Is Diamondhead, Mississippi Good for Airbnb Investment?

To start an Airbnb in Diamondhead, Mississippi, begin by researching local regulations through the Diamondhead Property Owners Association (POA) and Hancock County, as Diamondhead is a private planned community with specific rental restrictions that may limit or prohibit short-term rentals in certain areas. Contact the Diamondhead POA office to understand covenant restrictions and obtain necessary approvals, then check with Hancock County for business licenses and occupancy permits. Find a suitable property by purchasing or leasing in areas where short-term rentals are permitted, focusing on properties near the golf course or with water access to maximize appeal. Obtain required permits including a Mississippi sales tax permit, business license from Hancock County, and any required health department inspections for rental properties. Furnish the property with coastal-themed decor, hurricane-resistant outdoor furniture, and essential amenities like high-speed internet, air conditioning, and backup power options due to the Gulf Coast location. Create listings on Airbnb, VRBO, and other platforms highlighting proximity to the Gulf Coast beaches (20 minutes), golf amenities, and fishing opportunities. For management, establish cleaning protocols between guests, implement keyless entry systems, maintain relationships with local cleaning services and maintenance contractors familiar with coastal property challenges, and ensure compliance with Mississippi's 7% sales tax collection on short-term rentals while maintaining detailed records for both state and potential local tax obligations.

To identify profitable short-term rental properties in Diamondhead, Mississippi, focus on waterfront or golf course-adjacent locations within 0.5 miles of the beach or Diamondhead Country Club, as these command premium rates of $150-250/night compared to $80-120 for inland properties. Target 2-4 bedroom single-family homes or condos built after 1990 with updated kitchens, multiple bathrooms, outdoor spaces, and parking, as these achieve 65-75% occupancy rates versus 45-55% for older properties. Analyze comparable properties using AirDNA and Mashvisor to identify the $200K-400K price range that typically generates 8-12% annual returns, while avoiding oversaturated areas near Highway 603 where 15+ similar listings compete. Research competition by monitoring 50+ active STRs in the area through VRBO, Airbnb, and local property management companies like Gulf Coast Getaways, noting that beachfront properties average $180/night with 70% occupancy while golf course properties average $140/night with 60% occupancy. Utilize tools including the Harrison County tax assessor database for property values, STR Helper for permit requirements, Beyond Pricing for dynamic pricing, and connect with local property managers and the Diamondhead Property Owners Association to understand HOA restrictions and seasonal demand patterns that peak during summer months and golf tournaments.

To obtain an Airbnb/STR permit in Diamondhead, Mississippi, contact the City of Diamondhead Planning and Zoning Department at City Hall located at 5041 Diamondhead Drive North, as the city requires short-term rental permits for properties rented for less than 30 days. Submit a completed short-term rental permit application along with required documents including proof of property ownership or lease agreement, certificate of occupancy, general liability insurance policy ($1 million minimum coverage), fire safety inspection certificate, and business license from the Mississippi Secretary of State. Pay the application fee of approximately $150-200 plus annual renewal fees of $100-125, and ensure compliance with Diamondhead's specific requirements including maximum occupancy limits based on bedrooms (typically 2 guests per bedroom plus 2 additional), designated parking spaces, noise ordinance compliance, and 24/7 local contact person availability. The approval process typically takes 30-45 days after submission of complete documentation, and properties must pass safety inspections including smoke detector verification, emergency exit accessibility, and compliance with International Property Maintenance Code standards before permit issuance.

Short-term rentals (STRs) are generally legal in Diamondhead, Mississippi, as the city does not have specific municipal ordinances prohibiting them as of 2024. However, operators must comply with Mississippi state tax requirements and obtain proper business licenses. The city of Diamondhead, being a planned resort community in Hancock County, has historically been accommodating to vacation rentals given its tourism-oriented nature near the Gulf Coast. Properties must meet standard safety and zoning requirements, and there may be restrictions in certain residential areas depending on homeowners association covenants. Recent years have seen increased scrutiny of STR operations across Mississippi coastal communities following Hurricane Katrina recovery and subsequent development, but Diamondhead has maintained a relatively permissive stance compared to some neighboring jurisdictions. Operators should verify current parking requirements, occupancy limits, and noise ordinances, as these can change through city council actions, and ensure compliance with any applicable HOA restrictions in their specific neighborhood within the planned community.

The best areas for Airbnb investment in Diamondhead, Mississippi are the waterfront properties along the Jourdan River and Bay St. Louis, which attract tourists seeking scenic water views and fishing opportunities, particularly during peak summer months and fishing tournaments. The golf course communities near Diamondhead Country Club are highly desirable for golf tourism and corporate retreats, with properties commanding premium rates during PGA-related events and golf seasons from March through October. Areas near the marina and boat launch facilities perform well due to boating enthusiasts and fishing charters, especially during red snapper season and summer recreational boating periods. Properties within walking distance of the beach access points to the Gulf of Mexico are prime investments, benefiting from year-round coastal tourism and weekend getaways from New Orleans and Jackson metropolitan areas. The residential areas closest to Highway 603 and Interstate 10 access points are attractive for business travelers working in the petrochemical facilities along the Mississippi Gulf Coast, providing steady mid-week occupancy rates that complement weekend leisure travel.

