Is Jerusalem, Rhode Island Good for Airbnb Investment?

To start an Airbnb in Jerusalem, Rhode Island, begin by researching local zoning laws and regulations through the Town of Exeter (which encompasses Jerusalem) planning department, as Rhode Island requires short-term rental operators to register with the state and obtain a business license through the Rhode Island Division of Taxation. Contact the Exeter Building Official to determine if you need special permits or if your property is zoned for short-term rentals, and check if there are any restrictions on rental duration or occupancy limits. Find a suitable property by searching real estate listings in the Jerusalem area, focusing on homes near Arcadia Management Area or other local attractions, ensuring the property has adequate parking and meets safety requirements including smoke and carbon monoxide detectors. Obtain necessary permits including a Rhode Island short-term rental registration, local business license from Exeter, and ensure compliance with state tax requirements for collecting and remitting occupancy taxes. Furnish the property with essential amenities like quality bedding, kitchen supplies, WiFi, and local guidebooks highlighting nearby attractions like Stepstone Falls and Beach Pond. Create your Airbnb listing with professional photos, detailed descriptions emphasizing the rural setting and proximity to outdoor activities, and competitive pricing based on similar properties in Washington County. Manage your property by establishing check-in procedures, maintaining cleanliness standards, responding promptly to guest inquiries, and keeping detailed records for tax purposes while ensuring compliance with Rhode Island's short-term rental laws that became effective in recent years.

For identifying profitable short-term rental properties in Jerusalem, Rhode Island, focus on waterfront locations within 0.5 miles of Narragansett Bay or coastal areas, as these command premium rates of $200-400 per night during peak summer season (June-September). Target 2-4 bedroom single-family homes or condos built after 1980 with modern amenities, outdoor spaces, parking, and water views, as these features can increase occupancy rates by 25-30% compared to inland properties. Conduct pricing analysis using AirDNA and Mashvisor to identify properties where potential STR revenue exceeds long-term rental income by at least 40%, typically requiring nightly rates of $150-250 in shoulder seasons and $250-450 during summer months. Research competition within a 2-mile radius using Airbnb and VRBO searches, targeting areas with fewer than 15 active listings to avoid oversaturation while ensuring sufficient demand exists. Utilize Rhode Island MLS data through local realtors, monitor Zillow and Realtor.com for properties under $600,000 that can generate 15-20% annual returns, and leverage STR-specific analytics tools like Rabbu and AllTheRooms to analyze Jerusalem's seasonal occupancy patterns, which typically peak at 80-90% in July-August and drop to 30-40% in winter months.

To obtain an Airbnb/STR permit in Jerusalem, Rhode Island, you must first contact the Jerusalem Town Clerk's office at Town Hall located on Main Street to inquire about short-term rental regulations, as Jerusalem may fall under broader South Kingstown jurisdiction for permitting. You'll need to submit a completed short-term rental application form, provide proof of property ownership or lease agreement, submit a detailed floor plan of the rental unit, obtain a certificate of occupancy, provide proof of liability insurance (typically $1 million minimum), and include contact information for a local property manager if you're not residing on-site. Required documents also include a life safety inspection certificate from the local fire department, septic system compliance certificate if applicable, and neighbor notification forms. The application fee is estimated at $200-400 annually, with additional inspection fees of approximately $100-150. The timeline typically takes 4-6 weeks from submission to approval, provided all documentation is complete and inspections pass. Specific Jerusalem requirements likely include adherence to coastal zone management regulations due to its proximity to water bodies, compliance with historic district guidelines if applicable, parking requirements of at least two spaces per unit, maximum occupancy limits based on bedroom count plus two additional guests, and mandatory posting of emergency contact information and local regulations within the rental unit.

Short-term rentals (STRs) in Jerusalem operate under Israeli national regulations and local municipal rules, with the legal framework being relatively permissive but subject to specific restrictions. As of 2023, STRs are generally legal in Jerusalem, but hosts must register with the Israeli Ministry of Tourism and obtain proper licensing, particularly for properties rented for more than 30 days per year. The Jerusalem Municipality requires compliance with safety standards, fire regulations, and building codes, while certain residential areas may have restrictions on commercial activities including short-term rentals. Recent changes around 2022-2023 have tightened registration requirements and increased enforcement of tax obligations, with hosts required to collect and remit tourist taxes. Some historic neighborhoods and areas near religious sites may have additional restrictions, and apartment buildings can impose their own bylaws limiting STR operations. In contrast, Rhode Island has more developed STR regulations at the state level, requiring registration, safety inspections, and compliance with local zoning laws, with many municipalities implementing their own additional restrictions on density and operational requirements.

The most promising Airbnb investment areas in Jerusalem, Rhode Island would be the historic downtown district near the Jerusalem General Store and surrounding rural properties, which attract visitors seeking authentic New England countryside experiences and fall foliage tourism from September through November. The areas along Route 2 and near the Yawgoog Scout Reservation draw families and groups attending scouting events and summer camps throughout the warmer months. Properties near the Wood River and Beach Pond areas are attractive for outdoor enthusiasts, fishing, and water recreation activities, particularly during summer months when demand peaks. The rural residential areas offer peaceful retreats for visitors escaping urban areas like Providence and Boston, with properties featuring historic charm from the 1800s being especially appealing to tourists interested in colonial and early American history, while the proximity to Arcadia Management Area makes it attractive for hiking and nature enthusiasts year-round.

