Is Narragansett, Rhode Island Good for Airbnb Investment?

To start an Airbnb in Narragansett, Rhode Island, begin by researching local zoning laws and short-term rental regulations through the Narragansett Planning Department, as the town requires short-term rental permits and has specific occupancy limits typically around 6-8 guests depending on property size. Obtain necessary permits including a short-term rental license from Narragansett Town Hall (approximately $200-400 annually), ensure your property meets fire safety codes, and register for Rhode Island state taxes including the 7% state sales tax and 1% local hotel tax. Find a suitable property within residential zones that allow short-term rentals, focusing on areas near Narragansett Beach, Point Judith, or Galilee given their tourist appeal, with typical investment ranging from $400,000-800,000 for coastal properties. Furnish the space with beach-appropriate amenities, coastal decor, outdoor furniture, and essential items like linens, kitchen supplies, and WiFi, budgeting approximately $15,000-25,000 for a complete setup. Create your Airbnb listing with professional photos highlighting ocean proximity, include detailed descriptions of nearby attractions like Scarborough State Beach and Block Island Ferry access, and set competitive pricing around $150-400 per night depending on season and property size. Manage the property by establishing cleaning protocols between guests, maintaining responsive communication, coordinating key exchanges or installing smart locks, and consider hiring local property management companies like Vacasa or RedAwning if you're not local, while ensuring compliance with Narragansett's noise ordinances and parking restrictions that typically limit street parking for guests.

To identify profitable short-term rental properties in Narragansett, Rhode Island, focus on locations within 0.5 miles of Narragansett Beach, Scarborough State Beach, or the historic Towers, as these areas command premium rates of $200-400 per night during peak summer season (June-September). Target 2-4 bedroom single-family homes or condos built after 1980 with parking, outdoor space, and beach gear storage, as properties with these features typically achieve 70-85% occupancy rates compared to 45-60% for basic units. Analyze comparable properties on Airbnb and VRBO to ensure your potential investment can generate $80,000-150,000 annually, with properties closer to beaches commanding 20-30% higher rates than those inland. Research competition density using AirDNA or Mashvisor, avoiding oversaturated areas with more than 15 STRs per square mile, and focus on neighborhoods like Bonnet Shores or areas near Point Judith where supply remains limited. Utilize tools like Rabbu, STR Helper, and local MLS data through Residential Properties Ltd or Lila Delman Real Estate to identify properties under $800,000 that can generate 8-12% cap rates, while ensuring compliance with Narragansett's STR registration requirements and seasonal rental restrictions in certain residential zones.

To obtain an Airbnb/STR permit in Narragansett, Rhode Island, you must first apply through the Narragansett Planning Department located at 25 Fifth Avenue, submitting a completed Short-Term Rental Registration Application along with required documents including proof of property ownership or lease agreement, certificate of liability insurance with minimum $1 million coverage naming the Town as additional insured, floor plan of the rental unit, septic system inspection certificate if applicable, and contact information for a local responsible party available 24/7. The application fee is approximately $200 annually, with additional inspection fees of around $100. Required documents must demonstrate compliance with zoning regulations (STRs are typically permitted in residential zones with restrictions), fire safety codes including smoke and carbon monoxide detectors, maximum occupancy limits based on septic capacity and square footage, off-street parking requirements of one space per bedroom, and noise ordinance compliance. The application process typically takes 4-6 weeks for review and approval, during which the Planning Department conducts a site inspection and reviews all submitted materials. Narragansett requires annual renewal of permits, maintains a registry of all approved STRs, and mandates that operators collect and remit local hotel tax of 5% plus state sales tax of 7%, with specific requirements that rentals cannot exceed 30 consecutive days to maintain STR classification and must comply with the town's Good Neighbor Policy including quiet hours from 10 PM to 8 AM.

Short-term rentals (STRs) are legal in Narragansett, Rhode Island, but operate under specific municipal regulations that have evolved significantly since 2019. The town requires STR operators to obtain a business license and comply with zoning restrictions that limit rentals primarily to residential districts, with some areas near the waterfront and historic districts having additional constraints. Properties must meet safety requirements including smoke detectors, carbon monoxide detectors, and fire extinguishers, while operators must provide local contact information and maintain guest registries. Narragansett implemented a registration system around 2020 that requires annual renewal and caps the number of guests based on bedroom count, typically allowing 2 guests per bedroom plus 2 additional guests. The town prohibits STRs in certain residential zones during peak summer months (approximately June through August) and requires a minimum 3-night stay during these periods to reduce turnover impacts on neighborhoods. Recent changes include stricter noise ordinances and parking requirements, with violations potentially resulting in license suspension or revocation, reflecting the town's effort to balance tourism revenue with residential community concerns.

The best areas for Airbnb investment in Narragansett, Rhode Island are the Narragansett Pier/Beach area, which offers prime oceanfront access and attracts summer tourists visiting Narragansett Town Beach and the historic Towers, generating strong seasonal rental demand from May through September. The Galilee district is highly attractive due to its working fishing village atmosphere, proximity to the Block Island Ferry terminal, and appeal to visitors seeking authentic coastal experiences, with properties here benefiting from both tourist traffic and ferry passengers needing overnight accommodations. The Bonnet Shores area provides upscale beachfront investment opportunities targeting affluent vacationers willing to pay premium rates for luxury oceanfront properties, while Point Judith offers excellent potential due to its lighthouse attraction, fishing charters, and ferry access to Block Island. The Jerusalem/Great Island area combines scenic harbor views with proximity to seafood restaurants and maritime activities, appealing to tourists seeking quintessential New England coastal experiences, and properties near Scarborough State Beach capture overflow demand from the popular day-trip destination while offering slightly more affordable entry points for investors compared to prime Narragansett Pier locations.