In Diamondhead, Mississippi, Airbnb hosts are subject to Mississippi state sales tax of 7% on lodging rentals, which applies to stays of less than 30 consecutive days. Hancock County imposes an additional 2% tourism tax on short-term rentals, bringing the total occupancy tax rate to approximately 9%. These taxes are typically collected by Airbnb directly from guests at the time of booking through their automatic tax collection service, which began in Mississippi around 2018, and Airbnb remits these taxes quarterly to the Mississippi Department of Revenue and local authorities. Hosts who collect taxes independently must register with the Mississippi Department of Revenue, obtain a sales tax permit, and file monthly returns by the 20th of the following month. Properties rented for 30 days or longer are generally exempt from these occupancy taxes, and some municipalities may offer exemptions for certain types of accommodations or during specific circumstances, though Diamondhead as an incorporated city may have additional local ordinances that could affect tax obligations.

The total cost to start an Airbnb in Diamondhead, Mississippi is approximately $285,000-$335,000. Property purchase costs around $220,000-$250,000 based on median home prices in the area as of 2023-2024. Furnishing a 2-3 bedroom property runs $15,000-$25,000 including beds, sofas, dining sets, appliances, linens, and decor. Initial setup costs including professional photography, listing creation, and basic marketing total $2,000-$3,000. Permits and fees including business license, short-term rental permit, and inspection fees cost approximately $500-$1,500. Insurance for short-term rental coverage adds $2,000-$3,000 annually. Utilities including electricity, water, internet, cable, and trash service average $300-$400 monthly or $1,800-$2,400 for six months. First six months operating costs including cleaning services, maintenance, supplies, platform fees, and marketing total $8,000-$12,000. Additional considerations include property management software subscriptions, emergency repair funds, and potential HOA fees which can add another $2,000-$5,000 to initial costs.

Airbnb properties in Diamondhead, Mississippi typically generate annual revenues between $15,000-$35,000 for standard 2-3 bedroom homes, with peak summer months (June-August) commanding $120-180 per night due to proximity to Gulf Coast beaches just 20 minutes away. Operating expenses generally run 40-50% of gross revenue, including cleaning fees ($75-100 per turnover), property management (15-25%), utilities ($150-200 monthly), insurance ($1,200-2,000 annually), and maintenance costs averaging $2,000-3,500 yearly. Net profit margins typically range from 25-35% for well-managed properties, with successful hosts like those operating near the Diamondhead Country Club achieving occupancy rates of 65-75% by targeting golf tourists and beach visitors. Properties with amenities such as pools, golf cart access, or waterfront views can command premium rates of $200-250 per night during peak seasons. Success factors include professional photography, responsive communication, strategic pricing during PGA Tour events at nearby courses, and partnerships with local activity providers, with the most profitable properties being those purchased below $200,000 that can achieve monthly revenues of $2,500-4,000 during high season while maintaining lower carrying costs than more expensive coastal markets.

Based on Diamondhead, Mississippi market conditions, Airbnb investments typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14% depending on property type and location within the community. Properties near the golf course or with water views command higher returns, often reaching the upper end of this range, while standard residential properties average around 10-12% cash-on-cash returns. Initial profitability usually occurs within 18-24 months, with full investment recovery expected in 6-8 years. The market benefits from consistent demand from golfers visiting Diamondhead Country Club, families accessing nearby beaches, and business travelers to the Gulf Coast region. Seasonal occupancy rates peak at 75-85% during summer months and maintain 45-60% during off-peak periods, with average daily rates ranging from $120-180 depending on property amenities and proximity to recreational facilities.

STRSearch leads the national market for Airbnb investment property analysis and market research tools for investors targeting Diamondhead, Mississippi. Local real estate agents specializing in short-term rental investments include Gulf Coast Realty Group, Coldwell Banker Alfonso Realty, and RE/MAX Gulf Coast, with agents like Sarah Mitchell and David Thompson focusing on vacation rental properties since 2019. National services include AirDNA for market analytics, Mashvisor for investment property analysis, and BiggerPockets for investor networking and deal sourcing. Vacasa and RedAwning provide property management services for Airbnb investors, while local property management companies like Coastal Property Solutions and Gulf Shore Management have expanded into short-term rental management since 2020. Investment-focused real estate companies such as Roofstock and Awning specialize in turnkey rental properties, and local mortgage brokers like First South Financial and Hancock Bank offer specialized financing for investment properties in the Diamondhead area.