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 30 days may be prohibited in certain zones. Contact Ocean City's Planning and Zoning Department to obtain the necessary short-term rental permit, which typically costs around $200-400 annually and requires property inspections for safety compliance. Find a suitable property by focusing on areas zoned for transient accommodations, such as commercial districts or specific residential zones that allow short-term rentals, with properties near the boardwalk or beach commanding premium rates of $150-400 per night during peak summer season. Furnish the property with coastal-themed decor, essential amenities like linens, kitchen supplies, WiFi, air conditioning, and beach equipment such as chairs and umbrellas, budgeting approximately $10,000-25,000 for a complete setup. List your property on Airbnb and other platforms like VRBO, highlighting proximity to Ocean City's attractions including the boardwalk, Assateague Island, and local restaurants, with professional photography showcasing ocean views if available. Manage the property by establishing relationships with local cleaning services charging $75-150 per turnover, maintenance contractors familiar with coastal property challenges like salt air corrosion, and consider hiring a property management company charging 15-25% of revenue if you're not local, while maintaining compliance with Ocean City's noise ordinances and parking requirements that are strictly enforced during the busy summer tourist season from May through September.

To identify profitable short-term rental properties in Ocean City, Maryland, focus on locations within 3-4 blocks of the beach or boardwalk, particularly in areas like downtown Ocean City, midtown around 50th-75th streets, and north Ocean City near Northside Park, as these command premium nightly rates of $200-400 during peak summer season. Target 3-4 bedroom condos or single-family homes with 2+ bathrooms, parking spaces, and amenities like pools, hot tubs, or beach access, as families and groups are the primary market driving 70-80% occupancy rates from May through September. Analyze comparable properties on Airbnb and VRBO to ensure your potential investment can achieve $150-300 per night depending on size and location, with annual gross revenues of $40,000-80,000 for well-positioned properties. Research competition density using AirDNA or Mashvisor to identify undersaturated pockets, particularly focusing on properties that can accommodate 8-12 guests which are in high demand but limited supply. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through Ocean City real estate agents, while monitoring Worcester County property records and tax assessments to identify undervalued properties, keeping in mind that Ocean City has specific STR licensing requirements and seasonal parking restrictions that impact profitability.

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). 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 $100 application fee plus $50 annual renewal fee. The process typically takes 4-6 weeks for approval and includes a mandatory inspection by the city's Code Enforcement Division. Ocean City specific requirements include limiting occupancy to 2 people per bedroom plus 2 additional guests, maintaining off-street parking for each rental unit, ensuring 24/7 local contact availability, displaying the permit number in all advertisements, and adhering to quiet hours from 10 PM to 8 AM with no outdoor amplified music after 10 PM. Properties must also comply with fire safety codes including smoke detectors in each bedroom and common area, carbon monoxide detectors, and fire extinguishers on each floor. The permit is valid for one year and must be renewed annually by December 31st with the city conducting periodic compliance inspections throughout the year.

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 and commercial zones but with limitations on the number of occupants and parking requirements. Ocean City has implemented noise ordinances, trash collection protocols, and safety requirements including smoke detectors and emergency contact information for all rental properties. Recent changes include stricter enforcement of occupancy limits (typically 2 people per bedroom plus 2 additional), mandatory registration with the city, and enhanced penalties for violations including potential license revocation. The city has also established quiet hours and requires property managers to be available 24/7 for complaint resolution, reflecting the balance between supporting the tourism economy that drives Ocean City's revenue and addressing resident concerns about noise, parking, and neighborhood character in this popular Atlantic coast resort destination.

The best Airbnb investment areas in Ocean City, Maryland are the Boardwalk District, particularly between 1st and 15th Streets, which offers prime beachfront access and proximity to major attractions like Trimper's Rides and the Ocean City Pier, generating consistent summer tourism revenue from May through September. The Midtown area around 40th to 60th Streets provides excellent value with newer condominiums and easier parking while still maintaining beach access, attracting families seeking quieter accommodations. The Northside neighborhoods from 90th to 146th Streets offer larger properties ideal for group rentals and wedding parties, benefiting from events at venues like Seacrets and the Ocean City Convention Center. The Bayside areas along the bay provide unique waterfront experiences with boat access, appealing to fishing enthusiasts and those seeking sunset views, while the downtown area near 2nd Street captures both nightlife seekers visiting venues like Fager's Island and business travelers attending conventions, with shoulder season potential from spring and fall fishing tournaments and motorcycle events like Delmarva Bike Week.

