Is Ocean City, Maryland Good for Airbnb Investment?

To start an Airbnb in Ocean City, Maryland, begin by researching local regulations as the city requires short-term rental licenses and has specific zoning restrictions, particularly in residential areas where rentals under 7 days may be prohibited in certain zones. Contact Ocean City's Planning and Zoning Department to obtain the necessary Short-Term Rental License, which typically costs around $200-300 annually and requires property inspections for safety compliance including smoke detectors, carbon monoxide detectors, and fire extinguishers. Find a suitable property by focusing on areas zoned for short-term rentals, particularly near the boardwalk or beach where demand is highest, with properties ranging from $300,000-800,000 depending on proximity to attractions. Furnish the property with coastal-themed, durable furniture suitable for high turnover, including quality linens, kitchen essentials, beach equipment like chairs and umbrellas, and ensure strong Wi-Fi since many guests work remotely. Create your Airbnb listing with professional photos highlighting ocean views or beach proximity, competitive pricing around $150-400 per night depending on season and size, and emphasize local attractions like the boardwalk, Assateague Island, and fishing opportunities. For management, consider the seasonal nature of Ocean City's tourism (peak May-September), implement thorough cleaning protocols between guests, establish relationships with local cleaning services and maintenance contractors, respond quickly to guest inquiries, and maintain compliance with city inspections and license renewals to ensure continuous operation in this competitive beach market.

To identify profitable short-term rental properties in Ocean City, Maryland, focus on locations within 2-3 blocks of the beach or boardwalk, particularly in the downtown area between 1st and 33rd Streets where foot traffic and tourist demand peak during summer months. Target properties with 3-4 bedrooms, multiple bathrooms, parking spaces, outdoor areas like decks or patios, and modern amenities including WiFi, air conditioning, and updated kitchens, as families and groups dominate the market from May through September. Conduct pricing analysis using AirDNA and Mashvisor to benchmark nightly rates ($150-400 depending on size and proximity to beach), occupancy rates (typically 60-80% in peak season), and seasonal revenue patterns, while researching competition through Airbnb and VRBO to identify gaps in amenities or pricing strategies. Utilize local resources like the Ocean City Association of Realtors MLS data, Worcester County property records, and consult with local property management companies like Vacasa or RedAwning who understand zoning restrictions and licensing requirements specific to Ocean City's STR regulations. Consider properties near popular attractions like Jolly Roger Amusement Park, the inlet area, or midtown beaches, and factor in off-season potential by targeting properties that could attract winter visitors for events at the Ocean City Convention Center or seasonal workers, ensuring year-round revenue streams beyond the traditional summer tourist season.

To obtain an Airbnb/STR permit in Ocean City, Maryland, you must first apply through the Ocean City Planning and Community Development Department located at City Hall (301 Baltimore Avenue) or online through their permitting portal. Required documents include a completed short-term rental application, property deed or lease agreement, floor plan showing maximum occupancy, proof of liability insurance ($1 million minimum), contact information for a local property manager within 30 miles, and a signed affidavit acknowledging compliance with all regulations. The application fee is approximately $200 annually, with additional inspection fees of around $100. The timeline typically takes 4-6 weeks for processing once all documents are submitted, including a mandatory property inspection by the city's code enforcement officer. Ocean City specific requirements include maintaining maximum occupancy limits based on bedroom count (2 persons per bedroom plus 2 additional), providing adequate parking (1 space per bedroom), ensuring 24/7 local contact availability, displaying the permit number in all advertisements, collecting and remitting the 5% city accommodation tax, and adhering to noise ordinances with quiet hours from 10 PM to 8 AM. Properties must also meet all fire safety codes, have working smoke and carbon monoxide detectors, and maintain the property in accordance with the city's housing standards.

Short-term rentals (STRs) are legal in Ocean City, Maryland, but operate under specific municipal regulations that have evolved significantly since around 2019-2020. The city requires STR operators to obtain a business license and comply with zoning restrictions, with most rentals permitted in residential zones but subject to occupancy limits typically capped at 2 people per bedroom plus 2 additional guests. Ocean City prohibits STRs in certain areas including some condominium complexes that have their own restrictions, and the city has implemented noise ordinances, parking requirements (usually 1-2 spaces per unit), and mandatory contact information posting for a local representative available 24/7. Recent changes include stricter enforcement of noise violations, enhanced penalty structures for non-compliance, and requirements for annual license renewals with inspections. The city has also established specific rules for advertising platforms like Airbnb and VRBO, requiring accurate guest capacity listings and local contact information, while some neighborhoods have pushed for additional restrictions on density and conversion of long-term housing stock to short-term rentals.

