Is Scarborough, Maine Good for Airbnb Investment?

To start an Airbnb in Scarborough, Maine, begin by researching local zoning laws and regulations through the Scarborough Planning Department, as the town requires short-term rental properties to comply with residential zoning ordinances and may require a conditional use permit in certain districts. Contact the Town Clerk's office at 207-730-4037 to obtain necessary business licenses and ensure compliance with the town's lodging establishment requirements, which typically include annual registration fees around $100-200. Find a suitable property by working with local real estate agents familiar with Scarborough's coastal and inland neighborhoods, focusing on areas near Scarborough Beach, Pine Point, or downtown that attract tourists, with property prices ranging from $300,000-800,000 depending on location and proximity to the ocean. Furnish the property with coastal Maine-themed decor, essential amenities like Wi-Fi, linens, kitchen supplies, and safety equipment including smoke detectors and carbon monoxide alarms as required by Maine state law. Create your Airbnb listing with professional photos highlighting nearby attractions like Scarborough Beach State Park, Eastern Trail, and proximity to Portland (just 15 minutes away), setting competitive rates between $150-400 per night depending on season and property size. Manage your property by establishing relationships with local cleaning services, maintenance contractors, and consider hiring a property management company like Vacasa or RedAwning if you live out of state, while maintaining compliance with Maine's 9% lodging tax and Scarborough's local tax requirements.

To identify profitable STR properties in Scarborough, Maine, focus on locations within 1-2 miles of Scarborough Beach, Pine Point Beach, and Eastern Beach, as these coastal areas drive the highest rental demand from May through October. Target 3-4 bedroom single-family homes or condos built after 1980 with modern amenities, parking for 2+ vehicles, outdoor spaces like decks or patios, and updated kitchens and bathrooms, as these features command premium rates of $200-400 per night during peak season. Analyze pricing using AirDNA and Mashvisor to benchmark against comparable properties, aiming for properties that can achieve 60-70% occupancy rates with average daily rates of $180-250 in shoulder seasons and $300-450 during summer months. Research competition by monitoring active Airbnb and VRBO listings within a 2-mile radius, identifying gaps in amenities or pricing strategies, and noting that properties closer to Old Orchard Beach may face more competition but also higher demand. Utilize tools like Rabbu, AllTheRooms, and local MLS data through Maine real estate platforms, while consulting Scarborough's zoning ordinances and STR registration requirements, and consider properties in residential zones that allow short-term rentals with proper permitting, typically requiring investments of $400,000-800,000 for profitable beachside properties that can generate $40,000-80,000 in annual rental income.

To obtain an Airbnb/STR permit in Scarborough, Maine, you must first contact the Scarborough Planning Department at Town Hall located at 259 US Route 1 to determine if your property is in a zone that allows short-term rentals, as they are typically permitted in certain residential districts with restrictions. Submit an application for a Conditional Use Permit which requires a completed application form, site plan showing the property layout, proof of property ownership or authorization letter, floor plans indicating the rental areas, parking plan demonstrating adequate off-street parking (typically 2 spaces per unit), septic system compliance certificate if applicable, and a narrative describing the proposed operation including maximum occupancy and management plan. The application fee is approximately $500-800 depending on the complexity of the review, and you may need to pay additional fees for public hearings if required. You must also register with the Maine Revenue Service for lodging tax purposes and obtain a business license from the Town Clerk's office for an additional $25-50 fee. The review process typically takes 60-90 days and includes a Planning Board review, potential site visit, and public hearing if deemed necessary. Scarborough requires STR operators to maintain liability insurance, provide 24/7 contact information to neighbors, limit occupancy to 2 people per bedroom plus 2 additional guests, ensure adequate parking, and comply with noise ordinances and waste management requirements. Once approved, permits are typically valid for one year and must be renewed annually with proof of continued compliance and updated insurance documentation.

Short-term rentals (STRs) are legal in Scarborough, Maine, but operate under specific regulations established by the town. As of 2023, Scarborough requires STR operators to obtain a business license and comply with life safety codes, including smoke and carbon monoxide detectors. The town limits STRs to owner-occupied properties or properties where the owner lives within Scarborough, and restricts them in certain residential zones to preserve neighborhood character. Properties must meet parking requirements, maintain quiet hours between 10 PM and 7 AM, and limit occupancy based on bedroom count. Recent changes around 2022-2023 included stricter enforcement mechanisms and clearer definitions of what constitutes a short-term rental versus traditional lodging. The town has been responsive to resident concerns about impacts on housing availability and neighborhood disruption, leading to these moderate regulatory approaches rather than outright bans seen in some other Maine communities.

The most promising Airbnb investment areas in Scarborough, Maine include the Pine Point Beach neighborhood, which attracts summer tourists seeking oceanfront accommodations and beach activities from June through September, generating strong seasonal rental demand. The Prouts Neck area offers upscale vacation rental opportunities due to its exclusive coastal location, proximity to the Cliff Walk, and association with Winslow Homer's former studio, appealing to affluent tourists and art enthusiasts. The Higgins Beach district provides excellent investment potential with its family-friendly beach atmosphere, nearby Spurwink Country Club, and consistent demand from Portland-area visitors seeking a quieter coastal alternative just 15 minutes from the city. The Scarborough Downs area near the racetrack offers opportunities for event-based rentals during racing seasons and benefits from proximity to both beaches and Portland International Jetport, attracting business travelers and racing enthusiasts. Finally, properties near the Eastern Trail and Scarborough Beach State Park capitalize on outdoor recreation tourism, including hiking, biking, and beach activities, while maintaining year-round appeal due to the area's natural beauty and accessibility to both Portland's urban amenities and Maine's coastal attractions.

