Is Misquamicut, Rhode Island Good for Airbnb Investment?

To start an Airbnb in Misquamicut, Rhode Island, begin by researching Westerly's short-term rental regulations, as Misquamicut falls under this jurisdiction, which typically requires a business license and may have zoning restrictions for rental properties near the beach area. Obtain necessary permits including a Rhode Island sales tax permit, local business license from Westerly Town Hall, and ensure compliance with fire safety codes and occupancy limits that are often stricter in coastal tourist areas. Find a suitable property within walking distance of Misquamicut State Beach, considering that beachfront or beach-adjacent properties command premium rates during summer months (May-September), with average nightly rates ranging from $200-500 depending on size and proximity to the beach. Furnish the property with beach-themed, durable furniture that can withstand sandy guests and high turnover, including essentials like beach chairs, umbrellas, outdoor shower facilities, and multiple sets of linens due to frequent changeovers during peak season. List your property on Airbnb with professional photos highlighting beach access, outdoor spaces, and proximity to Misquamicut's attractions, setting seasonal pricing with higher rates for summer weekends and events like the Westerly-Pawcatuck Fourth of July celebration. Manage the property by establishing relationships with local cleaning services familiar with beach rental turnovers, coordinate with nearby property management companies if you're not local, and prepare for the seasonal nature of bookings where 70-80% of annual revenue typically comes from the May-September period, requiring strategic pricing and availability management during the off-season months.

To identify profitable short-term rental properties in Misquamicut, Rhode Island, focus on oceanfront or ocean-view properties within walking distance of Misquamicut State Beach, as proximity to the beach drives 70-80% of rental demand during peak summer months (June-September). Target 3-4 bedroom single-family homes or condos with modern amenities, outdoor spaces, parking, and air conditioning, as these command $300-600 per night during peak season compared to $150-250 for inland properties. Analyze pricing using AirDNA and Mashvisor to benchmark against similar properties, noting that beachfront properties typically achieve 60-80% occupancy rates during summer with annual revenues of $40,000-80,000. Research competition by monitoring active Airbnb and VRBO listings within a 0.5-mile radius of the beach, identifying gaps in amenities or pricing strategies. Utilize tools like STR Helper for market analysis, connect with local property management companies such as Vacasa or RedAwning for operational insights, and consult with Westerly town officials regarding zoning regulations and STR licensing requirements, as the town has specific ordinances governing short-term rentals that affect profitability and legal compliance.

To obtain an Airbnb/STR permit in Misquamicut, Rhode Island, you must apply through the Westerly Town Hall Planning Department located at 45 Broad Street, Westerly, RI 02891, as Misquamicut is part of Westerly. Required documents include a completed short-term rental application, property deed or lease agreement, floor plan showing maximum occupancy, proof of liability insurance ($1 million minimum), septic system inspection certificate, fire safety inspection report, and parking plan showing adequate off-street spaces. The application fee is approximately $200-300 with an annual renewal fee of $150-200. You must also obtain a business license from the Town Clerk's office for an additional $50-75. The timeline typically takes 4-6 weeks for initial approval, though it may extend to 8-10 weeks during peak season due to increased applications. Specific Misquamicut requirements include maximum occupancy limits based on bedrooms (typically 2 persons per bedroom plus 2 additional), mandatory quiet hours from 10 PM to 8 AM, required posting of emergency contact information and house rules, compliance with coastal zone setback requirements, and adherence to parking restrictions (minimum 1 space per bedroom). Properties must also meet health department standards for water quality and septic systems, and owners must register with the Rhode Island Division of Taxation for lodging tax collection purposes.

Short-term rentals (STRs) are legal in Misquamicut, Rhode Island, but operate under Westerly's municipal regulations since Misquamicut is part of Westerly. The town requires STR operators to obtain a business license and comply with zoning restrictions, with most rentals concentrated in residential and mixed-use areas near the beach. Properties must meet health and safety standards, maintain adequate parking, and adhere to occupancy limits typically based on septic capacity and bedroom count. Noise ordinances are strictly enforced, particularly during summer months when tourism peaks, and violations can result in license suspension. Recent changes around 2019-2021 included enhanced registration requirements and stricter enforcement mechanisms following resident complaints about overcrowding and parking issues. The town generally supports STRs as they contribute significantly to the local tourism economy, but balances this with quality of life concerns for year-round residents. Properties in certain historic districts may face additional restrictions, and all STRs must comply with Rhode Island state tax collection requirements for transient accommodations.

The best areas for Airbnb investment in Misquamicut, Rhode Island are primarily concentrated along the beachfront and near Misquamicut State Beach, where properties command premium rates during the peak summer season from June through September due to direct beach access and proximity to the main tourist attractions. The Atlantic Avenue corridor and surrounding streets like Winnapaug Road offer excellent investment potential as they provide easy walking access to the beach while often featuring larger properties suitable for family groups and wedding parties, which are common given the area's popularity for destination weddings and family reunions. Properties near the Misquamicut Beach Club and close to local restaurants and entertainment venues along the main strip perform well due to the convenience factor for tourists who want to experience the local nightlife and dining scene. The residential areas just inland from the immediate beachfront, such as those near Weekapaug Road, can offer better value investments with slightly lower acquisition costs while still maintaining strong rental demand from visitors seeking quieter accommodations within a short drive or bike ride to the beach, and these areas also attract some business travelers visiting nearby Westerly for corporate purposes during the shoulder seasons.

