Is Montauk, New York Good for Airbnb Investment?

To start an Airbnb in Montauk, New York, begin by researching East Hampton Town's strict short-term rental regulations, which require properties to be owner-occupied and rentals limited to no more than 14 days per month with a maximum of two bedrooms available for rent. Obtain the necessary permits including a Certificate of Occupancy from East Hampton Town Building Department, a short-term rental permit (approximately $500-800 annually), and ensure compliance with fire safety codes requiring smoke detectors, carbon monoxide detectors, and emergency egress plans. Find a suitable property within the designated rental zones, typically single-family homes or approved multi-family dwellings, with properties near Montauk Point, Ditch Plains, or downtown commanding $300-800 per night during peak summer season. Furnish the space with coastal-themed, durable furniture including quality linens, kitchen essentials, beach equipment, and outdoor furniture to capitalize on Montauk's beach culture, budgeting $15,000-30,000 for complete furnishing. List your property on Airbnb with professional photography highlighting ocean views, beach access, and proximity to Montauk Lighthouse, Gurney's Resort, and local restaurants like The Lobster Roll, setting competitive rates that reflect seasonal demand with summer rates 3-4 times higher than off-season. Manage the property by establishing relationships with local cleaning services (typically $150-250 per turnover), maintenance contractors familiar with coastal property challenges, and consider hiring a local property management company like Hamptons Vacation Rentals or East End Property Management if you're not residing locally, while maintaining the required owner-occupancy compliance and guest registration records as mandated by East Hampton Town ordinances.

To identify profitable short-term rental properties in Montauk, New York, focus on locations within walking distance of Montauk Point State Park, Ditch Plains Beach, and downtown Montauk village, as these areas command premium rates during peak summer season (June-September) when properties can earn $400-800+ per night. Target 3-4 bedroom single-family homes or cottages with outdoor spaces, parking, and beach proximity, as these consistently outperform smaller units and can accommodate the family groups that dominate this market. Analyze pricing using AirDNA and Mashvisor to benchmark against comparable properties, noting that successful STRs in Montauk typically achieve 60-80% occupancy rates during summer months with average daily rates of $300-600 depending on proximity to beaches and amenities. Research competition through Airbnb, VRBO, and local rental agencies like Montauk Beach House Company and Gurney's Resorts to understand market saturation in specific neighborhoods, particularly around Hither Hills, downtown, and the Point area. Utilize tools like Rabbu, PriceLabs for dynamic pricing, and local resources including the Montauk Chamber of Commerce and East Hampton Town regulations to ensure compliance with local STR laws, while monitoring seasonal demand patterns that show 70-80% of annual revenue typically generated between Memorial Day and Labor Day.

To obtain an Airbnb/STR permit in Montauk, New York, you must apply through the East Hampton Town Clerk's office located at 159 Pantigo Road, East Hampton, NY 11937, as Montauk falls under East Hampton Town jurisdiction. Required documents include a completed short-term rental application, property deed or lease agreement, certificate of occupancy, floor plan showing maximum occupancy, proof of liability insurance ($1 million minimum), contact information for a local representative within 20 miles, and a $500 application fee plus $200 annual renewal fee. The process typically takes 60-90 days for approval and requires properties to be owner-occupied or have an on-site manager, limit occupancy to 2 people per bedroom plus 2 additional guests, maintain quiet hours from 10 PM to 8 AM, provide adequate parking (1 space per 2 guests), and comply with all fire safety codes including smoke and carbon monoxide detectors. Properties must also pass a health department inspection, display the permit number in all advertisements, and maintain a guest registry. East Hampton has implemented strict regulations since 2019 limiting the total number of STR permits issued and requiring properties to be registered before May 1st annually, with violations subject to fines up to $10,000 per day.

Short-term rentals (STRs) in Montauk, New York are heavily restricted and largely prohibited under East Hampton Town regulations implemented around 2018-2019. The town banned most STRs of less than 14 days in residential areas, including Montauk, following community concerns about housing shortages, noise, and neighborhood character disruption. Current regulations allow only rentals of 14 days or longer, with some limited exceptions for properties that had established rental histories before the restrictions took effect. The town requires registration and permits for any legal short-term rentals, with strict enforcement including significant fines for violations. These restrictions were strengthened in recent years as East Hampton joined other Hamptons communities in cracking down on platforms like Airbnb and VRBO, making Montauk one of the most restrictive areas for short-term rentals in New York State, though some legal longer-term seasonal rentals still operate under the 14-day minimum rule.

The most lucrative Airbnb investment areas in Montauk, New York include the Ditch Plains neighborhood, which attracts surfers and beach enthusiasts year-round due to its renowned surf breaks and proximity to Ditch Plains Beach, generating strong rental demand from March through November. The Montauk Village area near the harbor offers excellent investment potential with its walkable access to restaurants, bars, and fishing charters, appealing to tourists seeking the quintessential Montauk experience and business travelers visiting the commercial fishing industry. The Hither Hills area provides a premium investment opportunity due to its proximity to Hither Hills State Park and pristine beaches, attracting families and nature lovers willing to pay higher rates for secluded accommodations. The Montauk Point vicinity, near the iconic lighthouse and state park, commands premium pricing from tourists seeking landmark proximity and photographers, particularly during peak summer months and fall foliage season. The Old Montauk Highway corridor offers strategic positioning between beaches and town amenities, capturing both beach-goers and visitors attending events at venues like Gurney's Montauk Resort, while the Fort Pond area provides emerging investment value with its quieter setting that appeals to wellness retreats and corporate groups seeking peaceful accommodations away from crowded beach areas.

