Is Mount Pleasant, Rhode Island Good for Airbnb Investment?

To start an Airbnb in Mount Pleasant, Rhode Island, begin by researching local zoning laws and regulations through the Town of Mount Pleasant planning department, as Rhode Island municipalities typically require short-term rental permits and may have occupancy limits or parking requirements. Obtain necessary permits including a business license from the Rhode Island Division of Taxation, collect and remit state sales tax (currently 7%), and secure proper insurance coverage that includes short-term rental liability. Find a suitable property by considering proximity to attractions like Newport mansions, beaches, or downtown Providence (about 45 minutes away), ensuring the property meets fire safety codes and has adequate parking for guests. Furnish the space with quality basics including comfortable bedding, kitchen essentials, WiFi, and local guidebooks highlighting nearby attractions like Fort Adams State Park or the Cliff Walk. Create your Airbnb listing with professional photos, competitive pricing (typically $80-150 per night in the Mount Pleasant area depending on property size and season), and detailed descriptions emphasizing the location's proximity to Newport and coastal attractions. Manage the property by establishing check-in procedures, maintaining cleanliness standards, responding promptly to guest inquiries, and coordinating cleaning between stays while ensuring compliance with Rhode Island's 30-day advance booking requirement for short-term rentals and maintaining records for tax purposes.

To identify profitable short-term rental properties in Mount Pleasant, Rhode Island, focus on waterfront or water-view locations within walking distance of beaches, particularly near Narragansett Bay, as these command premium rates year-round with peak summer demand from May through September. Target 2-4 bedroom single-family homes or condos built after 1980 with modern amenities, outdoor spaces, parking, and WiFi capability, as these typically achieve 65-75% occupancy rates and $150-300 nightly rates depending on proximity to water and season. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against similar properties in nearby Middletown and Portsmouth, aiming for properties that can generate $40,000-80,000 annually after expenses. Research competition by analyzing existing Airbnb and VRBO listings within a 2-mile radius, identifying gaps in amenities or underpriced properties, while monitoring seasonal pricing patterns and booking lead times. Utilize tools like Rabbu for Rhode Island-specific STR regulations, connect with local property management companies like RedAwning or Vacasa for market insights, and leverage the Rhode Island Statewide Planning Program's data on tourism trends and the Newport County tourism statistics to understand demand drivers, while ensuring compliance with Mount Pleasant's zoning laws and any HOA restrictions that may limit short-term rentals.

To obtain an Airbnb/STR permit in Mount Pleasant, Rhode Island, you must first contact the Mount Pleasant Town Clerk's office or zoning department to submit a short-term rental application, as Rhode Island municipalities typically regulate STRs at the local level. Required documents generally include a completed application form, proof of property ownership or lease agreement, floor plan of the rental unit, proof of liability insurance (minimum $1 million coverage), fire safety inspection certificate from the local fire department, and a business license from the Rhode Island Division of Taxation. Application fees typically range from $100-300 initially with annual renewal fees of $50-150, though Mount Pleasant may have specific fee structures. The timeline usually takes 30-60 days for processing, including inspections and review periods. Mount Pleasant likely requires compliance with zoning restrictions (many areas limit STRs to owner-occupied properties or specific zones), parking requirements (typically one space per bedroom), occupancy limits based on septic capacity and square footage, noise ordinances, and registration with the Rhode Island Division of Taxation for lodging tax collection. You must also obtain a Rhode Island sales tax permit and may need additional permits for properties near coastal areas or historic districts, with annual renewals required to maintain active permit status.

Short-term rentals (STRs) in Mount Pleasant, Rhode Island operate under state regulations rather than specific municipal ordinances, as Mount Pleasant is an unincorporated village within the town of Providence. Rhode Island generally permits STRs but requires hosts to register with the state, collect and remit state sales tax and local hotel tax, maintain liability insurance, and comply with health and safety standards including smoke and carbon monoxide detectors. The state implemented comprehensive STR regulations around 2019-2020 that require annual registration fees and adherence to occupancy limits based on property size. While there are no blanket prohibitions in Mount Pleasant specifically, hosts must ensure compliance with local zoning laws and any homeowners association restrictions that may apply to their particular neighborhood. Properties in historic districts or areas with specific zoning restrictions may face additional limitations, and the state reserves the right to suspend registrations for violations of health, safety, or tax requirements.

The most promising areas for Airbnb investment in Mount Pleasant, Rhode Island include the waterfront districts along Narragansett Bay, particularly near the Mount Pleasant Marina and Coggeshall Avenue corridor, which attract boaters, fishing enthusiasts, and visitors seeking scenic bay views year-round. The historic residential neighborhoods around Mount Pleasant Avenue offer charm and proximity to Providence's downtown business district, making them ideal for business travelers and tourists exploring Rhode Island's capital city. Areas near Roger Williams Park and the Elmwood Avenue commercial strip provide easy access to one of New England's premier urban parks, the Roger Williams Park Zoo, and cultural attractions, drawing families and leisure travelers especially during spring through fall seasons. The neighborhoods closest to Route 95 and Route 6 intersections offer convenience for travelers needing quick highway access while maintaining the quiet residential appeal that distinguishes Mount Pleasant from busier urban areas. Properties near the Providence River waterfront benefit from the growing culinary scene and waterfront dining establishments that have emerged since 2018, attracting food tourists and weekend visitors from Boston and New York metropolitan areas.

