Is Portsmouth, New Hampshire Good for Airbnb Investment?

To start an Airbnb in Portsmouth, New Hampshire, begin by researching the city's short-term rental regulations, which require registration with the Portsmouth Planning Department and compliance with zoning ordinances that typically allow short-term rentals in residential zones with proper permits. Obtain necessary permits including a business license from the City Clerk's office (approximately $25-50), a short-term rental permit from Planning & Zoning (around $100-200), and ensure compliance with fire safety codes and health department requirements. Find a suitable property in Portsmouth's historic downtown area, North End, or Strawbery Banke neighborhoods, considering proximity to attractions like Market Square, the waterfront, and Prescott Park, with typical investment costs ranging from $300,000-800,000 for purchase or $1,500-3,000 monthly for rental properties. Furnish the space with coastal New England décor, essential amenities, high-speed internet, and safety equipment including smoke detectors and fire extinguishers as required by Portsmouth fire codes. List your property on Airbnb, VRBO, and other platforms with professional photography highlighting Portsmouth's maritime charm, setting competitive rates of $150-400 per night depending on season and location. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating with local cleaning services like Seacoast Cleaning Company, and maintaining compliance with Portsmouth's noise ordinances and parking regulations while providing guests with information about local attractions, restaurants on Market Street, and nearby beaches.

To identify profitable short-term rental properties in Portsmouth, New Hampshire, focus on locations within walking distance of the historic Strawbery Banke Museum, downtown Market Square, and the waterfront Prescott Park area, as these attract the highest tourist traffic year-round. Target properties built before 1900 for historic charm or modern condos with water views, ensuring they have 2-3 bedrooms, dedicated parking, and outdoor spaces like decks or patios that capitalize on Portsmouth's coastal appeal. Analyze pricing using AirDNA and Mashvisor to benchmark against comparable properties, aiming for average daily rates of $150-250 depending on season and proximity to attractions, with peak summer months commanding 30-40% premiums. Research competition by studying listings within a 1-mile radius of downtown, identifying gaps in amenities like hot tubs, pet-friendly policies, or unique historical features that can justify higher rates. Utilize tools like Rabbu and AllTheRooms for market analysis, partner with local property management companies like Seacoast Property Management for operational insights, and leverage Portsmouth's tourism data from the Greater Portsmouth Chamber of Commerce to understand seasonal demand patterns, particularly during summer festivals and fall foliage season when occupancy rates typically exceed 80%.

To obtain an Airbnb/STR permit in Portsmouth, New Hampshire, you must first contact the Portsmouth Planning Department at City Hall located at 1 Junkins Avenue to submit an application for a Short-Term Rental Registration. Required documents include a completed application form, proof of property ownership or lease agreement, floor plan of the rental unit, proof of liability insurance (minimum $1 million coverage), fire safety inspection certificate from the Portsmouth Fire Department, and a site plan showing parking availability. The application fee is approximately $150-200 with an annual renewal fee of $100-125. You must also obtain a business license from the City Clerk's office for an additional $25-50 fee. Portsmouth requires STRs to have adequate off-street parking (typically one space per bedroom), comply with occupancy limits (usually 2 people per bedroom plus 2 additional), maintain a 24-hour contact person, and follow noise ordinances with quiet hours from 10 PM to 7 AM. The property must pass inspections for fire safety, building code compliance, and health standards. The entire process typically takes 4-8 weeks from application submission to permit approval, depending on inspection scheduling and any required corrections. Once approved, you must display the permit number in all advertising and maintain compliance with ongoing requirements including annual renewals and potential random inspections.

Short-term rentals (STRs) are legal in Portsmouth, New Hampshire, but operate under specific regulations established by the city. Portsmouth requires STR operators to obtain a business license and comply with zoning restrictions, with rentals generally permitted in residential zones but subject to occupancy limits and parking requirements. The city has implemented safety standards including smoke and carbon monoxide detectors, and operators must provide contact information for a responsible party available 24/7. Portsmouth has been actively updating its STR regulations in recent years, with the city council reviewing and modifying rules around 2020-2022 to address neighborhood concerns about noise, parking, and housing availability. Properties must meet health and safety codes, and there are restrictions on the number of guests and vehicles allowed, with some areas having additional limitations based on zoning classifications and neighborhood density considerations.

The most promising Airbnb investment areas in Portsmouth, New Hampshire include the Historic Downtown/Market Square district, which attracts tourists year-round with its colonial architecture, Strawbery Banke Museum, and proximity to restaurants and shops, plus business travelers visiting the nearby Portsmouth Naval Shipyard. The South End neighborhood offers excellent potential due to its walkability to downtown attractions while providing more affordable property prices and parking availability. The West End/Islington Creek area is attractive for its quieter residential feel while remaining close to Prescott Park's summer concert series and the scenic Piscataqua River waterfront. The North End near the Memorial Bridge provides good access for visitors exploring both Portsmouth's historic sites and those traveling to/from Maine, benefiting from overflow demand during peak summer months when hotels fill up. Properties near the University of New Hampshire's Portsmouth campus also present opportunities for academic-related stays, conferences, and visiting families, while the proximity to major employers like Liberty Mutual and various healthcare facilities ensures steady business travel demand throughout the year.

