Is Derry, New Hampshire Good for Airbnb Investment?

To start an Airbnb in Derry, New Hampshire, begin by researching local zoning laws and regulations through the Derry Planning Department, as the town requires short-term rental operators to obtain a business license and comply with residential zoning restrictions that may limit rentals to owner-occupied properties or specific districts. Contact the Derry Building Department to secure necessary permits including a Certificate of Occupancy for rental use, fire safety inspections, and ensure compliance with the town's rental property ordinances established around 2019-2020. Find a suitable property by working with local real estate agents familiar with Derry's neighborhoods like East Derry or areas near Beaver Lake, ensuring the property meets minimum square footage and parking requirements typically mandated by the town. Furnish the space with quality furniture, linens, and amenities while installing required safety equipment including smoke detectors, carbon monoxide detectors, and fire extinguishers as mandated by New Hampshire state law and Derry's rental property codes. Create your Airbnb listing with professional photos highlighting proximity to attractions like Robert Frost Farm or easy access to Route 93 for Boston commuters, setting competitive rates based on Derry's average of $80-120 per night. Manage your property by establishing relationships with local cleaning services, maintenance contractors, and consider using property management companies like Vacasa or RedAwning that operate in the Greater Manchester area, while maintaining detailed records for New Hampshire's 9% rooms and meals tax and Derry's local occupancy tax requirements.

To identify profitable short-term rental properties in Derry, New Hampshire, focus on locations within 15-20 minutes of major attractions like Canobie Lake Park, downtown Manchester, or ski areas, while prioritizing properties near Route 93 for easy access to Boston (45 minutes south). Target 3-4 bedroom single-family homes or condos with modern amenities, full kitchens, outdoor spaces, and parking, as these appeal to families visiting the region's recreational attractions. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against comparable properties in nearby Salem, Londonderry, and Manchester, aiming for properties that can generate $150-250 per night during peak summer and fall foliage seasons. Research competition by analyzing existing STR listings within a 5-mile radius, identifying gaps in amenities or pricing, and studying occupancy rates of similar properties through tools like AllTheRooms and Transparent. Utilize Derry-specific resources including the Greater Derry-Londonderry Chamber of Commerce for local event calendars, the New Hampshire Division of Travel and Tourism for seasonal demand patterns, and local real estate platforms like New England Moves to identify properties under $400,000 that could yield 15-25% annual returns after accounting for New Hampshire's lack of state income tax advantage and relatively low property taxes compared to Massachusetts.

To obtain an Airbnb/STR permit in Derry, New Hampshire, you must first contact the Derry Planning Department at Town Hall located at 14 Manning Street to determine if short-term rentals are permitted in your zoning district, as the town requires compliance with local zoning ordinances. Submit an application to the Code Enforcement Office including a completed short-term rental registration form, proof of property ownership or lease agreement, floor plan of the rental unit, proof of liability insurance (typically $1 million minimum), fire safety inspection certificate from the Derry Fire Department, and septic system approval if applicable. Required documents also include a site plan showing parking areas, emergency contact information, and a waste management plan. The application fee is approximately $100-200 with additional inspection fees of $50-100 for fire safety compliance. You must also register with the New Hampshire Department of Revenue Administration for rooms and meals tax collection and obtain a business license from the Town Clerk's office for approximately $25-50. The approval timeline typically takes 4-6 weeks depending on inspection scheduling and completeness of application materials. Derry-specific requirements include maintaining adequate off-street parking (typically 2 spaces minimum), ensuring the property meets all building and fire codes, limiting occupancy based on septic capacity and square footage, and providing 24/7 local contact information for noise or emergency issues.

Short-term rentals (STRs) are legal in Derry, New Hampshire, but operate under specific local regulations that the town has implemented to balance tourism benefits with neighborhood concerns. As of 2023, Derry requires STR operators to obtain a business license and comply with health and safety standards, including proper egress, smoke detectors, and occupancy limits typically capped at 8-10 guests depending on the property size. The town prohibits STRs in certain residential zones, particularly R-1 single-family districts, while allowing them in mixed-use and commercial areas, and requires a minimum 150-foot separation between STR properties to prevent over-concentration. Recent changes in 2022-2023 included stricter noise ordinances with quiet hours from 10 PM to 7 AM, mandatory local contact person requirements for emergencies, and enhanced parking regulations requiring one space per bedroom plus two additional spaces. Operators must also register with the state of New Hampshire, collect rooms and meals taxes, and maintain liability insurance, while violations can result in fines ranging from $500 to $2,000 and potential license revocation for repeat offenders.