There are no lodging or occupancy taxes specifically applicable to Airbnbs in Jerusalem, Rhode Island, as Jerusalem is an unincorporated village within the town of Narragansett in Washington County and does not impose its own municipal lodging taxes. However, Airbnb hosts in this area are subject to Rhode Island's state hotel tax of 5% on gross receipts from short-term rental accommodations, which applies to rentals of less than 30 consecutive days. The state tax is collected directly by Airbnb from guests at the time of booking and remitted to the Rhode Island Division of Taxation on behalf of hosts, eliminating the need for individual host remittance in most cases. Hosts must still register with the state and may need to file periodic returns depending on their rental activity volume. There are no specific exemptions for small-scale operators, though rentals of 30 days or longer are exempt from the hotel tax. Additionally, hosts must comply with any applicable state and local income tax obligations on their rental income, and depending on the specific location within Narragansett, there may be local business licensing requirements that could affect tax obligations.

The total cost to start an Airbnb in Jerusalem, Rhode Island would be approximately $285,000-$320,000. Property purchase costs around $250,000 based on median home prices in rural Rhode Island communities. Furnishing a 2-3 bedroom property would cost $15,000-$20,000 including beds, linens, kitchen essentials, and living room furniture from retailers like IKEA, Wayfair, and local stores. Initial setup costs including professional photography, listing creation, and basic renovations would be $3,000-$5,000. Permits and fees including business registration, short-term rental permits, and potential zoning approvals would cost $500-$1,500 depending on local regulations. Insurance including landlord and short-term rental coverage would be $2,000-$3,000 annually. Utilities setup and deposits for electricity, water, internet, and cable would cost $500-$800. First six months operating costs including utilities ($600/month), cleaning services ($100 per turnover), maintenance, supplies, and platform fees would total approximately $4,000-$6,000. Additional costs may include marketing, professional management services, and emergency repairs during the initial period.

Airbnb properties in Jerusalem, Rhode Island face significant profitability challenges due to the area's small population of approximately 1,500 residents and limited tourist infrastructure, with average daily rates typically ranging from $80-120 compared to major tourist destinations. Properties in this rural coastal town generally achieve occupancy rates of 35-45% annually, generating gross revenues of $12,000-18,000 per year for typical 2-bedroom units, while expenses including property taxes ($3,000-5,000), utilities ($2,400), cleaning fees ($1,800), maintenance ($2,000), and Airbnb fees (3% host fee plus guest service fees) total approximately $10,000-12,000 annually. Net profit margins typically range from 15-25%, yielding $2,000-6,000 in annual profit, making properties marginally profitable primarily during summer months when proximity to Narragansett Bay attracts visitors. Success factors include waterfront or water-view locations, competitive pricing below $100/night, exceptional cleanliness standards, and marketing the property's peaceful rural setting and proximity to Newport (20 minutes) and Providence (45 minutes). Properties without water access or unique amenities often struggle to maintain year-round bookings, with winter occupancy dropping to 10-15%, making seasonal operation more viable than year-round hosting for maximizing profitability in this small Rhode Island community.

Airbnb investments in Jerusalem, Rhode Island are expected to generate annual ROI of 12-18% based on the area's proximity to Newport's tourist attractions and seasonal rental demand. Cash-on-cash returns typically range from 8-14% annually, with properties averaging $150-250 per night during peak summer months (June-September) and $80-120 during off-season. Initial profitability is generally achieved within 18-24 months, assuming average property acquisition costs of $400,000-600,000 and renovation investments of $25,000-40,000. The market benefits from Rhode Island's strong tourism industry, with companies like Newport Mansions and local wedding venues driving consistent demand, particularly given Jerusalem's location near popular beaches and the Block Island ferry terminal, resulting in occupancy rates of 65-75% annually with gross rental yields of 10-16%.

STRSearch is a national platform that specializes in identifying profitable short-term rental investment properties across markets including Jerusalem, Rhode Island. Local real estate agents like Keller Williams Rhode Island and RE/MAX Newport County have agents experienced in investment properties who understand the Airbnb market dynamics in the Jerusalem area. National services include Mashvisor, which provides Airbnb analytics and property recommendations, and AirDNA, offering market data and investment insights for short-term rentals. BiggerPockets connects investors with local professionals and resources, while Roofstock focuses on turnkey rental properties that can be converted to Airbnb use. Local property management companies like Ocean State Property Management and Coastal Rhode Island Rentals often assist investors in identifying and managing profitable vacation rental properties. RedAwning and Vacasa provide market analysis and property management services that help investors evaluate potential Airbnb investments. Additionally, local real estate investment groups and meetups in the Providence area often have members familiar with the Jerusalem market who can provide referrals to specialized agents and service providers focused on short-term rental investments.