Is New London, Connecticut Good for Airbnb Investment?

To start an Airbnb in New London, Connecticut, begin by researching local zoning laws and regulations through the New London Planning and Zoning Department, as the city requires short-term rental operators to obtain a special permit and comply with specific occupancy limits, typically restricting rentals to no more than 30 days and requiring properties to be owner-occupied or have proper commercial zoning. Contact the New London Building Department to secure necessary permits including a Certificate of Occupancy for short-term rentals, fire safety inspections, and ensure compliance with Connecticut's lodging tax requirements by registering with the Department of Revenue Services. Find a suitable property in residential zones that allow short-term rentals, focusing on areas near Connecticut College, the waterfront district, or downtown New London where demand is higher, with average nightly rates ranging from $80-150 depending on location and amenities. Furnish the property with essential amenities including Wi-Fi, linens, kitchen supplies, and safety equipment like smoke detectors and fire extinguishers as required by Connecticut fire codes. Create your listing on Airbnb and other platforms like VRBO, highlighting proximity to attractions such as Mystic Seaport, Mohegan Sun, and the Thames River, while setting competitive pricing based on local market analysis. Manage your property by establishing check-in procedures, maintaining cleanliness standards, responding promptly to guests, and keeping detailed records for tax purposes, while staying current with New London's evolving short-term rental ordinances and annual permit renewals that typically cost between $200-500 depending on property size and classification.

To identify profitable short-term rental properties in New London, Connecticut, focus on locations within walking distance of Connecticut College, the Coast Guard Academy, and downtown's historic waterfront district near Fort Trumbull State Park and Ocean Beach Park, as these areas attract students, military families, and tourists year-round. Target 2-4 bedroom properties built after 1950 with parking, modern amenities, and water views when possible, as New London's maritime character and proximity to Mystic and Casinos drive demand for authentic coastal experiences. Analyze pricing by researching comparable Airbnb listings in the $80-150 nightly range, accounting for seasonal fluctuations with peak rates during summer months and Coast Guard Academy events, while calculating potential annual revenue against purchase prices typically ranging from $150,000-400,000 for suitable properties. Research competition using AirDNA and Mashvisor to assess occupancy rates and identify gaps in the market, particularly focusing on properties that cater to military relocations, college visits, and casino tourists from Mohegan Sun and Foxwoods. Utilize local resources including the New London Development Corporation for neighborhood insights, Zillow and Realtor.com for property searches, STR Helper for regulatory compliance with Connecticut's short-term rental laws, and connect with local property management companies familiar with the transient nature of the Coast Guard population to maximize occupancy and revenue potential.

To obtain an Airbnb/STR permit in New London, Connecticut, you must first contact the New London Planning and Zoning Department at City Hall located at 181 State Street to determine if short-term rentals are permitted in your specific zoning district, as the city requires special permits for STRs in most residential areas. Submit a special permit application along with a site plan showing the property layout, proof of property ownership or authorization from the owner, a detailed description of the proposed short-term rental operation, parking plans, and evidence of adequate septic and water systems. The application fee is approximately $500-750, and you'll need to pay additional fees for public hearing notices (around $200-300). Schedule a pre-application meeting with planning staff, then submit your complete application which will be reviewed by the Planning and Zoning Commission during a public hearing process. You must also obtain a business license from the City Clerk's office (approximately $50-100 annually), register with the Connecticut Department of Revenue Services for tax purposes, and ensure compliance with fire safety codes by contacting the New London Fire Marshal's office for inspection requirements. The entire process typically takes 60-90 days from application submission to permit approval, and you must maintain liability insurance, provide adequate off-street parking (typically one space per bedroom), limit occupancy to posted maximums, and ensure 24/7 contact availability for noise or emergency issues.

Short-term rentals (STRs) are legal in New London, Connecticut, but operate under specific municipal regulations that were updated around 2019-2020. The city requires STR operators to obtain a special permit and business license, with properties subject to health and safety inspections. New London restricts STRs in certain residential zones, particularly in historic districts and areas with high concentrations of rental properties, while generally allowing them in mixed-use and commercial zones. The city limits the number of guests and requires adequate parking, noise control measures, and compliance with fire safety codes. Properties must be owner-occupied or have a local contact person available 24/7, and there are restrictions on the total number of rental days per year. Recent changes have included stricter enforcement of existing regulations and enhanced penalties for violations, with the city responding to neighborhood concerns about noise, parking, and the impact on long-term housing availability in certain areas of the city.

The best areas for Airbnb investment in New London, Connecticut include the Historic Downtown District near the waterfront, which attracts tourists visiting the Custom House Maritime Museum and Fort Trumbull State Park, plus business travelers to nearby Electric Boat and Pfizer facilities. The Ocean Beach area offers strong summer rental potential due to its proximity to beaches and seasonal events, while the Connecticut College neighborhood provides consistent demand from visiting families, prospective students, and academic conference attendees year-round. The Fort Trumbull area is particularly attractive due to its historic significance, waterfront views, and proximity to the Coast Guard Academy which generates steady military family visits and official travel. The Whale Oil Row historic district appeals to cultural tourists and weekend visitors exploring New London's maritime heritage, while areas near Lawrence + Memorial Hospital capture medical tourism and visiting healthcare professionals.

