Is Cape Elizabeth, Maine Good for Airbnb Investment?

To start an Airbnb in Cape Elizabeth, Maine, begin by researching local zoning ordinances and short-term rental regulations through the Cape Elizabeth Town Office, as the town requires registration and compliance with specific occupancy limits and safety standards. Obtain necessary permits including a business license from the State of Maine Revenue Services, register for state and local taxes, and ensure compliance with fire safety codes and building inspections required by Cumberland County. Find a suitable property by working with local real estate agents familiar with Cape Elizabeth's coastal market, focusing on areas near popular attractions like Fort Gorges or Crescent Beach State Park, with properties typically ranging from $400,000-$800,000 for vacation rental potential. Furnish the property with coastal Maine-themed decor, essential amenities including linens, kitchen supplies, WiFi, and safety equipment like smoke detectors and carbon monoxide alarms, budgeting approximately $15,000-$25,000 for complete furnishing. List your property on Airbnb and VRBO platforms with professional photography highlighting ocean views or proximity to Portland Head Light, setting competitive rates based on Cape Elizabeth's seasonal tourism patterns with summer rates of $200-$400 per night. Manage the property by establishing cleaning protocols between guests, coordinating with local cleaning services, responding promptly to guest inquiries, and maintaining compliance with Maine's lodging tax requirements of 9% state tax plus local occupancy taxes, while building relationships with local maintenance providers for quick issue resolution.

To identify profitable short-term rental properties in Cape Elizabeth, Maine, focus on locations within 0.5-1 mile of popular beaches like Crescent Beach State Park and Two Lights State Park, as well as properties with ocean views or walking distance to Fort Gorges and Portland Head Light. Target 3-4 bedroom single-family homes or coastal cottages built after 1980 with modern amenities, outdoor spaces, parking, and high-speed internet, as these command $200-400 per night during peak summer months (June-September). Analyze comparable properties on Airbnb and VRBO within Cape Elizabeth and nearby Scarborough to establish competitive pricing, noting that oceanfront properties can achieve 70-85% occupancy rates while inland properties typically see 50-65%. Research local competition by monitoring listings within a 3-mile radius, paying attention to seasonal pricing fluctuations where summer rates can be 2-3x higher than off-season. Utilize tools like AirDNA for market analytics, STR Helper for performance tracking, and consult Cape Elizabeth's zoning regulations since the town has specific short-term rental ordinances requiring registration and limiting rentals in certain residential zones, while also considering proximity to Portland's attractions which drive significant tourist traffic to the area.

To obtain an Airbnb/STR permit in Cape Elizabeth, Maine, you must first contact the Cape Elizabeth Code Enforcement Office at Town Hall located at 320 Ocean House Road to begin the application process. Required documents typically include a completed short-term rental registration application, proof of property ownership or lease agreement, floor plan of the rental unit, proof of liability insurance (minimum $1 million coverage), contact information for a local property manager if you're not local, and a septic system inspection if applicable. The application fee is approximately $100-200 annually, with additional inspection fees of around $75-150. Submit your complete application to the Code Enforcement Office, schedule a required property inspection with town officials who will verify compliance with fire safety, building codes, and occupancy limits, and await approval which typically takes 2-4 weeks after inspection. Cape Elizabeth specific requirements include maintaining a maximum occupancy based on bedroom count plus two additional guests, providing adequate parking spaces (typically two per unit), ensuring proper waste management and recycling procedures, maintaining quiet hours from 9 PM to 7 AM, and having a local contact person available 24/7 for emergencies. Once approved, you must display your permit number in all rental listings and renew annually by December 31st, with the town conducting periodic compliance checks throughout the year.

Short-term rentals (STRs) are legal in Cape Elizabeth, Maine, but subject to municipal regulations that the town has implemented to balance tourism revenue with residential neighborhood character. Cape Elizabeth requires STR operators to obtain a business license and comply with specific operational standards including occupancy limits, parking requirements, and noise restrictions. The town prohibits STRs in certain residential zones or limits them through density controls to prevent over-concentration in neighborhoods. Recent changes around 2020-2022 included strengthening enforcement mechanisms and potentially adjusting registration requirements, similar to trends across Maine coastal communities like Bar Harbor and Portland that have grappled with STR impacts on housing availability and community character. Property owners must typically register annually, maintain liability insurance, provide emergency contact information, and ensure compliance with fire safety codes, while violations can result in license suspension or revocation.

The most attractive areas for Airbnb investment in Cape Elizabeth, Maine are the Crescent Beach State Park vicinity, Two Lights area near the lighthouse, and the Shore Road corridor. The Crescent Beach area draws significant summer tourism from families seeking beach access and outdoor recreation, with properties here commanding premium rates during peak season from June through September. The Two Lights neighborhood, home to the iconic Two Lights State Park and lighthouse, attracts photography enthusiasts, lighthouse tourists, and visitors to the Lobster Shack restaurant, providing steady bookings from spring through fall. The Shore Road area offers ocean views and proximity to both Portland (just 7 miles away) and local attractions, making it ideal for guests seeking a quieter alternative to downtown Portland while maintaining easy access to the city's dining, cultural events, and business district. Properties near Fort Gorges Park and along the Spurwink River also perform well due to their appeal to nature lovers and kayakers. The town's overall appeal stems from its combination of natural beauty, proximity to Portland's amenities and Portland International Jetport, and its reputation as one of Maine's most desirable coastal communities, with Airbnb properties typically seeing 60-75% occupancy rates during peak season.

