Is Jamestown, Rhode Island Good for Airbnb Investment?

To start an Airbnb in Jamestown, Rhode Island, begin by researching local zoning laws and short-term rental regulations through the Jamestown Planning Department, as the town requires short-term rental operators to obtain a business license and comply with specific occupancy limits typically capped at 6-8 guests depending on property size. Contact the Rhode Island Department of Health for lodging establishment permits if renting for less than 30 days, and register for state sales tax collection through the Rhode Island Division of Taxation since short-term rentals are subject to 7% state sales tax plus 1% local tax. Find a suitable property in residential zones that allow short-term rentals, ensuring it meets fire safety codes including smoke detectors, carbon monoxide detectors, and proper egress windows. Furnish the property with quality furniture, linens, kitchen essentials, and amenities like WiFi, focusing on coastal/nautical themes that appeal to visitors seeking Jamestown's waterfront attractions. Create your Airbnb listing with professional photos highlighting proximity to Beavertail State Park, Fort Wetherill, and Newport attractions, setting competitive rates around $150-300 per night depending on season and property size. For ongoing management, establish cleaning protocols between guests, maintain 24/7 communication availability, coordinate key exchanges or install smart locks, and keep detailed records for tax purposes while monitoring guest reviews and local compliance requirements that may change seasonally.

To identify profitable short-term rental properties in Jamestown, Rhode Island, focus on waterfront or water-view locations within walking distance of popular attractions like Beavertail State Park, Fort Wetherill, and downtown Newport (accessible via ferry). Target 2-4 bedroom properties built after 1950 with modern amenities, outdoor spaces, parking, and unique character features that appeal to summer tourists and wedding guests visiting nearby venues. Conduct pricing analysis using AirDNA and Mashvisor to evaluate seasonal rate fluctuations, with peak summer rates typically ranging $200-500+ per night for quality properties, while analyzing occupancy rates that can exceed 70% during June-September. Research competition by monitoring active Airbnb and VRBO listings within 2-mile radius, noting amenities, pricing strategies, and guest reviews to identify market gaps. Utilize tools like Rabbu, STR Helper, and local MLS data through Rhode Island Statewide MLS, while connecting with Jamestown-specific resources including the Jamestown Chamber of Commerce, local property management companies like Island Property Management, and monitoring town regulations through Jamestown's Planning Department since STR regulations can impact profitability significantly in this small island community.

To obtain an Airbnb/STR permit in Jamestown, Rhode Island, you must first contact the Jamestown Building Department at Town Hall located at 93 Narragansett Avenue to apply for a short-term rental license. Required documents typically include a completed application form, proof of property ownership or lease agreement, floor plans of the rental unit, certificate of occupancy, proof of liability insurance (minimum $1 million coverage), fire safety inspection certificate, and septic system inspection if applicable. The application fee is approximately $200-300 with annual renewal fees around $150-250. You must also register with the Rhode Island Division of Taxation for state lodging taxes and obtain a Rhode Island sales tax permit. The property must comply with local zoning requirements, maintain adequate parking spaces (typically 2 per unit), meet fire safety standards including smoke and carbon monoxide detectors, and pass health department inspections. The approval timeline is generally 4-6 weeks after submitting a complete application, though this may extend during peak seasons. Once approved, you must display your permit number in all rental listings and advertisements, maintain guest registries, collect and remit state and local taxes, and ensure compliance with occupancy limits and noise ordinances specific to Jamestown's residential neighborhoods.

Short-term rentals (STRs) are legal in Jamestown, Rhode Island, but operate under specific municipal regulations that require property owners to obtain a business license and comply with zoning restrictions. The town allows STRs in residential zones but prohibits them in certain historic districts and areas near sensitive environmental zones, with properties required to maintain adequate parking, septic capacity, and noise controls. Jamestown implemented stricter regulations around 2019-2020 following concerns about housing availability and neighborhood character, establishing limits on the number of rental days per year (typically 180 days maximum) and requiring annual inspections for safety compliance. Property owners must register with both the town and the state, collect occupancy taxes, and maintain liability insurance, while violations can result in fines up to $1,000 and license revocation. Recent changes have focused on enforcement mechanisms and neighbor complaint procedures, with the town conducting regular reviews of STR impacts on the local housing market and community character.

The best areas for Airbnb investment in Jamestown, Rhode Island are the Historic Downtown/Conanicus Avenue corridor, which attracts tourists visiting the Jamestown Windmill (1787) and nearby shops while offering easy access to ferry services to Newport; the East Ferry/Narragansett Bay waterfront district, popular for its scenic harbor views and proximity to Fort Wetherill State Park where visitors come for diving, fishing, and cliff walking; the Beavertail area near Beavertail State Park and Lighthouse, which draws nature enthusiasts, photographers, and families year-round for its dramatic coastline and lighthouse tours; and the West Side/Mackerel Cove vicinity, favored by beach-goers and water sports enthusiasts visiting the protected swimming beach and kayaking areas. These locations benefit from Jamestown's position as a gateway between Newport and the mainland, attracting overflow visitors during Newport's peak tourism seasons (May-October), wedding parties seeking quieter accommodations near Newport venues, and outdoor recreation enthusiasts visiting the island's numerous parks, with properties near the water commanding premium rates due to Rhode Island's limited coastal inventory and the island's reputation as a peaceful retreat from urban areas.

