Is Jerusalem, Rhode Island Good for Airbnb Investment?

Potentially—Jerusalem, Rhode Island combines visitor demand with long-term real estate upside.

• Presents a unique opportunity given the area's coastal charm and proximity to major New England attractions.
• This small Rhode Island community benefits from its location near popular destinations like Newport and the scenic coastline.
• The region's appeal is enhanced by its historic character, outdoor recreational opportunities, and seasonal tourism patterns that can support strong summer occupancy rates.
• While property values in Rhode Island's coastal areas have appreciated considerably, making initial investments substantial.
• Investors should, however, carefully consider the highly seasonal nature of demand, local zoning restrictions, and competition from established vacation rental markets in nearby coastal communities.

$800–$2,400 monthly based on location, season, and property quality.

• Based on available market data and regional analysis, Airbnb hosts in Jerusalem, Rhode Island typically earn between $800-$2,400 monthly.
• Peak summer months (June through August) can generate 40-60% higher revenues compared to winter months.
• Single-room listings average $800-$1,200 monthly while entire homes command $1,500-$2,400, with waterfront or water-view properties commanding premium rates up to 25% above market average.
• Key factors affecting earnings include proximity to beaches and recreational areas, property condition and amenities, seasonal demand from summer visitors to nearby coastal attractions.
• Occupancy rates typically range from 45-65% annually, with summer months achieving 70-85% occupancy while winter months may drop to 25-40%.

Potentially strong—typical annual ROI is 8–12%.

• Typically generate ROI between 8-12% annually, with payback periods averaging 7-9 years for properties purchased in the $300,000-450,000 range that command nightly rates of $120-180 during peak seasons.
• The market benefits from proximity to Newport's tourist attractions and coastal access, allowing well-positioned properties to achieve 65-75% occupancy rates during summer months while dropping to 35-45% in winter.
• Compared to traditional long-term rentals yielding 6-8% ROI in the area, short-term rentals can outperform by 2-4 percentage points, though this comes with higher operational costs including cleaning fees.
• Properties within walking distance of beaches or historic sites tend to achieve the higher end of ROI ranges, while inland properties typically see more modest returns of 6-9%.

Jerusalem, Rhode Island averages 45–50% annual occupancy, with seasonal variation.

• Jerusalem, Rhode Island, a small rural community in the western part of the state, experiences Airbnb occupancy rates averaging approximately 45-50% annually.
• Peak season occurs during summer months (June through August) when occupancy rates climb to 70-75%, driven by visitors exploring nearby attractions like the Stepping Stone Falls and outdoor recreational activities.
• Winter months experience the lowest occupancy at 25-35% due to limited tourist activities and harsh weather conditions.
• The area's occupancy rates are generally lower than coastal Rhode Island destinations like Newport or Narragansett, which can achieve 80-85% occupancy during peak summer months.

The strongest opportunities balance visitor demand, nightly rates, and acquisition cost.

• Jerusalem, Rhode Island is a small village within the town of Narragansett, and the best Airbnb investment neighborhoods include the Bonnet Shores area which offers premium oceanfront properties with high rental rates due to direct beach access and proximity to Narragansett Town Beach, attracting affluent summer vacationers willing to pay $300-500 per night.
• The Jerusalem village center provides excellent investment potential with its working fishing village charm, proximity to the Block Island Ferry terminal.
• The Galilee area near the State Pier offers strong rental demand from fishing enthusiasts and ferry passengers.
• Point Judith lighthouse vicinity properties capitalize on the iconic lighthouse attraction and dramatic coastal scenery.
• The residential streets between Route 108 and the harbor provide more affordable investment entry points while still offering walkability to beaches and restaurants.
• Properties near Scarborough State Beach benefit from the popular day-use beach facility and tend to have consistent summer bookings from beachgoers seeking convenient accommodations.
• The Salt Pond area offers a quieter investment option with nature-focused appeal, attracting kayakers and wildlife watchers while maintaining reasonable property acquisition costs and steady rental income from outdoor recreation enthusiasts.

Yes, but only where zoning permits short-term rentals and every required license is current.

• Short-term rental regulations in Jerusalem, Rhode Island are primarily governed by local zoning ordinances and state regulations.
• Property owners typically need to obtain a business license and comply with Rhode Island's lodging tax requirements.
• Occupancy limits generally follow building and fire codes, often restricting rentals to no more than 2 guests per bedroom plus 2 additional guests.
• Owner-occupancy requirements are not typically mandated at the state level, but local zoning may restrict short-term rentals in certain residential districts or require special use permits.
• The registration process involves obtaining a Rhode Island business registration, collecting and remitting 8% state sales tax plus 5% local hotel tax.
• Recent changes around 2019-2021 have included increased enforcement of tax collection requirements and some municipalities implementing stricter zoning controls on short-term rentals in residential neighborhoods.

Tax rates vary by jurisdiction; licensing, inspection, and insurance costs are additional.

• Short-term rentals in Jerusalem, Rhode Island are subject to Rhode Island's 13% state lodging tax.
• Property owners must register with the Rhode Island Division of Taxation and obtain a sales tax permit, which typically costs around $10-25 for initial registration.
• Annual business license fees range from $25-50 depending on the municipality, and properties may need to comply with local zoning permits costing approximately $50-150.
• Additionally, hosts must collect and remit the state's 1% tourism assessment fee on gross receipts.
• Some properties may require annual safety inspections costing $75-125, and there may be local registration fees of $100-200 annually depending on Jerusalem's specific ordinances.
• Income from short-term rentals is subject to standard Rhode Island income tax rates ranging from 3.75% to 5.99%, and federal income taxes apply as well.