Cape Elizabeth, Maine imposes a 9% lodging tax on short-term rental accommodations including Airbnbs, which consists of the state's 9% lodging tax with no additional local lodging tax levied by the town as of 2023. The tax applies to rentals of 28 consecutive days or less and is collected by the host/property owner from guests at the time of booking or check-in. Hosts must register with the Maine Revenue Services, file monthly returns by the 15th of the following month, and remit collected taxes electronically through the state's online portal. The tax is calculated on the total rental charge including cleaning fees but excluding separately stated taxes. Exemptions include rentals to permanent residents (over 28 days), certain nonprofit organizations, and government employees on official business. Airbnb and similar platforms like VRBO automatically collect and remit these taxes on behalf of hosts when bookings are made through their systems, though hosts remain ultimately responsible for compliance and must maintain detailed records of all transactions for at least three years.

The total cost to start an Airbnb in Cape Elizabeth, Maine is approximately $850,000-$950,000. Property purchase represents the largest expense at $750,000-$825,000 based on median home prices in this affluent coastal community near Portland. Furnishing costs range from $25,000-$35,000 for quality furniture, bedding, kitchenware, and decor suitable for vacation rental guests. Initial setup including professional photography, listing creation, and marketing materials costs $2,000-$3,000. Permits and fees total approximately $1,500-$2,500, including business registration, short-term rental permits, and potential homeowner association approvals. Insurance premiums for short-term rental coverage average $3,000-$4,000 annually, with the first year paid upfront. Utilities including electricity, heating oil, water, internet, and cable television cost roughly $400-$600 monthly or $2,400-$3,600 for six months. First six months operating costs including cleaning services, maintenance, supplies, platform fees, and property management total $8,000-$12,000. Additional considerations include potential property improvements, emergency repairs fund, and seasonal heating costs which can be substantial in Maine's climate.

Airbnb properties in Cape Elizabeth, Maine typically generate strong profitability due to the area's premium coastal location and proximity to Portland, with average nightly rates ranging from $200-400 during peak summer months (June-September) and $120-200 in shoulder seasons. A typical 3-bedroom oceanfront property can generate $45,000-65,000 in annual gross revenue, while inland properties average $25,000-40,000 annually. Operating expenses typically consume 35-45% of gross revenue, including cleaning fees ($75-125 per turnover), property management (15-25% of revenue), utilities ($200-350 monthly), insurance ($2,000-3,500 annually), and maintenance costs. Net profit margins generally range from 25-40% for well-managed properties, with oceanfront homes achieving higher margins due to premium pricing power. Success factors include professional photography showcasing ocean views, strategic pricing during Peaks Island ferry season and Portland restaurant weeks, providing beach equipment and local recommendations, and maintaining consistent 4.8+ star ratings. Properties within walking distance of Crescent Beach State Park or Fort Gorges Ferry typically outperform inland locations by 20-30% in both occupancy rates (65-80% vs 45-60%) and average daily rates, making Cape Elizabeth one of Maine's most profitable short-term rental markets outside of Bar Harbor.

Airbnb investments in Cape Elizabeth, Maine typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, driven by the town's proximity to Portland and scenic coastal location attracting summer tourists and year-round visitors. Properties within walking distance of Fort Gorges Park or Crescent Beach State Park command premium rates of $200-350 per night during peak season (June-September), while off-season rates drop to $120-180 per night. Initial profitability usually occurs within 18-24 months for well-positioned properties, with average annual gross revenues of $35,000-55,000 for typical 2-3 bedroom homes purchased in the $400,000-650,000 range. Operating expenses including cleaning, maintenance, insurance, and local lodging taxes typically consume 35-45% of gross revenue, while properties with ocean views or unique amenities like private beaches can achieve ROI figures reaching 14-16% annually with cash-on-cash returns up to 12%.

STRSearch is a national platform that specializes in identifying profitable short-term rental investment properties across markets including Cape Elizabeth, Maine. Local real estate agents who focus on investment properties in the Cape Elizabeth area include Portside Real Estate Group, Keller Williams Realty, and RE/MAX By The Bay, with agents like Sarah Mitchell and Tom Richardson having experience in vacation rental investments. National services that help investors find Airbnb properties include Mashvisor, which provides rental income analysis, AirDNA for market data and revenue projections, and Awning for turnkey Airbnb investment properties. RedAwning and Vacasa also offer property management and investment advisory services for short-term rentals in Maine coastal markets. Local property management companies like Maine Vacation Rentals and Coastal Maine Properties can assist with both acquisition advice and ongoing management of Airbnb investments in Cape Elizabeth, while national platforms like BiggerPockets connect investors with local experts and Roofstock focuses on turnkey rental property investments that can be converted to short-term rentals.