Airbnb properties in Misquamicut, Rhode Island are subject to multiple lodging taxes including the Rhode Island state hotel tax of 5% on gross receipts, the state sales tax of 7%, and Westerly's local hotel tax of 6%, resulting in a combined tax rate of approximately 18% on short-term rental bookings. These taxes are typically collected by Airbnb directly from guests at the time of booking through their automated tax collection system, which began in Rhode Island around 2019, and the platform remits payments quarterly to the Rhode Island Division of Taxation and applicable local authorities. Property owners must register with the Rhode Island Division of Taxation to obtain a hotel tax permit and may need to file monthly returns even when Airbnb collects taxes, as backup reporting requirements often apply. The Westerly local hotel tax applies to rentals of less than 30 consecutive days, while stays of 30 days or longer are generally exempt from hotel taxes but may still be subject to sales tax. Additional local registration and licensing requirements may apply through the Town of Westerly, and property owners should verify current collection arrangements with Airbnb since tax collection agreements can change and may not cover all applicable taxes or jurisdictions.

The total cost to start an Airbnb in Misquamicut, Rhode Island is approximately $850,000-$950,000. Property purchase represents the largest expense at $700,000-$800,000 for a median beachfront or near-beach property suitable for vacation rentals in this popular summer destination. Furnishing costs range from $25,000-$35,000 to create an attractive, fully-equipped rental with quality furniture, appliances, linens, and beach amenities. Initial setup costs including professional photography, listing creation, and marketing materials total around $3,000-$5,000. Permits and fees including business license, short-term rental permit, and potential HOA approvals cost approximately $2,000-$4,000 annually. Insurance for a vacation rental property runs $4,000-$6,000 per year, significantly higher than standard homeowner's insurance. Utilities including electricity, water, internet, cable, and seasonal heating/cooling average $800-$1,200 monthly or $4,800-$7,200 for six months. First six months operating costs including cleaning services, maintenance, supplies, platform fees, and property management total $8,000-$12,000, with cleaning being the largest recurring expense at $100-$150 per turnover in this beach market.

Airbnb properties in Misquamicut, Rhode Island demonstrate strong seasonal profitability with average nightly rates ranging from $150-400 during peak summer months (June-August) and dropping to $75-150 in off-season periods. A typical 3-bedroom beach house can generate $35,000-55,000 in annual revenue, with expenses including property taxes ($8,000-12,000), insurance ($3,000-5,000), cleaning fees ($4,000-6,000), maintenance ($3,000-5,000), and Airbnb fees (3% host fee plus guest service fees), resulting in net profit margins of 40-60% for well-managed properties. Success factors include proximity to Misquamicut State Beach (properties within 0.2 miles command 25-40% premium rates), modern amenities like central air conditioning and updated kitchens, professional photography, and responsive host communication with 4.8+ star ratings. Properties with beach access or ocean views can achieve occupancy rates of 85-95% during summer months, while inland properties typically see 60-75% occupancy. The market benefits from consistent demand from Boston and New York metropolitan areas, with many hosts reporting 2019 revenues of $45,000-65,000 for premium beachfront properties, though 2020-2021 saw increased demand and rates due to domestic travel trends, with some hosts achieving 15-25% revenue increases compared to pre-pandemic levels.

Airbnb investments in Misquamicut, Rhode Island typically generate annual ROI of 12-18% due to the area's strong summer tourism demand and proximity to Misquamicut State Beach. Cash-on-cash returns generally range from 8-14% annually, with properties averaging $150-300 per night during peak season (June-September) and $75-150 during shoulder months. Most investors achieve profitability within 18-24 months, assuming a 20-25% down payment on properties valued between $400,000-800,000. The market benefits from consistent demand from New York and Boston vacationers, with occupancy rates typically reaching 70-85% during summer months and 40-55% year-round. Properties within walking distance of the beach command premium rates and faster profitability timelines of 12-18 months, while those requiring short drives may take 24-30 months to reach full profitability.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Misquamicut, Rhode Island. Local real estate agents serving the Westerly and Misquamicut area include Lila Delman Real Estate, Residential Properties Ltd., and Century 21 Topsail Realty, with agents like those at Gustave White Sotheby's International Realty who understand the seasonal rental market dynamics of this coastal community. National services that assist Airbnb investors include AirDNA for market analysis and revenue projections, Mashvisor for investment property analytics, and BiggerPockets for networking and deal sourcing. Local property management companies such as Vacasa and RedAwning provide turnkey solutions for investors, while regional firms like Ocean House Management and Coastal Property Services offer specialized vacation rental management in the Rhode Island shore area. Additional resources include STR Helper for property setup assistance, HostGPO for bulk purchasing discounts on furnishings, and local contractors and interior designers who specialize in vacation rental properties, typically found through the Westerly Chamber of Commerce and local real estate investment groups that have emerged since 2018 to serve the growing short-term rental market in this popular beach destination.