In Scarborough, Maine, Airbnb hosts are subject to Maine's 9% lodging tax on short-term rentals under 28 days, which applies to the total rental amount including cleaning fees. The state requires hosts to register for a lodging license through Maine Revenue Services and collect the tax from guests at the time of booking or payment. Hosts must remit collected taxes quarterly using Form ST-3R, with payments due by the last day of the month following each quarter (April 30, July 31, October 31, and January 31). Additionally, Scarborough may impose a local lodging tax of approximately 1-3% depending on municipal ordinances, which would be collected similarly and remitted to the town. Exemptions typically include rentals to permanent residents (over 28 consecutive days), rentals to employees of the host's business, and certain nonprofit organization bookings. Airbnb may collect and remit these taxes automatically for hosts in Maine through their platform's tax collection service, but hosts remain ultimately responsible for compliance and should verify that all applicable state and local taxes are being properly collected and remitted.

Starting an Airbnb in Scarborough, Maine requires approximately $650,000-$750,000 in total initial investment. Property purchase costs average $550,000-$650,000 based on median home prices in the area as of 2023-2024. Furnishing a 2-3 bedroom property typically costs $15,000-$25,000 including beds, linens, kitchen essentials, living room furniture, and décor. Initial setup expenses including professional photography, listing creation, and basic renovations run $3,000-$5,000. Permits and fees in Scarborough include short-term rental registration ($200-$500), business license ($50-$150), and potential zoning compliance costs ($500-$1,500). Insurance for short-term rentals costs $2,000-$3,500 annually, with many hosts requiring specialized STR coverage through companies like Proper Insurance or CBIZ. Monthly utilities including electricity, water, internet, cable, and heating average $300-$500 per month ($1,800-$3,000 for six months). First six months operating costs including cleaning services ($100-$150 per turnover), supplies and maintenance ($200-$400 monthly), property management software like Airbnb or VRBO fees (3% of bookings), and marketing expenses total approximately $8,000-$12,000, assuming 60-70% occupancy rates typical for Maine coastal properties.

Airbnb properties in Scarborough, Maine demonstrate strong seasonal profitability with average daily rates ranging from $150-300 during peak summer months (June-September) and dropping to $80-120 in off-season periods. A typical 3-bedroom coastal property generates approximately $35,000-55,000 in annual gross revenue, with operating expenses including cleaning fees ($75-100 per turnover), property management (15-25% of revenue), utilities ($200-400 monthly), insurance ($2,000-3,500 annually), and maintenance costs averaging 10-15% of gross revenue. Net profit margins typically range from 25-40% for well-managed properties, with oceanfront or beach-adjacent listings commanding premium rates and achieving occupancy rates of 70-85% during summer months. Success factors include proximity to Old Orchard Beach (within 10 miles), professional photography showcasing coastal amenities, responsive guest communication, and strategic pricing that captures both Portland metro area visitors and vacation travelers. Properties near Scarborough Beach or with water views consistently outperform inland locations by 30-50% in revenue generation, while those offering amenities like hot tubs, fire pits, or beach equipment see booking rates increase by 15-25% compared to basic accommodations.

Airbnb investments in Scarborough, Maine typically generate annual ROI of 12-18% due to the town's proximity to Portland and popular beaches like Scarborough Beach and Old Orchard Beach. Cash-on-cash returns generally range from 8-14% annually, with properties near the coastline achieving higher returns during peak summer months from June through September when nightly rates can reach $200-350. Investment properties in Scarborough usually achieve profitability within 18-24 months, with oceanfront or beach-adjacent properties recovering initial investments faster due to premium pricing capabilities. The market benefits from year-round demand driven by business travelers to nearby Portland, seasonal tourists, and weekend visitors from Boston and New York metropolitan areas. Properties requiring minimal renovation typically see break-even points around 20-22 months, while those needing significant updates may extend profitability timelines to 30-36 months but often command higher nightly rates once completed.

STRSearch is a national platform that helps investors identify profitable short-term rental properties including in Scarborough, Maine. Local real estate agents specializing in Airbnb investment properties in the Scarborough area include Keller Williams Realty agents who focus on vacation rentals, Coldwell Banker Residential Brokerage agents with short-term rental expertise, and RE/MAX By The Bay agents familiar with coastal investment properties. National services include Awning (formerly RedAwning) which provides Airbnb property management and investment analysis, AirDNA for market data and revenue projections, Mashvisor for rental property analytics, and BiggerPockets for investor networking and deal sourcing. Local property management companies that assist investors include Vacasa, which operates in Maine coastal areas, and several boutique vacation rental management firms serving the greater Portland-Scarborough region. Additional resources include local mortgage brokers specializing in investment properties such as First National Bank of Maine and Bar Harbor Bank & Trust, along with attorneys familiar with Maine short-term rental regulations and zoning requirements in Scarborough's residential and commercial districts.