Is Mount Desert Island, Maine Good for Airbnb Investment?

To start an Airbnb on Mount Desert Island, Maine, begin by researching local regulations through the Town of Bar Harbor, Southwest Harbor, or other relevant municipalities, as each has specific short-term rental ordinances requiring registration and annual fees ranging from $200-500. Obtain necessary permits including a business license, fire safety inspection certificate, and plumbing/septic system approval from the Maine Department of Health and Human Services. Find property by working with local realtors like Legacy Properties Sotheby's or Knowles Company, focusing on areas zoned for short-term rentals with prices typically ranging $400,000-$1.2 million for suitable properties. Furnish the space with coastal Maine décor sourcing from local stores like Reny's or online retailers, ensuring essential amenities like high-speed internet, linens, kitchen supplies, and outdoor furniture for the typical $15,000-25,000 setup cost. List your property on Airbnb with professional photography highlighting ocean views, proximity to Acadia National Park, and local attractions, setting competitive rates of $150-400 per night depending on season and property size. Manage bookings using tools like Hospitable or hire local management companies such as Vacasa or RedAwning, ensuring compliance with Maine's 9% lodging tax collection, regular cleaning between guests, and maintaining relationships with local service providers for maintenance and emergency situations while capitalizing on the peak summer season from June through September when demand is highest.

To identify profitable short-term rental properties on Mount Desert Island, Maine, focus on locations within 2-3 miles of Acadia National Park entrances, Bar Harbor's downtown district, or waterfront areas with ocean views, as these command premium rates of $200-400+ per night during peak season (June-October). Target 2-4 bedroom properties built after 1980 with modern amenities, parking for 2+ vehicles, outdoor spaces like decks or patios, and ideally water views or proximity to hiking trails, as these features can increase occupancy rates to 70-85% during summer months. Analyze comparable properties using AirDNA and Mashvisor to identify the $150-250 per night sweet spot for shoulder seasons, while researching competition through Airbnb and VRBO searches within 5-mile radius to ensure market isn't oversaturated (aim for fewer than 50 similar properties). Utilize local resources like the Bar Harbor Chamber of Commerce for tourism data, Mount Desert Island real estate agents familiar with STR regulations, and the town's planning departments to understand zoning restrictions and permit requirements. Properties priced between $400,000-800,000 typically offer the best ROI potential of 8-15% annually, especially those requiring minor renovations that can be completed for under $50,000 to maximize rental appeal.

To obtain an Airbnb/STR permit in Mount Desert Island, Maine, you must apply through the Mount Desert Island Code Enforcement Office located at 99 Crooked Road, Bar Harbor, ME 04609, as the island consists of multiple municipalities including Bar Harbor, Southwest Harbor, and others that each have specific requirements. Required documents typically include a completed short-term rental application, proof of property ownership or lease agreement, floor plan showing maximum occupancy, septic system inspection certificate, fire safety plan, parking plan showing adequate off-street parking, and liability insurance certificate of at least $1 million. Application fees generally range from $150-300 initially with annual renewal fees of $100-200, varying by municipality. The approval timeline is typically 30-60 days from submission of a complete application, though this can extend to 90 days during peak season or if revisions are needed. Mount Desert Island specific requirements include adherence to the island's seasonal population limits, compliance with wastewater disposal regulations due to environmental sensitivity, maintaining quiet hours typically from 9 PM to 7 AM, providing adequate parking without impacting neighbors, ensuring the property meets life safety codes including smoke and carbon monoxide detectors, and registering with the state of Maine's lodging registration system. Some areas may have additional restrictions on the percentage of properties that can operate as short-term rentals or require neighborhood notification processes before approval.

Short-term rentals (STRs) on Mount Desert Island, Maine face a complex patchwork of regulations that vary significantly by municipality, with most towns implementing strict restrictions or outright bans in recent years. Bar Harbor, the island's largest town, enacted a moratorium on new STR permits in 2021 and has since implemented a cap limiting STRs to approximately 300 units with a lottery system for permits, while prohibiting them entirely in certain residential zones. Southwest Harbor banned new STRs in most residential areas in 2022, allowing them only in commercial zones, while Tremont has implemented similar restrictions limiting STRs primarily to commercial districts. Mount Desert (the town) has enacted zoning restrictions that effectively prohibit STRs in most residential neighborhoods, and several other island communities have implemented caps, setback requirements, and registration systems. These restrictions were largely implemented between 2020-2023 in response to housing shortages and community concerns about the impact of vacation rentals on year-round residents, with most municipalities requiring permits, inspections, and compliance with specific occupancy and parking requirements where STRs remain legal.

The most lucrative Airbnb investment areas on Mount Desert Island include Bar Harbor, which serves as the primary gateway to Acadia National Park and attracts millions of visitors annually from May through October, offering proximity to restaurants, shops, and park entrances. Southwest Harbor provides excellent returns due to its working waterfront charm, boat tours to offshore islands, and the Wendell Gilley Museum, appealing to visitors seeking authentic Maine coastal experiences. Northeast Harbor attracts affluent tourists with its upscale shops, yacht clubs, and proximity to Jordan Pond House, commanding premium nightly rates during peak season. Seal Harbor offers high-end investment opportunities given its exclusive summer colony history and stunning coastal views, though with more limited inventory. Bass Harbor draws visitors to its iconic lighthouse and serves as a quieter alternative to Bar Harbor while maintaining strong occupancy rates. The Somesville area, known as the "most photographed village in Maine," provides unique investment potential with its historic charm and central location for exploring the entire island, particularly attractive during fall foliage season from late September through mid-October.