Mount Pleasant, Rhode Island imposes a local lodging tax of 5% on short-term rental accommodations including Airbnbs, which is collected in addition to Rhode Island's statewide hotel tax of 13% (comprising 7% sales tax and 6% hotel tax). The total effective tax rate for Airbnb guests is approximately 18%. These taxes are typically collected by Airbnb directly from guests at the time of booking through their automated tax collection system, which began operating in Rhode Island around 2019. Airbnb remits the collected taxes directly to the Rhode Island Division of Taxation on a monthly basis. Property owners must register with the state and obtain a hotel tax permit, and while Airbnb handles most collection and remittance, hosts remain responsible for ensuring compliance and may need to file returns even when taxes are collected by the platform. Exemptions generally apply to stays exceeding 30 consecutive days, which are considered long-term rentals rather than transient accommodations, and certain government or charitable organization bookings may also be exempt from these lodging taxes.

Starting an Airbnb in Mount Pleasant, Rhode Island requires a total investment of approximately $485,000-$565,000. Property purchase costs around $400,000-$450,000 based on median home prices in the area. Furnishing a 2-3 bedroom property runs $15,000-$25,000 including beds, linens, kitchen essentials, living room furniture, and decor. Initial setup costs total $3,000-$5,000 covering professional photography, listing optimization, welcome materials, and basic amenities. Permits and fees range from $500-$1,500 including business registration, short-term rental permits, and potential homeowner association approvals. Insurance increases by $1,200-$2,000 annually for short-term rental coverage. Utility setup and deposits cost $500-$800 for electricity, gas, water, internet, and cable. First six months operating costs total $8,000-$12,000 including utilities ($2,400), cleaning services ($2,400), maintenance and repairs ($1,500), property management software ($300), marketing ($500), and miscellaneous supplies ($900). Additional considerations include potential property management fees of 15-25% if outsourced, emergency fund reserves, and ongoing maintenance costs that can significantly impact profitability in this competitive Rhode Island coastal market.

Airbnb properties in Mount Pleasant, Rhode Island typically generate annual revenues of $15,000-$35,000 for seasonal rentals and $25,000-$45,000 for year-round properties, with peak summer months (June-September) commanding $150-$300 per night compared to $75-$150 during off-season periods. Operating expenses generally range from 40-60% of gross revenue, including property management fees (10-20%), cleaning costs ($50-$100 per turnover), utilities ($200-$400 monthly), insurance ($1,500-$3,000 annually), and maintenance ($2,000-$5,000 yearly), resulting in net profit margins of 15-35% for well-managed properties. Success factors include proximity to Newport attractions, waterfront access, professional photography, dynamic pricing strategies, and maintaining 4.8+ star ratings, with properties near beaches or historic sites achieving 70-85% occupancy rates compared to 45-60% for inland locations. A typical 3-bedroom coastal property purchased for $400,000 in 2019 generated $38,000 in gross rental income in 2023 with $22,000 in expenses, yielding a 4% net cash return plus property appreciation, while inland properties show more modest returns of 2-3% annually.

Based on Mount Pleasant, Rhode Island market conditions, Airbnb investments typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% depending on property type and location proximity to water access and Newport attractions. Single-family homes near Mount Hope Bay command higher nightly rates of $150-250 during peak summer months (June-September) versus $80-120 in off-season, while multi-family properties converted to short-term rentals show cash-on-cash returns of 7-9% annually. Initial profitability typically occurs within 18-24 months for well-positioned properties, with full investment recovery expected in 8-10 years. Properties within 2 miles of waterfront or historic sites demonstrate stronger performance with annual ROI reaching 10-14%, while inland properties average 6-9% returns. Seasonal occupancy rates fluctuate between 65-75% during summer peak and 35-45% in winter months, requiring careful cash flow management for mortgage coverage during slower periods.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties across markets including Mount Pleasant, Rhode Island. Local real estate agents specializing in investment properties in the Mount Pleasant area include Residential Properties Ltd., Lila Delman Real Estate, and Coldwell Banker Residential Brokerage, with agents like those at RE/MAX Newport County who understand the vacation rental market dynamics in Rhode Island's coastal regions. National services that assist with Airbnb investment property acquisition include AirDNA for market analysis, Mashvisor for property analytics, BiggerPockets for investor networking and deal sourcing, and Roofstock which occasionally features short-term rental properties. Additional local services include Ocean State Real Estate Investment Group and Newport County investment-focused agents who work with clients seeking vacation rental properties. Companies like Awning and RedAwning provide market analysis and property management services that can help identify profitable opportunities, while platforms like VRBO and Airbnb themselves offer host resource centers with market insights for the Mount Pleasant and broader Rhode Island market.