishments, bringing the total tax rate to approximately 12.5%. These taxes are typically collected by Airbnb directly from guests at the time of booking and remitted to the appropriate tax authorities on behalf of hosts through Airbnb's automated tax collection service, which began around 2017-2018 for Maryland. Hosts may still need to register with the Maryland Comptroller's office and obtain a trader's license, and should verify their tax obligations with local authorities. Properties rented for 30 days or longer are generally exempt from these occupancy taxes, and certain exemptions may apply for government employees or other qualifying guests, though standard vacation rentals typically do not qualify for exemptions.

To start an Airbnb in Cambridge, Maryland, expect total costs around $285,000-$320,000. Property purchase represents the largest expense at $250,000-$280,000 based on median home prices in the Dorchester County area. Furnishing costs typically range $15,000-$25,000 for a complete 2-3 bedroom property including beds, linens, kitchen essentials, living room furniture, and décor. Initial setup costs including professional photography, listing creation, and basic renovations average $3,000-$5,000. Permits and fees in Maryland include business license ($300), short-term rental permit ($200-$500), and potential HOA approvals. Insurance premiums for short-term rental coverage cost approximately $2,000-$3,000 annually. Utility deposits and connections for electricity, water, gas, internet, and cable total around $1,500-$2,500. First six months operating costs encompass utilities ($900-$1,200), cleaning services ($1,800-$2,400), maintenance reserves ($1,000), marketing ($500), and Airbnb platform fees averaging 3% of bookings, totaling approximately $8,000-$12,000 depending on occupancy rates and seasonal demand in the Chesapeake Bay region.

Airbnb properties in Cambridge, Maryland typically generate annual revenues between $15,000-$35,000 for single-family homes and $8,000-$18,000 for individual rooms, with average daily rates ranging from $85-$150 depending on proximity to the Choptank River and seasonal demand from tourists visiting the Eastern Shore. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($30-$50 per turnover), utilities ($150-$300 monthly), property management (10-20% of revenue), insurance ($800-$1,500 annually), and maintenance costs ($2,000-$4,000 yearly). Net profit margins typically range from 15-35% for well-managed properties, with waterfront homes near the Cambridge Creek achieving higher margins due to premium pricing during summer months and crabbing season. Success factors include professional photography showcasing the area's maritime charm, competitive pricing during peak seasons (May-September), maintaining high cleanliness standards, and leveraging Cambridge's attractions like the Harriet Tubman Underground Railroad Visitor Center and Blackwater National Wildlife Refuge. Properties within walking distance of downtown Cambridge and the waterfront consistently outperform suburban listings, with some hosts reporting occupancy rates of 65-75% and annual profits of $8,000-$15,000 after expenses, though performance varies significantly based on property condition, marketing effectiveness, and host responsiveness.

Airbnb investments in Cambridge, Maryland typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14%, primarily driven by the town's proximity to the Chesapeake Bay and seasonal tourism demand. Properties near the waterfront or historic downtown area command premium nightly rates of $150-250, while standard residential properties average $100-150 per night with occupancy rates of 60-75% during peak season (May-September) and 35-50% off-season. Initial investment costs for suitable properties range from $200,000-400,000, with investors typically reaching profitability within 18-24 months after accounting for renovation costs, furnishing, and operational expenses. The market benefits from Cambridge's growing reputation as a destination for crabbing, fishing, and Blackwater National Wildlife Refuge tourism, though investors should expect seasonal fluctuations with strongest performance during summer months and potential challenges during winter when occupancy drops significantly.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Cambridge, Maryland. Local real estate agents in the area include Chesapeake Bay Realty Group, Dorchester County Real Estate Associates, and Cambridge Waterfront Properties, who have experience with investment properties suitable for Airbnb conversions. National services like Mashvisor, BiggerPockets, and AirDNA provide market analysis and property identification tools for the Cambridge market. RedAwning and Vacasa offer property management services for Airbnb investors, while local property management companies such as Eastern Shore Vacation Rentals and Chesapeake Property Management can handle day-to-day operations. Real estate investment firms like Roofstock and Fundrise have expanded into short-term rental markets and may have opportunities in the Cambridge area. Local mortgage brokers specializing in investment properties include First Shore Federal and Easton Bank & Trust, while national lenders like Lima One Capital and Visio Lending focus specifically on short-term rental financing.