Mount Desert Island, Maine imposes several lodging taxes on Airbnb rentals, including a state lodging tax of 9% on all short-term rental accommodations under 28 days, which hosts must collect from guests and remit monthly to Maine Revenue Services by the 15th of the following month if monthly gross receipts exceed $3,000, or quarterly if less. Hancock County levies an additional 5% lodging tax that applies to all transient accommodations, bringing the total tax rate to approximately 14% for most Airbnb stays. The town of Bar Harbor, which covers much of Mount Desert Island's tourist areas, adds a local lodging tax of 1% during peak season (June through October), making the combined rate 15% during these months. Hosts must register for a Maine Revenue Services account and obtain a lodging license, with taxes collected at the time of booking and remitted electronically through the state's portal. Exemptions include stays over 28 consecutive days, accommodations rented to the same person for more than 28 days in a calendar year, and rentals to permanent residents, though documentation is required to prove exemption status. Failure to collect and remit these taxes can result in penalties of up to 25% of the unpaid tax amount plus interest.

Starting an Airbnb on Mount Desert Island, Maine requires approximately $650,000-$750,000 in total initial investment. Property purchase represents the largest expense at $500,000-$600,000 for a median 2-3 bedroom home suitable for short-term rental, with waterfront or Acadia National Park proximity commanding premium prices. Furnishing costs range $25,000-$35,000 for complete setup including beds, linens, kitchen equipment, living room furniture, and outdoor gear typical for the area. Initial setup expenses total $8,000-$12,000 covering professional photography, listing creation, welcome materials, and basic renovations or improvements. Permits and fees include Maine lodging license ($50), local business registration ($100-$300), and potential town-specific short-term rental permits ($200-$500), totaling approximately $1,000. Insurance costs $3,000-$5,000 annually for short-term rental coverage through companies like Proper Insurance or CBIZ. Utilities including electricity, water, internet, and seasonal heating average $400-$600 monthly. First six months operating costs encompass utilities ($2,400-$3,600), cleaning services ($3,000-$4,500), maintenance reserves ($2,000), marketing ($1,000), and platform fees to Airbnb and VRBO ($2,000-$3,000), totaling $10,400-$14,100 for the initial operating period.

Airbnb properties on Mount Desert Island, Maine, particularly near Acadia National Park, demonstrate strong seasonal profitability with average daily rates ranging from $150-400 during peak summer months (June-September) and dropping to $80-150 in off-season. A typical 3-bedroom property generates approximately $35,000-55,000 in annual revenue, with expenses including property management fees (15-25%), cleaning costs ($75-125 per turnover), utilities ($200-400 monthly), insurance ($1,500-3,000 annually), and maintenance ($3,000-6,000 yearly), resulting in net profit margins of 25-40% for well-managed properties. Success factors include proximity to Acadia National Park entrances, waterfront locations commanding 30-50% premium rates, professional photography, and responsive guest communication, with properties in Bar Harbor and Southwest Harbor consistently outperforming inland locations. Properties like oceanfront cottages in Seal Harbor have achieved occupancy rates of 85-95% during peak season with average nightly rates exceeding $350, while inland properties typically see 60-75% occupancy at $180-250 per night, and the market benefits from limited hotel inventory on the island, creating sustained demand for vacation rentals despite Maine's recent short-term rental regulations requiring registration and local compliance.

Airbnb investments in Mount Desert Island, Maine typically generate annual ROI of 12-18% due to the area's proximity to Acadia National Park and strong summer tourism demand from June through October. Cash-on-cash returns generally range from 8-14% annually, with properties near Bar Harbor and Southwest Harbor commanding premium rates of $200-400 per night during peak season and $80-150 during shoulder months. Most investors achieve profitability within 18-24 months, assuming a 25-30% down payment on properties averaging $400,000-600,000, with gross rental yields of 6-9% annually. The market benefits from limited hotel inventory and consistent demand from outdoor enthusiasts, though investors should account for 4-5 months of reduced occupancy during winter months when many properties generate 60-70% less revenue than peak summer performance.

STRSearch is a national platform that specializes in identifying profitable short-term rental investment properties including those on Mount Desert Island, Maine. Local real estate agents who focus on Airbnb investment properties in the area include Knowles Company (established 1946), which has extensive experience with Bar Harbor and Acadia National Park area properties, and Legacy Properties Sotheby's International Realty, which serves the Mount Desert Island market with luxury and investment property expertise. Village Real Estate and A.H. Higgins Real Estate also provide services for investors seeking vacation rental properties in the region. National services include Awning, which offers end-to-end Airbnb investment services including property identification and management, BiggerPockets for networking and deal analysis, and Roofstock, which occasionally features short-term rental investment opportunities in Maine markets. AirDNA provides market data and analytics specifically for short-term rental investments in the Mount Desert Island area, while Mashvisor offers investment property analysis tools that cover the Maine coastal market. Local property management companies like Acadia Cottage Rentals and Mount Desert Island Rentals can also assist investors in identifying properties that would make successful Airbnb investments based on their market knowledge and rental performance data.