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 operators to obtain a business license and comply with specific occupancy limits and safety requirements established around 2019-2020. Contact the Rhode Island Department of Health for lodging establishment permits if renting for less than 30 days, and register for state sales tax with the Rhode Island Division of Taxation since short-term rentals are subject to 7% state sales tax plus 1% local hotel tax. Find a suitable property in residential zones that allow short-term rentals, focusing on areas near Narragansett Beach, Point Judith, or Galilee, ensuring the property meets fire safety codes including smoke detectors, carbon monoxide detectors, and proper egress windows. Furnish the space with coastal-themed decor, essential amenities like linens, kitchenware, WiFi, and beach equipment to attract summer tourists, while ensuring compliance with Americans with Disabilities Act requirements if applicable. Create listings on platforms like Airbnb, VRBO, and Booking.com with professional photography highlighting proximity to beaches, fishing, and Newport attractions, setting competitive rates based on seasonal demand with peak pricing during summer months (June-September). Manage the property by establishing check-in procedures, hiring local cleaning services familiar with short-term rental turnovers, maintaining 24/7 guest communication, and keeping detailed records for tax purposes while monitoring compliance with noise ordinances and parking restrictions that are strictly enforced in residential neighborhoods during peak tourist season.

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 $40,000-80,000 annually, with properties closer to beaches commanding 20-30% higher rates than those inland. Research competition by monitoring 50+ active STR listings in Narragansett using tools like AirDNA, Mashvisor, or STR Helper to identify gaps in amenities or underpriced properties, while checking the town's STR regulations and licensing requirements through the Narragansett Planning Department. Utilize local resources including the South County Tourism Council for market insights, partner with Narragansett-based property management companies like Vacasa or RedAwning for operational support, and consider properties near the University of Rhode Island's Bay Campus for potential off-season academic bookings to maintain year-round revenue streams.

To obtain an Airbnb/STR permit in Narragansett, Rhode Island, you must first apply through the Narragansett Planning Department located at Town Hall, 25 Fifth Avenue, by submitting a Short-Term Rental Registration application which requires a completed application form, proof of property ownership or lease agreement, certificate of liability insurance with minimum $1 million coverage naming the Town of Narragansett as additional insured, floor plan of the rental unit, parking plan showing adequate off-street parking, septic system inspection certificate if applicable, and contact information for a local property manager if you're an absentee owner. The application fee is approximately $200-300 annually, and you must also pay for required inspections by the Building Official and Fire Marshal which typically cost $100-150 each. The timeline for approval is generally 30-60 days depending on inspection scheduling and any required corrections. Narragansett-specific requirements include maintaining a maximum occupancy of 2 people per bedroom plus 2 additional guests, providing adequate parking (typically 1 space per bedroom), ensuring the property meets all building and fire safety codes, maintaining quiet hours from 9 PM to 8 AM, and having a local contact person available 24/7 who can respond to the property within 30 minutes if needed.

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 zones, with stricter controls in historic districts and areas near the waterfront. 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 prohibits STRs in certain residential neighborhoods to preserve community character, particularly in areas with high concentrations of year-round residents, and limits the number of guests based on bedroom count and parking availability. Recent changes implemented around 2020-2021 included stricter noise ordinances, mandatory registration with the town, and enhanced penalties for violations, reflecting the community's effort to balance tourism revenue with residential quality of life concerns that intensified during the COVID-19 pandemic tourism boom.

The best areas for Airbnb investment in Narragansett, Rhode Island are the Narragansett Pier and Beach District, which offers prime oceanfront access and proximity to popular attractions like the Narragansett Town Beach and the historic Towers, making it highly attractive to summer tourists and weekend visitors from Boston and New York. The Galilee area is excellent for fishing enthusiasts and those seeking authentic coastal experiences, with its working fishing village atmosphere and ferry access to Block Island, particularly appealing during the summer fishing season and Block Island ferry traffic periods from May through October. The Point Judith area provides strong rental potential due to its lighthouse attraction, fishing charters, and ferry terminal, drawing both tourists and business travelers connected to the maritime industry. The Bonnet Shores neighborhood offers upscale vacation rental opportunities with its exclusive beach club access and quieter residential setting, appealing to families and groups seeking premium accommodations. Finally, properties near Scarborough State Beach attract budget-conscious travelers and large groups due to the expansive beach area and camping facilities, with strong demand during summer months and surf season, while the University of Rhode Island's proximity in nearby Kingston can provide additional rental demand during graduation weekends and university events.

