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 restrictions and may require a conditional use permit in certain districts. Contact the Town of Scarborough's Code Enforcement Office at 207-730-4040 to obtain necessary permits, including a business license and potentially a lodging license, while ensuring compliance with fire safety codes and occupancy limits. 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 Prouts Neck that attract tourists, with typical property prices ranging from $400,000-$800,000 for vacation-suitable homes. Furnish the property with coastal Maine-themed decor, essential amenities like WiFi, air conditioning, and beach equipment, budgeting approximately $15,000-$25,000 for a complete furnishing package. List your property on Airbnb, VRBO, and other platforms with professional photography highlighting ocean views or proximity to beaches, setting competitive rates of $150-$400 per night depending on size and location. Manage the property by establishing cleaning protocols between guests, coordinating with local cleaning services like those found through Scarborough Chamber of Commerce, implementing keyless entry systems, and maintaining responsive communication with guests while monitoring local tourism patterns that peak during summer months from June through September.

To identify profitable short-term rental properties in Scarborough, Maine, focus on locations within 1-2 miles of Scarborough Beach, Pine Point Beach, and Old Orchard Beach borders, as these areas command premium rates during summer months (June-September) when properties can earn $200-400 per night. Target 3-4 bedroom single-family homes or condos built after 1980 with parking for 2+ vehicles, outdoor space, and modern amenities like updated kitchens and WiFi, as families and groups comprise the primary market. Analyze comparable properties on Airbnb and VRBO to establish competitive pricing, noting that beachfront properties average $250-350/night while inland properties earn $150-250/night during peak season. Research competition by monitoring occupancy rates and reviews of similar properties within a 2-mile radius, identifying gaps in amenities or service quality. Utilize AirDNA for market analytics, STR Helper for revenue projections, and local resources like the Scarborough Economic Development Corporation for zoning regulations and permit requirements, while partnering with local property management companies like Vacasa or RedAwning who understand seasonal demand patterns and can optimize pricing strategies for the distinct shoulder seasons when rates drop 40-60% but can still maintain profitability through extended stays and business travelers.

To obtain an Airbnb/STR permit in Scarborough, Maine, you must apply through the Scarborough Planning Department located at 259 US Route 1, Scarborough, ME 04074, by submitting a Short-Term Rental Registration application along with required documents including a completed application form, proof of property ownership or lease agreement, floor plan of the rental unit, proof of liability insurance (minimum $300,000), contact information for a local representative if you're an absentee owner, and a $100 annual registration fee. The application process typically takes 30-45 days for review and approval, during which the Planning Department will conduct a site inspection to ensure compliance with safety codes, parking requirements (minimum 2 spaces), and occupancy limits (maximum 2 people per bedroom plus 2 additional). Scarborough requires that all STRs maintain a guest registry, display the registration number in all advertisements, limit occupancy to no more than 10 people, restrict quiet hours from 9 PM to 8 AM, and ensure the property meets all building, fire, and health codes including working smoke and carbon monoxide detectors in all bedrooms and common areas.

Short-term rentals (STRs) are legal in Scarborough, Maine, but operate under specific municipal regulations that were updated around 2019-2020. The town requires STR operators to obtain a business license and comply with zoning ordinances, with rentals generally permitted in residential zones but subject to occupancy limits, parking requirements, and noise restrictions. Properties must meet safety standards including smoke and carbon monoxide detectors, and operators are required to provide local contact information for guests and neighbors. Scarborough has implemented a complaint-driven enforcement system and requires STRs to maintain liability insurance, while also mandating that operators collect and remit state lodging taxes. The town has not implemented a cap on the number of STR permits but reserves the right to revoke licenses for repeated violations of noise, parking, or occupancy regulations.

The most promising Airbnb investment areas in Scarborough, Maine include the Prouts Neck neighborhood, which attracts high-end tourists seeking luxury coastal accommodations near the exclusive Prouts Neck Country Club and stunning ocean views, commanding premium nightly rates especially during summer months. The Pine Point area offers excellent potential due to its proximity to Pine Point Beach and the Scarborough Beach State Park, drawing families and beach enthusiasts from May through September, with additional appeal from the nearby Amtrak Downeaster station providing easy Boston access. The Higgins Beach district presents strong investment opportunities given its reputation as one of Maine's premier surfing destinations, attracting year-round visitors including surfers, beach lovers, and those seeking a quieter alternative to Old Orchard Beach. The Old Orchard Beach border area of Scarborough captures overflow demand from the popular tourist destination while offering slightly lower property acquisition costs, benefiting from proximity to the amusement park, pier, and summer events. Finally, properties near the Scarborough Marsh and Eastern Trail appeal to eco-tourists, bird watchers, and outdoor enthusiasts, providing potential for year-round bookings from nature lovers and those visiting the Rachel Carson National Wildlife Refuge.