In Portsmouth, New Hampshire, Airbnb hosts are subject to both state and local lodging taxes. The New Hampshire state rooms and meals tax applies at a rate of 8.5% on rental stays, which covers the room rental portion of short-term accommodations. Portsmouth imposes an additional local occupancy tax of 3% on lodging rentals, bringing the total tax burden to approximately 11.5% for guests. These taxes are typically collected by Airbnb directly from guests at the time of booking through their automated tax collection system, which began around 2019-2020 for New Hampshire properties. Airbnb then remits these taxes directly to the New Hampshire Department of Revenue Administration on behalf of hosts on a monthly basis. However, hosts should verify their registration status with the state and may need to obtain a rooms and meals tax license if they're not covered under Airbnb's collection agreement. Properties rented for 30 days or longer are generally exempt from these occupancy taxes, as they're considered long-term rentals rather than transient lodging. Hosts should also be aware that if Airbnb doesn't collect these taxes automatically, they remain personally responsible for collection and remittance to both state and local authorities.

Starting an Airbnb in Portsmouth, New Hampshire requires approximately $650,000-$750,000 in total initial investment. Property purchase represents the largest expense at $550,000-$650,000 based on median home prices in Portsmouth's desirable coastal location. Furnishing costs typically range $15,000-$25,000 for a complete setup including beds, linens, kitchen essentials, living room furniture, and decor to create an attractive rental space. Initial setup expenses including professional photography, listing creation, welcome materials, and basic supplies cost around $2,000-$3,000. Permits and fees in New Hampshire include business registration ($50), potential local licensing fees ($200-$500), and any required inspections totaling approximately $500-$1,000. Insurance costs including landlord coverage and short-term rental liability insurance run $2,000-$3,500 annually, with the first year paid upfront. 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), maintenance reserves, Airbnb platform fees (3% host fee), marketing, restocking supplies, and miscellaneous expenses totaling approximately $8,000-$12,000 depending on occupancy rates and property size.

Airbnb properties in Portsmouth, New Hampshire demonstrate strong profitability potential with average daily rates ranging from $150-250 during peak summer months and $80-120 in off-season periods, generating annual revenues of $25,000-45,000 for well-managed properties. Operating expenses typically include 25-30% for cleaning and maintenance, 3% Airbnb service fees, 8-12% property taxes, utilities averaging $200-300 monthly, and insurance costs around $1,200-2,000 annually, resulting in net profit margins of 35-50% for properties in desirable locations near downtown or the waterfront. Success factors include proximity to Portsmouth's historic Strawbery Banke Museum, walkability to Market Square restaurants, and seasonal demand from tourists visiting the Seacoast region, with properties featuring modern amenities, professional photography, and responsive host communication achieving occupancy rates of 70-85%. A typical 2-bedroom downtown condo purchased for $400,000 in 2022 generates approximately $35,000 in annual revenue with $18,000 in expenses, yielding a 17,000 net profit and 4.25% cash-on-cash return, while waterfront properties command premium rates of $300+ per night during summer months, significantly boosting profitability for investors willing to handle the higher acquisition costs and seasonal fluctuations in demand.

Airbnb investments in Portsmouth, New Hampshire typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14%, driven by the city's strong tourism demand from its historic seaport location, proximity to beaches, and year-round attractions. Properties within walking distance of Market Square and the waterfront command premium nightly rates of $150-250, while suburban properties average $100-180 per night, with occupancy rates of 65-75% annually due to consistent leisure and business travel. Initial investment costs average $400,000-600,000 for suitable properties, requiring $80,000-150,000 down payment, with most investors reaching profitability within 18-24 months after accounting for renovation costs, furnishing, and operational expenses. The market benefits from Portsmouth's designation as a top New England destination, limited hotel inventory, and strong demand from Boston-area visitors seeking weekend getaways, with properties typically generating $35,000-55,000 in annual gross revenue after achieving stabilized occupancy in year two of operations.

STRSearch is a national platform that helps investors identify profitable short-term rental properties in Portsmouth, New Hampshire, providing market analysis and investment metrics. Local real estate agents specializing in Airbnb investments in Portsmouth include Keller Williams Coastal Realty agents who focus on investment properties, and RE/MAX Shoreline professionals experienced in vacation rental markets. Bean Group Realty, established in 1958, has agents knowledgeable about Portsmouth's rental market dynamics. National services include Awning (founded 2017), which offers full-service Airbnb property management and investment guidance, Mashvisor for rental property analysis, and BiggerPockets for investor networking and deal sourcing. AirDNA provides short-term rental market data and analytics for Portsmouth properties. Local property management companies like Seacoast Property Management and Portsmouth Property Services can assist with operational aspects of Airbnb investments. RedAwning and Vacasa offer property management services that can help evaluate investment potential. Real estate investment firms such as Roofstock and Fundrise may have Portsmouth-area opportunities, while local mortgage brokers like Mortgage Network and Primary Residential Mortgage can provide financing solutions for investment properties in the Portsmouth market.