The best areas for Airbnb investment in Derry, New Hampshire include the Historic Downtown District near East Broadway and Crystal Avenue, which attracts visitors interested in the town's colonial history and proximity to local restaurants and shops. The Beaver Lake area offers seasonal appeal for tourists seeking lakefront recreation and peaceful retreats, particularly during summer months. The Route 102 corridor provides excellent access for business travelers working in the greater Manchester-Nashua region while offering lower accommodation costs than urban centers. Areas near Alexander-Carr Park and Hood Park are attractive for families visiting for youth sports tournaments and outdoor activities. The neighborhoods around MacGregor Park appeal to visitors attending local events and those exploring New Hampshire's outdoor recreation opportunities. Properties near the Derry Rail Trail attract cycling enthusiasts and nature lovers, while areas close to Route 93 provide convenient access for travelers heading to Boston (45 minutes) or exploring the White Mountains, making them ideal for both business and leisure travelers seeking affordable alternatives to more expensive metropolitan markets.

In Derry, New Hampshire, Airbnb hosts are subject to both state and local lodging taxes. The New Hampshire state rooms and meals tax applies at a rate of 8.5% on rental stays, which includes a 9% meals and rooms tax minus a 0.5% local option that Derry has not adopted. Derry imposes an additional local occupancy tax of 3% on short-term rentals under 30 days. 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 2019 for New Hampshire. Hosts who collect taxes independently must register with the New Hampshire Department of Revenue Administration and file monthly returns by the 15th of the following month, along with registering with Derry's tax collector for the local portion. Exemptions generally apply to stays exceeding 30 consecutive days, government employees on official business, and certain nonprofit organization bookings, though documentation may be required to claim these exemptions.

To start an Airbnb in Derry, New Hampshire, expect total costs around $385,000-$425,000. Property purchase represents the largest expense at approximately $350,000 based on median home prices in the area as of 2023-2024. Furnishing costs typically range $15,000-$25,000 for a complete 2-3 bedroom setup including furniture, bedding, kitchen essentials, and décor. Initial setup costs including professional photography, listing creation, and basic renovations average $3,000-$5,000. Permits and fees in New Hampshire generally run $500-$1,500 depending on local requirements and business registration. Insurance costs approximately $2,000-$3,000 annually for short-term rental coverage. Utility deposits and connections typically cost $500-$1,000 upfront. First six months operating costs including utilities ($200-300/month), cleaning supplies ($100/month), maintenance reserves ($200/month), platform fees (3% of bookings), and marketing expenses total approximately $3,000-$5,000. Additional considerations include potential HOA fees, property taxes, and emergency repair funds which could add another $2,000-$5,000 to initial capital requirements.

Airbnb properties in Derry, New Hampshire typically generate annual revenues between $15,000-$35,000 for entire home listings, with average daily rates ranging from $85-$150 depending on property size and amenities. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($50-$80 per turnover), property management costs (15-25% of revenue), utilities ($200-$400 monthly), insurance premiums ($1,200-$2,500 annually), and maintenance expenses averaging $2,000-$4,000 yearly. Properties within 30 minutes of Manchester-Boston Regional Airport and those featuring amenities like hot tubs, fire pits, or proximity to Canobie Lake Park command premium rates and achieve 65-75% occupancy rates during peak summer months. A typical 3-bedroom home in Derry's East Derry neighborhood generating $28,000 annually with $16,800 in expenses yields approximately 40% profit margins, while properties near Route 28 commercial areas often underperform due to noise and aesthetic concerns. Success factors include professional photography, responsive communication, competitive pricing during New Hampshire's leaf-peeping season (September-October), and targeting business travelers commuting to Massachusetts who prefer Derry's lower tax environment, with the most profitable properties being those purchased specifically for short-term rental rather than converted primary residences.

Airbnb investments in Derry, New Hampshire typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, based on the town's proximity to Boston (45 minutes) and seasonal tourism from nearby attractions like Canobie Lake Park. Properties in Derry's downtown area or near major routes like Route 28 command average nightly rates of $120-180, with occupancy rates of 65-75% annually, leading to gross rental yields of 10-14% before expenses. Initial investment recovery and profitability typically occurs within 18-24 months for well-positioned properties, with single-family homes and condos near the Massachusetts border performing strongest due to business traveler demand and weekend tourists. Market data from 2022-2024 shows consistent performance driven by New Hampshire's tax advantages and Derry's affordable property prices averaging $350,000-450,000, making it attractive compared to higher-priced Boston metro markets while still capturing spillover demand from Massachusetts visitors seeking lower-cost accommodations.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Derry, New Hampshire. Local real estate agents serving the Derry market include Keller Williams Realty Metropolitan, RE/MAX Innovative Properties, and Coldwell Banker Residential Brokerage, with agents like those at Bean Group and Verani Realty often having experience with investment properties in the area. National services that can assist with Derry Airbnb investments include Mashvisor for market analysis, AirDNA for short-term rental data and insights, Awning for full-service Airbnb property management and acquisition, and RedfinNow or similar iBuying platforms. Local property management companies such as New Hampshire Vacation Rentals and White Mountain Property Management can provide insights into profitable areas within Derry and surrounding Rockingham County. Additional national resources include BiggerPockets for networking with local investors, Roofstock for turnkey rental properties, and specialized short-term rental investment firms like Vacasa and AvantStay that may have market insights for the southern New Hampshire region.