Is Smith Hill, Rhode Island Good for Airbnb Investment?

To start an Airbnb in Smith Hill, Rhode Island, begin by researching Providence city regulations as Smith Hill falls under Providence jurisdiction, which requires short-term rental operators to obtain a business license and comply with zoning laws that typically allow short-term rentals in residential areas with proper permits. Contact Providence City Hall at 401-421-7740 to obtain the necessary short-term rental permit, business license, and ensure compliance with fire safety codes and occupancy limits, which usually require smoke detectors, carbon monoxide detectors, and may limit occupancy to 2 guests per bedroom plus 2 additional guests. Find a suitable property in Smith Hill by searching areas near Federal Hill or downtown Providence for good walkability scores, considering properties with 2-3 bedrooms that can accommodate 4-6 guests, with average property prices ranging $150,000-$300,000 in the neighborhood. Furnish the space with essential items including quality mattresses, linens, towels, basic kitchen appliances, WiFi, TV, and local guidebooks, budgeting approximately $5,000-$15,000 for complete furnishing depending on property size. List your property on Airbnb, VRBO, and Booking.com with professional photos highlighting proximity to Federal Hill's restaurants, downtown Providence attractions, and easy highway access, setting competitive rates around $80-$150 per night based on local market analysis. Manage the property by establishing check-in procedures, hiring local cleaning services (typically $50-$80 per turnover), maintaining 24/7 guest communication, and considering property management companies like RedAwning or Vacasa if you prefer hands-off management, while ensuring compliance with Rhode Island's 8.5% state sales tax and Providence's local occupancy tax requirements.

To identify profitable short-term rental properties in Smith Hill, Rhode Island, focus on properties within walking distance of downtown Providence (0.5-1 mile radius) or near major attractions like Federal Hill's restaurant district, as Smith Hill's proximity to downtown is its primary draw. Target 2-3 bedroom properties built after 1950 with updated kitchens, reliable parking, and strong WiFi capability, as business travelers and weekend visitors prioritize these amenities. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against comparable properties in Federal Hill and downtown Providence, aiming for properties that can achieve $80-120 per night rates while maintaining 60-70% occupancy. Research competition by analyzing existing Airbnb and VRBO listings within a 1-mile radius, identifying gaps in amenities or pricing strategies, and monitor seasonal demand patterns since Providence sees increased activity during Brown University events and summer tourism. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through Rhode Island Statewide MLS, while connecting with Providence-area real estate agents familiar with Smith Hill's gentrification trends and zoning regulations, as the neighborhood's ongoing revitalization presents opportunities for properties under $300,000 that can generate 8-12% annual returns when properly positioned in the short-term rental market.

To obtain an Airbnb/STR permit in Smith Hill, Rhode Island, you must apply through the City of Providence's Department of Inspections and Standards since Smith Hill is a neighborhood within Providence. Begin by submitting an application to the Providence Planning Department at 400 Westminster Street, including a completed short-term rental registration form, proof of property ownership or lease agreement, certificate of occupancy, floor plans showing maximum occupancy, proof of liability insurance (minimum $1 million), contact information for a local representative available 24/7, and a $200 application fee. Providence requires STR operators to obtain a business license ($50 annually), register with the Rhode Island Division of Taxation for lodging taxes, and comply with zoning requirements which may limit STRs in certain residential areas of Smith Hill. The property must pass a fire safety inspection ($75 fee) and meet all building code requirements including proper egress windows, smoke and carbon monoxide detectors, and fire extinguishers. The review process typically takes 30-45 days, and once approved, you must renew annually for $100, maintain guest registries, collect and remit 13% state lodging tax plus 1% local tax, and ensure no more than the approved number of guests occupy the property at any time.

Short-term rentals (STRs) in Smith Hill, Providence, Rhode Island operate under Providence's municipal regulations which generally allow STRs but with significant restrictions. As of 2023, Providence requires STR operators to obtain a business license and comply with zoning regulations, with many residential areas limiting or prohibiting commercial short-term rental activities. Smith Hill, being a predominantly residential neighborhood, faces restrictions on non-owner-occupied STRs, meaning properties where the owner doesn't live on-site may be prohibited from operating as short-term rentals. The city has implemented these rules to address housing affordability concerns and neighborhood character preservation. Providence also requires STR operators to register with the city, pay applicable taxes, maintain insurance, and follow occupancy limits. Recent changes around 2022-2023 have tightened enforcement and increased penalties for non-compliant operators. Property owners in Smith Hill should verify current zoning compliance and obtain proper permits before operating any short-term rental, as violations can result in fines and cease-and-desist orders.

The best areas for Airbnb investment in Smith Hill, Rhode Island are concentrated around the Federal Hill corridor and the areas closest to downtown Providence, particularly near Atwells Avenue and the western edge of Smith Hill bordering the Hill neighborhood. The Federal Hill section attracts tourists year-round due to its renowned Italian-American restaurants, annual festivals like the Federal Hill Stroll, and proximity to major Providence attractions including the Providence Performing Arts Center and Rhode Island Convention Center. Properties near Chad Brown Street and Elmwood Avenue benefit from business travelers visiting nearby hospitals including Rhode Island Hospital and corporate offices, while the residential streets between Douglas Avenue and Smith Street offer quieter settings that appeal to families and longer-term visitors exploring Providence's cultural districts. The neighborhood's strategic location provides easy access to Interstate 95, making it attractive for visitors traveling to Boston, New York, or other New England destinations, while Brown University and RISD generate consistent demand from visiting academics, prospective students, and families attending university events throughout the academic year.