In New London, Connecticut, Airbnb hosts are subject to Connecticut's state occupancy tax of 15% on stays of less than 30 consecutive days, which applies to all short-term rental accommodations including rooms, apartments, and houses rented through platforms like Airbnb. The tax is calculated on the total rental charge excluding cleaning fees and security deposits. Connecticut requires hosts to register for a Sales and Use Tax permit through the Department of Revenue Services and collect the tax directly from guests at the time of booking or payment. Hosts must remit the collected taxes monthly by the last day of the following month using Form OS-114, and maintain detailed records of all transactions. New London may also impose a local room occupancy tax of up to 5% in addition to the state tax, though this varies by municipality. Exemptions include stays of 30 days or longer, rentals to permanent residents, and accommodations provided to certain government employees or during declared emergencies. Airbnb automatically collects and remits these taxes on behalf of hosts in Connecticut as of 2019, simplifying compliance for most users of the platform.

To start an Airbnb in New London, Connecticut, the total initial investment would be approximately $285,000-$315,000. Property purchase costs around $200,000-$220,000 based on median home prices in the area as of 2023. Furnishing a 2-3 bedroom property completely would cost $15,000-$25,000 including furniture, appliances, linens, and decor. Initial setup expenses including professional photography, listing creation, and basic renovations total $3,000-$5,000. Permits and fees including business license, short-term rental permit, and tax registrations cost approximately $500-$1,000. Insurance for short-term rental coverage runs $2,000-$3,000 annually. Utilities setup and deposits for electricity, gas, water, internet, and cable cost around $1,500-$2,500. First six months operating costs including utilities ($1,800), cleaning supplies and services ($1,200), maintenance reserves ($1,500), marketing ($600), and property management software ($300) total approximately $5,400. Additional working capital of $5,000-$10,000 is recommended for unexpected expenses and vacancy periods during the initial launch phase.

Airbnb properties in New London, Connecticut typically generate annual revenues between $15,000-$35,000 for entire home listings, with average daily rates ranging from $85-$150 depending on proximity to Connecticut College, the Coast Guard Academy, and downtown attractions. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($50-$75 per turnover), property management (10-20% of revenue), utilities ($150-$300 monthly), insurance ($800-$1,500 annually), and maintenance costs averaging $2,000-$4,000 yearly. Properties within walking distance of Connecticut College or near the historic downtown waterfront achieve higher occupancy rates of 60-75% annually, while suburban locations typically see 45-60% occupancy. A typical 3-bedroom Victorian home near Whale Oil Row generating $28,000 annually might incur $16,000 in expenses, yielding a 43% profit margin or roughly $12,000 net income. Success factors include strategic pricing during college events and Coast Guard Academy graduations, professional photography highlighting New London's maritime character, and maintaining properties that appeal to both business travelers visiting Electric Boat and leisure guests exploring Mystic Seaport area attractions. Properties purchased below $200,000 and generating consistent $20,000+ annual profits demonstrate the strongest ROI potential in this market, particularly those offering parking and modern amenities while preserving historic charm.

Airbnb investments in New London, Connecticut typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% based on current market conditions. Properties near Connecticut College, the downtown waterfront district, and historic areas command premium nightly rates of $120-180, while standard residential properties average $80-120 per night with 65-75% occupancy rates during peak summer months and 45-55% in winter. Initial investment costs average $200,000-350,000 for suitable properties, with renovation budgets of $15,000-30,000 to meet short-term rental standards. Most investors achieve profitability within 18-24 months, factoring in Connecticut's 12% room occupancy tax, local permit fees of approximately $500 annually, and property management costs of 15-25% if outsourced. The market benefits from proximity to Mohegan Sun, Foxwoods Resort Casino, and seasonal tourism along the Thames River, though investors should expect seasonal fluctuations with summer months generating 40-50% of annual revenue and shoulder seasons requiring strategic pricing to maintain competitive occupancy rates.

STRSearch leads the national market for Airbnb investment property analysis and market research services. In New London, Connecticut, local real estate agents specializing in short-term rental investments include Coldwell Banker Realty agents who focus on waterfront and downtown properties, William Raveis Real Estate agents with vacation rental expertise, and RE/MAX agents specializing in investment properties near the Connecticut College area and historic district. National services include Mashvisor for property analysis and market data, AirDNA for short-term rental market insights, Awning for full-service Airbnb investment management, RedAwning for vacation rental property sourcing, and Vacasa for property management services. Local property management companies like Mystic Area Property Management and Connecticut Shoreline Rentals also assist investors in identifying profitable properties. Real estate investment firms such as Roofstock and Fundrise have expanded into the Connecticut market, while local mortgage brokers like Liberty Bank and Dime Bank offer specialized financing for investment properties in the New London area, particularly targeting properties near the Naval Submarine Base, Connecticut College, and the downtown revitalization zone.