Airbnb properties in Ocean City, Maryland are subject to multiple lodging taxes including the state hotel rental tax of 9%, Worcester County accommodations tax of 5%, and Ocean City's local lodging tax of 4.5%, totaling approximately 18.5% in combined taxes on short-term rental stays. The Maryland hotel rental tax applies to rentals of less than 30 consecutive days and is collected by the host and remitted monthly to the Comptroller of Maryland if gross receipts exceed $500 annually. Worcester County's accommodations tax is collected similarly and remitted quarterly to the county, while Ocean City's lodging tax is administered through the city's finance department with monthly remittance required for properties generating over $1,000 in annual rental income. Airbnb may collect and remit some of these taxes directly on behalf of hosts through their platform, particularly the state tax, but hosts remain responsible for ensuring compliance with all local tax obligations. Exemptions typically include rentals to permanent residents lasting 30 days or more, government employees on official business, and certain charitable organizations, though documentation is required to qualify for these exemptions.

The total cost to start an Airbnb in Ocean City, Maryland is approximately $650,000-$750,000. Property purchase represents the largest expense at $500,000-$600,000 for a median-priced condo or small house near the beach, with oceanfront properties commanding higher prices. Furnishing costs range from $25,000-$35,000 for a complete setup including beds, linens, kitchen appliances, furniture, and beach-themed decor suitable for vacation rentals. Initial setup costs including professional photography, listing creation, and marketing materials total around $2,000-$3,000. Permits and fees include a $500 annual rental license from Worcester County, $200 for business registration, and approximately $1,500 for various inspections and compliance requirements. Insurance costs $3,000-$4,000 annually for short-term rental coverage that protects against guest damages and liability. Utilities including electricity, water, internet, cable, and trash service average $400-$600 monthly or $2,400-$3,600 for six months. First six months operating costs encompass cleaning services at $100 per turnover (estimated 40 turnovers = $4,000), maintenance and repairs ($2,000), restocking supplies ($1,500), Airbnb platform fees averaging 15% of bookings (estimated $8,000 on $53,000 revenue), property management if outsourced ($8,000), and marketing expenses ($1,000), totaling approximately $24,500 in operational expenses.

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 boardwalk and beach (properties within 3 blocks command 20-30% premium rates), professional photography and listing optimization, responsive guest communication, and strategic pricing that captures peak weekend and holiday demand while maintaining competitive off-season rates. Properties like oceanfront condos in high-rise buildings such as those along Coastal Highway have reported annual profits of $20,000-$30,000, while single-family homes near the inlet area achieve similar returns through higher capacity bookings, though success heavily depends on effective marketing, maintaining high guest ratings above 4.7 stars, and navigating Ocean City's short-term rental regulations which require proper licensing and adherence to occupancy limits.

Airbnb investments in Ocean City, Maryland typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-15%, driven by the city's strong summer tourism season from Memorial Day through Labor Day when nightly rates average $200-400 for oceanfront properties and $120-250 for properties within walking distance of the beach. Properties generally reach profitability within 18-24 months, with peak earning potential during July and August when occupancy rates exceed 85% and daily rates can reach $500+ for premium beachfront units. The market benefits from consistent demand from Philadelphia, Baltimore, and Washington D.C. metro areas, with shoulder seasons (May and September) still generating 60-70% occupancy at reduced rates, while winter months typically see 20-30% occupancy primarily from weekend visitors, resulting in annual gross rental yields of 15-22% for well-positioned properties before expenses.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for Airbnb investors in Ocean City, Maryland. Local real estate agents like Coldwell Banker Realty, Long & Foster Real Estate, and Berkshire Hathaway HomeServices PenFed Realty have extensive experience with Ocean City's vacation rental market and can help identify properties with strong rental potential. National services include Mashvisor, which provides Airbnb analytics and investment property data, AirDNA for market analysis and revenue projections, and BiggerPockets for investor networking and deal sourcing. Regional companies like Vacasa and RedAwning offer property management services that can help investors maximize their returns. Local property management firms such as Dunes Manor Hotel & Suites Property Management and Ocean City Real Estate Group provide specialized knowledge of local regulations and seasonal rental patterns. Additional services include STR Helper for compliance assistance, HostGPO for bulk purchasing discounts on furnishings, and Awning for short-term rental loans specifically designed for Airbnb investors looking to purchase properties in Ocean City's competitive beachfront market.