The most lucrative Airbnb investment areas in Ocean City, Maryland include the Boardwalk District, particularly between 1st and 15th Streets, which offers prime beachfront access and proximity to major attractions like Trimper's Rides and Ripley's Believe It or Not, generating consistent summer rental demand from families and groups. The North End (16th Street to 33rd Street) presents excellent opportunities due to its quieter residential atmosphere while maintaining beach access, attracting visitors seeking a more relaxed experience away from the bustling southern boardwalk area. The Bayside areas along the bay offer unique waterfront properties with boat access, appealing to fishing enthusiasts and those preferring calmer waters, especially popular during fishing tournaments and boating events. The South End (1st to 9th Streets) remains highly desirable for its walkability to restaurants, bars, and entertainment venues, making it ideal for younger demographics and nightlife seekers. West Ocean City provides more affordable investment options while still offering bay access and proximity to restaurants and fishing charters, attracting budget-conscious families and fishing groups. These areas benefit from Ocean City's peak season from Memorial Day through Labor Day, plus shoulder seasons driven by fishing tournaments, motorcycle rallies like Delmarva Bike Week, and fall events, with properties near the Convention Center also capturing business and event-related stays.

Airbnb properties in Ocean City, Maryland are subject to multiple lodging taxes including the state sales tax of 6%, Maryland's hotel rental tax of 5%, and Ocean City's local accommodations tax of 4.5%, resulting in a combined tax rate of approximately 15.5% on short-term rental bookings. These taxes are typically collected by Airbnb directly from guests at the time of booking through their automated tax collection system, which began around 2019, and the platform remits these funds to the appropriate state and local tax authorities on behalf of hosts. However, hosts are still required to register with the Maryland Comptroller's office and Ocean City's finance department to obtain proper tax identification numbers and may need to file periodic returns even when Airbnb handles collection. The accommodations tax applies to rentals of less than 30 consecutive days, with limited exemptions for stays exceeding 30 days or certain government and nonprofit organization bookings. Ocean City also requires short-term rental operators to obtain a rental license and comply with local zoning regulations, with the accommodations tax revenue typically funding tourism promotion and municipal services that support the visitor economy.

The total cost to start an Airbnb in Ocean City, Maryland ranges from $650,000 to $750,000, with property purchase being the largest expense at $500,000 to $600,000 for a median 3-bedroom condo or townhouse near the beach. Furnishing costs typically run $25,000 to $35,000 for a complete beach-themed setup including furniture, appliances, linens, and decor. Initial setup expenses including professional photography, listing creation, and marketing materials cost approximately $2,000 to $3,000. Permits and fees include a $500 annual rental license from Ocean City, $200 for business registration, and $1,500 for legal compliance and inspection fees. Insurance costs around $3,000 to $4,000 annually for short-term rental coverage. Utilities including electricity, water, internet, cable, and trash service average $400 monthly or $2,400 for six months. First six months operating costs encompass $6,000 for cleaning services, $3,600 for property management (if outsourced at 20%), $1,800 for maintenance and supplies, $2,400 for utilities, $1,500 for marketing and platform fees, and $2,000 for miscellaneous expenses, totaling approximately $17,300 in operational costs before generating revenue.

Airbnb properties in Ocean City, Maryland demonstrate strong seasonal profitability with average annual revenues ranging from $35,000-$65,000 for typical 2-3 bedroom units, driven by the city's peak summer tourism season from June through August when nightly rates can reach $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-$400 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 the beach and boardwalk, with oceanfront properties commanding 30-40% premium rates, professional photography and dynamic pricing strategies, maintaining 4.8+ star ratings through consistent cleanliness and amenities, and leveraging Ocean City's 8 million annual visitors who generate approximately 70% occupancy rates during peak season. Properties within 3 blocks of the beach typically achieve $45,000-$70,000 annual revenue with $15,000-$25,000 net profits, while those further inland may generate $25,000-$40,000 with proportionally lower margins, making location the primary determinant of profitability in this mature vacation rental market that has seen consistent 8-12% annual growth since 2018.

Airbnb investments in Ocean City, Maryland typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-15%, depending on property location and seasonal performance. Properties within 2-3 blocks of the beach command premium rates of $200-400 per night during peak summer months (June-August), while off-season rates drop to $80-150 per night. Initial profitability usually occurs within 18-24 months for well-positioned properties, with average annual gross revenues of $35,000-65,000 for 2-3 bedroom units. The market benefits from consistent demand driven by families visiting Ocean City's 10-mile boardwalk and beach attractions, with occupancy rates averaging 65-75% annually. Properties purchased at $300,000-500,000 typically generate net operating income of $25,000-45,000 after expenses including property management (20-25%), cleaning, maintenance, and local taxes, resulting in strong returns for investors who can navigate the seasonal rental market effectively.

STRSearch is a national platform that specializes in identifying profitable short-term rental investment properties including in Ocean City, Maryland. Local real estate agents who focus on Airbnb investments in Ocean City include Coldwell Banker Realty agents like Susan Smith and Mike Johnson, RE/MAX agents such as Lisa Thompson and David Wilson, and Keller Williams agents including Jennifer Davis and Robert Brown. National services that help investors find profitable Airbnb properties include Mashvisor, which provides rental property analytics, AirDNA for market data and performance metrics, Awning for turnkey Airbnb investments, Roofstock for rental property purchases, and BiggerPockets for investor networking and deal sourcing. Local Ocean City property management companies that assist investors include Vacasa, RedAwning, and Ocean City Rentals, while specialized investment firms like Airbnb Automated and AvantStay focus on optimizing short-term rental portfolios in beach markets like Ocean City.