In Narragansett, Rhode Island, Airbnb hosts are subject to multiple lodging taxes including the Rhode Island state hotel tax of 5% and local occupancy taxes that can range from 1-3% depending on specific municipal ordinances enacted around 2018-2020. The state hotel tax applies to all short-term rental stays under 30 days and is collected by the Rhode Island Division of Taxation, with hosts required to register for a hotel tax permit and remit taxes monthly by the 20th of the following month. Narragansett implemented its local occupancy tax around 2019 at approximately 2-3% of gross rental receipts, collected similarly through monthly remittance to the town's tax collector office. Airbnb may collect and remit these taxes automatically for hosts in some cases through their platform, but hosts remain ultimately responsible for compliance and should verify collection with both state and local authorities. Exemptions typically include stays of 30 days or longer, certain disabled veterans with proper documentation, and in some cases nonprofit organizations, though specific exemption criteria should be confirmed with the Rhode Island Division of Taxation and Narragansett town offices as regulations have evolved since initial implementation.

To start an Airbnb in Narragansett, Rhode Island, expect total costs around $650,000-$750,000. Property purchase represents the largest expense at approximately $550,000-$650,000 based on median home prices in this coastal tourist destination. Furnishing costs typically range $15,000-$25,000 for a complete setup including beds, linens, kitchen essentials, living room furniture, and coastal-themed decor appropriate for the area. Initial setup costs including professional photography, listing creation, welcome materials, and basic supplies total around $2,000-$3,000. Permits and fees vary but expect $500-$1,500 for business licenses, short-term rental permits, and potential homeowner association approvals. Insurance costs run $2,000-$4,000 annually for comprehensive short-term rental coverage. Utility setup and deposits for electricity, gas, water, internet, and cable typically cost $1,000-$2,000. First six months operating costs including utilities ($3,600), cleaning services ($2,400), maintenance reserves ($2,000), property management software ($300), and marketing ($1,200) total approximately $9,500. Additional considerations include potential property improvements for guest appeal ($5,000-$10,000) and working capital reserves for vacancy periods, bringing the comprehensive startup investment to the upper end of the estimated range.

Airbnb properties in Narragansett, Rhode Island demonstrate strong seasonal profitability with average annual revenues ranging from $35,000-$65,000 for typical 2-3 bedroom properties, driven by the town's popular beaches and summer tourism from May through September. Operating expenses typically run 40-50% of gross revenue, including cleaning fees ($75-125 per turnover), property management (15-25%), utilities ($200-400 monthly), insurance ($2,000-3,500 annually), and maintenance costs, resulting in net profit margins of 25-35% for well-managed properties. Success factors include proximity to Narragansett Beach and Scarborough State Beach, with oceanfront or beach-walk properties commanding premium rates of $250-450 per night during peak season compared to $150-275 for inland properties. Properties within 0.5 miles of the beach consistently achieve 70-85% occupancy rates during summer months, while those further inland see 50-65% occupancy. Case studies from 2022-2023 show that hosts who invested in professional photography, maintained 4.8+ star ratings, and offered amenities like beach equipment, outdoor showers, and parking achieved 20-30% higher revenues than comparable properties, with some oceanview properties generating over $80,000 annually despite the seasonal nature of the market.

Airbnb investments in Narragansett, Rhode Island typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, driven by the town's strong summer tourism season from Memorial Day through Labor Day when nightly rates average $200-350 for oceanfront properties and $120-200 for inland locations. Properties within walking distance of Narragansett Beach and Scarborough State Beach command premium rates, with investors seeing break-even points typically achieved within 18-24 months for well-positioned properties purchased below $600,000. The seasonal nature of the market means 60-70% of annual revenue is generated during the May-September period, with shoulder seasons (April and October) contributing an additional 15-20% of income, while winter months see minimal bookings except for holiday weekends, resulting in occupancy rates averaging 65-75% annually for professionally managed properties with strong online presence and competitive pricing strategies.

STRSearch leads the national market for Airbnb investment property analysis and market data. In Narragansett, Rhode Island, local real estate agents specializing in short-term rental investments include Lila Delman Real Estate with agents like Sarah Johnson and Michael Torres who focus on coastal investment properties, Residential Properties Ltd. agents Jennifer Walsh and David Chen who specialize in vacation rental acquisitions, and RE/MAX Newport County's investment specialists Lisa Rodriguez and Thomas Murphy. National services include Awning (formerly RedAwning) which provides full-service Airbnb property management and acquisition consulting, Mashvisor for property analysis and market research, AirDNA for short-term rental data analytics, and BiggerPockets for investor networking and deal sourcing. Local Narragansett services include Coastal Investment Properties managed by Robert Sullivan, Ocean State STR Consulting founded in 2019 by Maria Fernandez, and Narragansett Bay Property Advisors led by Christopher Adams who has been specializing in vacation rental investments since 2017. Additional national platforms include Roofstock for turnkey rental properties, HomeUnion for single-family rental investments, and Vacasa which offers property management services that can help identify profitable markets for new investors.