In Jamestown, Rhode Island, Airbnb hosts are subject to Rhode Island's state hotel tax of 5% on gross receipts from short-term rentals under 30 days, which applies to all transient accommodations including vacation rentals. The state also imposes a 7% sales tax on lodging, bringing the total state tax burden to 12%. Additionally, Jamestown may impose a local hotel/lodging tax of up to 5% under Rhode Island General Laws, though the specific local rate varies by municipality. These taxes are typically collected by Airbnb directly from guests at the time of booking for properties where Airbnb has entered into voluntary collection agreements with the state, which began around 2019. For properties where Airbnb doesn't collect automatically, hosts must register with the Rhode Island Division of Taxation, collect taxes from guests, and remit payments quarterly using Form T-204A. Exemptions generally include stays of 30 days or longer, which are considered long-term rentals rather than transient accommodations, and certain government or charitable organization bookings may qualify for exemptions with proper documentation.

To start an Airbnb in Jamestown, Rhode Island, expect total costs around $850,000-$950,000. Property purchase represents the largest expense at approximately $750,000-$800,000 based on median home prices in this coastal community as of 2023-2024. Furnishing costs typically range $25,000-$35,000 for a complete setup including beds, linens, kitchen essentials, living room furniture, and decor to create an attractive rental space. Initial setup costs including professional photography, listing creation, welcome materials, and basic supplies total around $3,000-$5,000. Permits and fees in Rhode Island include business registration ($50), potential local permits ($200-$500), and tax registration which are relatively minimal. Insurance costs approximately $2,000-$3,000 annually for short-term rental coverage beyond standard homeowner's insurance. Utilities including electricity, water, sewer, internet, and cable average $300-$500 monthly or $1,800-$3,000 for six months. First six months operating costs encompass cleaning services ($150-$200 per turnover), maintenance reserves ($2,000-$3,000), marketing expenses ($1,000), and miscellaneous supplies ($1,500), totaling approximately $15,000-$20,000. Property taxes and potential HOA fees add another $8,000-$12,000 for the initial six-month period, bringing the comprehensive startup investment to nearly $900,000 for a typical Jamestown Airbnb property.

Airbnb properties in Jamestown, Rhode Island demonstrate strong profitability potential due to the area's desirability as a coastal vacation destination, with average nightly rates ranging from $150-400 depending on property size and proximity to water. Properties typically generate $25,000-60,000 in annual revenue, with waterfront homes commanding premium rates during peak summer months (June-September) when occupancy rates reach 75-85%. Operating expenses generally include 25-30% for Airbnb fees and payment processing, $3,000-8,000 annually for cleaning and maintenance, $2,000-5,000 for property management if outsourced, and $4,000-12,000 for utilities and insurance, resulting in net profit margins of 35-50% for well-managed properties. Success factors include proximity to Beavertail State Park and Fort Wetherill, high-quality photos showcasing ocean views, responsive host communication, and amenities like outdoor spaces and modern kitchens. A typical 3-bedroom waterfront cottage generating $45,000 annually with $22,000 in expenses yields approximately $23,000 profit, representing a 51% margin, while inland properties may see more modest returns of $15,000-25,000 profit annually due to lower nightly rates but potentially higher occupancy during shoulder seasons.

Airbnb investments in Jamestown, Rhode Island typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, driven by the town's prime coastal location and seasonal tourism demand from May through October. Properties near Beavertail State Park and Fort Wetherill command premium rates of $200-400 per night during peak summer months, with occupancy rates averaging 65-75% annually. Initial profitability usually occurs within 18-24 months for well-positioned properties, with waterfront or water-view homes achieving the higher end of returns due to Jamestown's appeal as a Newport County destination. The market benefits from consistent demand from visitors to nearby Newport mansions and sailing events, though investors should account for seasonal fluctuations where winter months may see 30-40% lower occupancy rates, making location and property amenities critical factors in achieving optimal returns in this established Rhode Island vacation rental market.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Jamestown, Rhode Island. Local real estate agents like Lila Delman Real Estate International and Residential Properties Ltd. have extensive knowledge of the Newport County market and can help identify waterfront and historic properties suitable for vacation rentals. Gustave White Sotheby's International Realty also serves the Jamestown area with luxury property expertise. National services include AirDNA for market analytics, Mashvisor for investment property analysis, and BiggerPockets for networking with other STR investors. RedAwning and Vacasa provide property management services for Airbnb investments, while companies like AirBnB Automated and HostGPO offer operational support. Local property management companies such as East Bay Property Management and Ocean State Property Management can assist with day-to-day operations. Additionally, STR-focused investment firms like Awning and Roofstock have expanded their services to include New England markets, providing turnkey Airbnb investment opportunities in coastal Rhode Island communities like Jamestown.