Airbnb properties in Smith Hill, Rhode Island are subject to multiple lodging taxes including the state hotel tax of 5.5% on gross receipts, Providence city hotel tax of 6% on room charges, and Rhode Island sales tax of 7% on short-term rental accommodations. The state hotel tax is collected by hosts and remitted monthly to the Rhode Island Division of Taxation by the 20th of the following month using form T-204, while the Providence city tax is collected similarly and remitted to the Providence Tax Assessor's office. Sales tax must be registered for and remitted quarterly through the Rhode Island Division of Taxation's online portal. Airbnb may collect and remit some of these taxes directly on behalf of hosts depending on current agreements with state and local authorities. Exemptions typically apply to stays exceeding 30 consecutive days, rentals to permanent residents, and accommodations provided to certain government employees or during declared emergencies, though hosts must maintain proper documentation to claim exemptions and may need to register for tax permits before operating legally in Providence.

To start an Airbnb in Smith Hill, Rhode Island, expect total costs around $285,000-$320,000. Property purchase represents the largest expense at $250,000-$280,000 for a median 2-3 bedroom home in this Providence neighborhood. Furnishing costs typically range $8,000-$12,000 including beds, linens, kitchen essentials, living room furniture, and basic appliances. Initial setup costs approximately $2,000-$3,000 covering professional photography, listing creation, welcome materials, and basic renovations or touch-ups. Permits and fees total around $500-$800 including business registration, short-term rental permits from Providence, and potential HOA approvals. Insurance costs $1,200-$2,000 annually for short-term rental coverage beyond standard homeowner's insurance. Utilities setup and deposits require $300-$500 for electricity, gas, water, internet, and cable services. First six months operating costs average $3,000-$4,500 including utilities ($150-200/month), cleaning services ($75-100 per turnover), supplies and maintenance ($100-150/month), Airbnb host fees (3% of bookings), and marketing expenses. Additional considerations include property taxes ($3,000-4,000 annually) and potential property management fees if outsourcing operations at 10-20% of rental income.

Airbnb properties in Smith Hill, Rhode Island typically generate annual revenues between $15,000-$35,000 for entire home listings, with average daily rates ranging from $75-$120 depending on property size and amenities. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($25-40 per turnover), utilities ($150-250 monthly), property management (10-20% of revenue), insurance ($800-1,200 annually), and maintenance costs ($2,000-4,000 yearly). Profit margins in the area average 25-35% for well-managed properties, with successful hosts like those operating renovated multi-family homes near downtown Providence achieving occupancy rates of 65-75% annually. Key success factors include proximity to Brown University and RISD (driving demand from visiting families), competitive pricing 15-20% below downtown Providence rates, professional photography, and maintaining 4.8+ star ratings through consistent cleanliness and communication. Properties within walking distance of Federal Hill's restaurant district or with parking included typically outperform by 20-30%, while hosts who offer local guidebooks and respond to inquiries within an hour see booking rates increase significantly compared to less engaged competitors in the Smith Hill market.

Based on Smith Hill, Rhode Island market conditions, Airbnb investments typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% depending on property acquisition costs and renovation requirements. Properties in this Providence neighborhood, with median home prices around $180,000-$220,000 as of 2023, can achieve average daily rates of $85-$120 for well-positioned units near downtown Providence and local attractions. Initial investment including down payment, renovations, and furnishing typically ranges $40,000-$60,000, with most investors reaching profitability within 18-24 months given Smith Hill's growing appeal to visitors seeking affordable alternatives to downtown hotels. Occupancy rates generally stabilize at 65-75% annually, with stronger performance during summer months and Brown University/RISD academic calendar periods, while operating expenses including utilities, cleaning, maintenance, and platform fees typically consume 35-45% of gross rental income.

STRSearch is a national platform that specializes in identifying profitable short-term rental investment properties across markets including Smith Hill, Rhode Island. Local real estate agents like those at Residential Properties Ltd and RE/MAX Newport County have experience with investment properties in the Providence area and can assist with Airbnb acquisitions in Smith Hill. National services include Mashvisor, which provides Airbnb analytics and property recommendations, and BiggerPockets, which connects investors with local agents experienced in rental properties. AirDNA offers market data and revenue projections for short-term rentals in the Providence market. Local property management companies like Ocean State Property Management and Rhode Island Rental Properties can provide insights into profitable Airbnb locations. Additional national platforms include Roofstock, which focuses on rental property investments, and LoopNet for commercial and multi-family properties suitable for short-term rentals. Local mortgage brokers like Mortgage Network and residential investment specialists at Coldwell Banker Residential Brokerage can facilitate financing for Airbnb properties in the Smith Hill neighborhood.