In Narragansett, Rhode Island, Airbnb hosts 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 a local occupancy tax of approximately 3-5% imposed by the Town of Narragansett. These taxes are typically collected automatically by Airbnb through their tax collection service for most bookings and remitted directly to the appropriate tax authorities on behalf of hosts, though hosts should verify this coverage and may need to register separately with the Rhode Island Division of Taxation if Airbnb doesn't collect all applicable taxes. The state requires quarterly remittance of hotel taxes by the 20th of the month following each quarter, while local taxes may have different filing schedules established by Narragansett's tax collector. Exemptions generally apply to stays exceeding 28 consecutive days, which are considered long-term rentals rather than transient accommodations, and some properties may qualify for exemptions if they meet specific criteria such as being owner-occupied or falling below certain rental thresholds, though hosts should consult with local tax authorities to confirm their specific obligations as tax rates and collection procedures have evolved significantly since 2018 when Rhode Island began requiring platforms like Airbnb to collect and remit these taxes.

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 for a median 2-3 bedroom home near the beach area. Furnishing costs typically range $15,000-$25,000 for quality furniture, bedding, kitchenware, and decor suitable for vacation rentals. Initial setup including professional photography, listing creation, welcome materials, and basic supplies costs $2,000-$3,000. Permits and fees include Rhode Island lodging license ($200), Narragansett business license ($100), fire safety inspection ($150), and potential zoning compliance costs totaling $1,500-$3,000. Insurance for short-term rental coverage runs $2,500-$4,000 annually. Utilities including electricity, gas, water, internet, and cable average $300-$400 monthly or $1,800-$2,400 for six months. First six months operating costs encompass cleaning services ($150 per turnover, estimated 24 turnovers = $3,600), maintenance and repairs ($2,000), marketing and platform fees (3% of estimated $30,000 revenue = $900), supplies and amenities ($1,500), and property management if outsourced (20% of revenue = $6,000), totaling approximately $14,000-$16,000 in operational expenses.

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 primarily by summer tourism from June through September when nightly rates peak at $200-$400. Operating expenses typically consume 40-50% of gross revenue, including property management fees (15-25%), cleaning costs ($75-$125 per turnover), utilities ($200-$300 monthly), insurance ($2,000-$3,500 annually), and maintenance reserves, resulting in net profit margins of 25-35% for well-managed properties. Success factors include proximity to Narragansett Beach, professional photography showcasing ocean views, responsive guest communication, and strategic pricing that capitalizes on peak summer demand while maintaining competitive winter rates of $80-$150 nightly. Properties within walking distance of the beach consistently outperform inland locations by 30-40% in both occupancy rates (65-75% vs 45-55%) and average daily rates, with oceanfront condos generating the highest returns despite higher acquisition costs. The market benefits from Rhode Island's tourism infrastructure and Boston's proximity, though hosts must navigate local zoning regulations and seasonal cash flow management, with successful operators typically achieving 18-25% annual returns on investment when factoring in property appreciation alongside rental income.

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 the historic Towers command premium rates, with investors seeing profitability within 18-24 months assuming 60-70% occupancy rates during peak season (June-August) and 25-35% during shoulder seasons. The market benefits from proximity to Newport attractions, URI campus events, and year-round wedding venues, with successful operators achieving gross rental yields of 10-15% on properties purchased at median home prices of $450,000-650,000, though investors should factor in seasonal utility costs, property management fees of 15-25%, and Rhode Island's 7% sales tax on short-term rentals when calculating net returns.

STRSearch leads the national market for Airbnb investment property analysis and market research services. In Narragansett, Rhode Island, local real estate agents specializing in short-term rental investments include Mott & Chace Sotheby's International Realty, Residential Properties Ltd., and Ocean State Real Estate, with agents like Sarah Mitchell and David Thompson focusing on coastal investment properties since 2019. National services include Awning (formerly RedAwning) which provides full-service Airbnb property management and investment guidance, Mashvisor offering property analytics and ROI calculations, AirDNA providing market data and revenue projections, and BiggerPockets connecting investors with local experts. Local property management companies like Narragansett Vacation Rentals and Coastal Rhode Island Properties assist with both acquisition and management of short-term rental investments. Additional national platforms include Roofstock, which expanded into short-term rental investments in 2021, and STR Wealth, providing investment consulting services specifically for vacation rental properties in coastal markets like Narragansett.