Airbnb properties in Montauk, New York are subject to multiple lodging taxes including New York State sales tax of 8% on short-term rentals under 90 days, Suffolk County occupancy tax of 3% on stays under 30 days, and the Town of East Hampton occupancy tax of 3% on rentals under 30 days, resulting in a combined tax rate of approximately 14% for most short-term stays. These taxes are typically collected by Airbnb directly from guests at the time of booking through their automated tax collection system, which began around 2016-2017 for New York jurisdictions. Airbnb remits the collected state and county taxes directly to the New York State Department of Taxation and Finance and Suffolk County respectively on a monthly basis, while the local East Hampton tax is remitted to the town's tax collector. Property owners are still responsible for registering with local authorities and may need to file periodic returns even when Airbnb collects taxes automatically. Exemptions generally apply to stays of 30 days or longer for county and local taxes, and 90 days or longer for state sales tax, though properties used as primary residences by the owner for part of the year may qualify for certain residential exemptions under specific circumstances.

Starting an Airbnb in Montauk, New York requires significant upfront investment due to the area's premium real estate market. Property purchase costs average $1.2-1.8 million for a suitable 3-bedroom home near the beach, with furnishing expenses ranging $25,000-40,000 for quality coastal-themed furniture, appliances, and amenities that attract summer renters. Initial setup costs include professional photography ($500-800), listing optimization ($1,000-2,000), and welcome amenities ($1,500), while permits and fees total approximately $2,500-4,000 including short-term rental permits, business licenses, and town registration fees. Insurance premiums for short-term rental coverage cost $3,000-5,000 annually, with utilities (electricity, water, internet, cable) averaging $800-1,200 monthly during peak season. First six months operating costs include cleaning services ($200 per turnover), property management fees (20-25% of revenue), maintenance reserves ($2,000-3,000), marketing expenses ($1,000), and miscellaneous supplies ($1,500). The total investment ranges from $1.29-1.92 million, with monthly operating costs of $2,500-4,000 depending on occupancy rates and seasonal demand fluctuations typical in this Hamptons-adjacent market.

Airbnb properties in Montauk, New York demonstrate strong seasonal profitability with average daily rates ranging from $400-800 during peak summer months (June-September) and dropping to $150-300 in off-season, generating annual revenues of $45,000-85,000 for well-positioned properties. Operating expenses typically consume 40-50% of gross revenue, including property management fees (15-25%), cleaning costs ($75-150 per turnover), utilities ($200-400 monthly), insurance ($2,000-4,000 annually), and maintenance reserves, resulting in net profit margins of 25-35% for successful operators. Success factors include proximity to beaches like Ditch Plains or downtown Montauk, modern amenities, professional photography, and dynamic pricing strategies, with oceanview properties commanding 30-50% premiums over inland locations. Case studies from 2022-2023 show that a 3-bedroom beach house near Montauk Point generated $78,000 in revenue with $32,000 in expenses, yielding a 59% profit margin, while inland properties averaged $52,000 revenue with similar expense ratios, and properties managed by companies like RedAwning or Vacasa typically achieve 15-20% higher occupancy rates through professional marketing and guest services, though their management fees reduce overall profitability by 5-8 percentage points.

Airbnb investments in Montauk, New York typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-15% depending on property type and location proximity to beaches. Properties within walking distance of Ditch Plains or Main Beach command premium rates of $400-800 per night during peak summer season (June-September), while off-season rates drop to $150-300 per night. A typical $800,000-1.2M property investment with 25% down payment can expect gross rental income of $80,000-140,000 annually, with net returns after expenses (property management, maintenance, taxes, insurance) yielding $35,000-65,000. Most investors achieve profitability within 18-24 months, with properties like those managed by companies such as Hamptons Luxury Rentals or East End Vacation Rentals showing occupancy rates of 65-80% during peak months. The seasonal nature of Montauk's market means 70% of annual revenue typically occurs between Memorial Day and Labor Day, with shoulder seasons (April-May, September-October) contributing another 20% of income.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties in Montauk, New York, using data analytics to evaluate potential returns. Local real estate agents specializing in Airbnb investments in Montauk include Saunders & Associates, which has been serving the Hamptons area since 1955, and Compass agents who focus on vacation rental properties in the East End. The Corcoran Group also has agents experienced in Montauk investment properties, particularly those suitable for short-term rentals. National services include Awning, which provides end-to-end Airbnb investment services including property identification and management, and Mashvisor, a real estate analytics platform that helps investors analyze rental potential in markets like Montauk. RedAwning offers vacation rental investment consulting services, while AirDNA provides market data and analytics specifically for short-term rental investments. Local property management companies like Hamptons Luxury Rentals and East End Property Management can assist with both finding properties and managing them post-purchase. Additionally, BiggerPockets connects investors with local experts, and Roofstock, though primarily focused on traditional rentals, has expanded into short-term rental markets and can help identify suitable properties in the Montauk area.