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. Additionally, hosts must collect the state's 5.5% sales tax on lodging services. The City of Scarborough imposes a local lodging tax of 1% on short-term rental accommodations. These taxes are typically collected from guests at the time of booking through Airbnb's automatic tax collection system for properties in Maine, which remits directly to the state on behalf of hosts for state taxes. However, hosts are responsible for registering with Maine Revenue Services, obtaining a sales tax certificate, and may need to file monthly or quarterly returns depending on their volume. For the local Scarborough lodging tax, hosts must register with the city and remit taxes directly to the municipal tax collector on a monthly basis by the 15th of the following month. Exemptions generally include stays over 28 consecutive days, which are considered long-term rentals, and accommodations for certain government employees or during declared emergencies, though hosts should verify current exemption criteria with both state and local tax authorities as regulations can change.

Starting an Airbnb in Scarborough, Maine requires approximately $650,000-750,000 in total initial investment. Property purchase costs average $525,000 based on median home prices in the area as of 2024. Furnishing a 3-bedroom property runs $15,000-25,000 including beds, linens, kitchen essentials, living room furniture, and decor. Initial setup costs including professional photography, listing creation, and basic renovations total $3,000-5,000. Permits and fees including short-term rental licenses, business registration, and local compliance costs approximately $500-1,500. Insurance premiums for short-term rental coverage average $2,500-4,000 annually. Utility setup and deposits for electricity, water, internet, and cable cost $500-800 initially. First six months operating costs including utilities ($1,200), cleaning services ($2,400), maintenance ($1,000), property management software ($300), and marketing ($500) total approximately $5,400. Additional considerations include a 20% down payment requirement ($105,000) if financing, closing costs ($8,000-12,000), and maintaining 3-6 months of operating expenses as reserves ($8,000-15,000).

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 $45,000-65,000 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 income. Net profit margins typically range from 25-40% for well-managed properties, with beachfront locations like those near Scarborough Beach and Prouts Neck commanding premium rates and achieving higher occupancy rates of 70-85% during summer months. Success factors include proximity to beaches, Old Orchard Beach attractions, and Portland's dining scene, with properties featuring modern amenities, professional photography, and responsive host communication achieving occupancy rates 15-20% higher than average. Properties within walking distance of Scarborough Beach or offering ocean views can achieve profit margins exceeding 45%, while inland properties typically see margins of 20-30%, making location the primary determinant of profitability in this market where seasonal demand drives 60-70% of annual revenue during the four-month peak season.

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 the higher end of this range during peak summer months from June through September when nightly rates can reach $200-350. Most investors achieve profitability within 18-24 months, particularly for well-located properties within 2 miles of the beach that can command premium rates during Maine's tourist season. The market benefits from consistent demand from both leisure travelers visiting southern Maine's attractions and business travelers accessing nearby Portland, with occupancy rates typically reaching 65-75% annually and seasonal properties often achieving 85-90% occupancy during the critical summer period.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Scarborough, Maine. Locally, Keller Williams Realty and Century 21 Advantage Gold have agents experienced in vacation rental investments along the Maine coast. RE/MAX By The Bay specializes in coastal properties and works with investors seeking Airbnb opportunities in the Scarborough area. National services include BiggerPockets for investor networking and deal sourcing, Mashvisor for property analysis and market data, and AirDNA for short-term rental market insights. Local property management companies like Vacasa and RedAwning help investors identify and manage profitable properties. Maine-based firms such as Portside Real Estate Group and Benchmark Real Estate focus on investment properties in southern Maine coastal communities. Additional national platforms include Roofstock for turnkey rental properties, HomeUnion for investment property sourcing, and Awning for short-term rental investment analysis, all of which can help identify profitable Airbnb opportunities in Scarborough's growing vacation rental market near Old Orchard Beach and Portland.