Is South Providence, Rhode Island Good for Airbnb Investment?

To start an Airbnb in South Providence, Rhode Island, begin by researching Providence's short-term rental regulations, which as of 2023 require hosts to obtain a business license from the city clerk's office and register with the Rhode Island Division of Taxation for lodging taxes (currently 5% state tax plus 1% local tax). Contact Providence's Planning Department at 444-3508 to verify zoning compliance, as some residential areas restrict short-term rentals, and obtain necessary permits including a Certificate of Occupancy if required. Find a suitable property by searching neighborhoods like Federal Hill or the West Side, ensuring it meets safety requirements including smoke detectors, carbon monoxide detectors, and proper egress windows. Furnish the space with quality basics including comfortable bedding, kitchen essentials, WiFi, and local guidebooks featuring Providence attractions like Federal Hill restaurants and Roger Williams Park. Create your Airbnb listing with professional photos, competitive pricing (typically $80-150/night in South Providence), and detailed descriptions highlighting proximity to downtown Providence and local amenities. For ongoing management, establish check-in procedures, maintain cleanliness standards, respond promptly to guests, collect and remit the required 6% total lodging taxes quarterly to Rhode Island Division of Taxation, and keep detailed records for both tax purposes and potential city inspections that Providence may conduct to ensure compliance with local regulations.

To identify profitable short-term rental properties in South Providence, Rhode Island, focus on properties within 2-3 miles of downtown Providence, Brown University, and Rhode Island Hospital, as these areas generate consistent demand from business travelers, visiting families, and medical tourists. Target 2-4 bedroom single-family homes or multi-family properties built after 1950 with parking spaces, modern kitchens, and reliable WiFi infrastructure, as South Providence's historic housing stock from the early 1900s often requires significant updates. Analyze comparable STR properties using AirDNA and Mashvisor to identify the $80-150 nightly rate sweet spot, with properties generating $2,000-4,000 monthly revenue performing well in this market. Research competition by examining listings within a 1-mile radius on Airbnb and VRBO, noting that successful properties often emphasize proximity to Federal Hill's restaurant scene, easy highway access via I-95 and Route 6, and walkability to public transportation. Utilize tools like Rabbu and PriceLabs for dynamic pricing, partner with local property management companies familiar with Providence's STR regulations, and leverage the Rhode Island MLS system through local real estate agents who understand the neighborhood's gentrification patterns and can identify undervalued properties near the expanding medical district and emerging arts corridor along Broad Street.

To obtain an Airbnb/STR permit in South Providence, Rhode Island, you must first apply through the Providence Planning Department at City Hall located at 25 Dorrance Street, as South Providence falls under Providence city jurisdiction. Required documents include a completed short-term rental application, proof of property ownership or lease agreement, certificate of occupancy, floor plans, proof of liability insurance (minimum $1 million), fire safety inspection certificate from the Providence Fire Department, and a business license from the city clerk's office. The application fee is approximately $200-300 with an additional $150 annual renewal fee, plus inspection fees of around $100-200. The timeline typically takes 60-90 days from submission to approval, including scheduling required inspections. Specific Providence requirements include maintaining a maximum occupancy of 2 people per bedroom plus 2 additional guests, installing smoke and carbon monoxide detectors in all bedrooms and common areas, providing emergency contact information to neighbors within 200 feet, maintaining a guest registry, ensuring adequate parking (typically 1 space per unit), and complying with zoning restrictions that may limit STRs in certain residential areas. Properties must also meet building code requirements and pass health and safety inspections before permit issuance.

Short-term rentals (STRs) in South Providence, Rhode Island operate under Providence's citywide regulations established around 2019-2020, which generally allow STRs but with significant restrictions. The city requires STR operators to obtain a business license and special use permit, limits rentals to no more than 180 days per year for non-owner-occupied properties, and mandates that operators live within 25 miles of the rental property. Providence prohibits STRs in certain zoning districts and requires a minimum 500-foot separation between STR properties in residential areas. South Providence, being a predominantly residential neighborhood with mixed zoning, faces particular scrutiny due to housing affordability concerns, and the city has implemented stricter enforcement in recent years following complaints about noise, parking, and impacts on long-term housing stock. Property owners must also comply with state fire safety codes, maintain liability insurance, and register with the Rhode Island Division of Taxation for lodging taxes.

The best areas for Airbnb investment in South Providence, Rhode Island include the Federal Hill neighborhood, which attracts tourists seeking authentic Italian-American dining experiences and cultural events, particularly during the annual Federal Hill Stroll festival. The Elmwood district offers affordable investment opportunities with growing appeal due to its proximity to downtown Providence and Roger Williams Park, drawing families and leisure travelers. The West Side Cultural District benefits from its artistic community, galleries, and proximity to Trinity Repertory Company and AS220, attracting cultural tourists and business travelers attending events at the Rhode Island Convention Center. The area near Roger Williams Park Zoo and Museum is particularly attractive for family-oriented short-term rentals, especially during summer months and school vacation periods. Properties near major hospitals like Rhode Island Hospital and Women & Infants Hospital can capture medical tourism and visiting family members, while locations with easy highway access to Route 95 appeal to business travelers commuting to Boston or New York City.

In South Providence, Rhode Island, Airbnb hosts are subject to Rhode Island's state hotel tax of 5% on gross receipts from short-term rentals under 30 days, which applies to all lodging accommodations including vacation rentals. The state also imposes a 7% sales tax on short-term rental accommodations, bringing the total state tax burden to 12%. Providence imposes an additional local hotel tax of 6% on short-term rentals, making the combined tax rate approximately 18% on gross rental income. These taxes are typically collected by Airbnb directly from guests at the time of booking for properties listed on their platform, with Airbnb remitting payments quarterly to the Rhode Island Division of Taxation and the City of Providence. Hosts who collect taxes independently must register with the state and city, file monthly returns, and remit taxes by the 20th of the following month. Exemptions generally apply to rentals of 30 days or longer, which are considered long-term leases rather than transient accommodations, and some exemptions may exist for owner-occupied properties rented fewer than 14 days per year, though hosts should verify current regulations as tax laws have evolved significantly since 2019 when Rhode Island began more actively regulating short-term rentals.

The total cost to start an Airbnb in South Providence, Rhode Island is approximately $285,000-$315,000. Property purchase costs around $220,000-$250,000 based on median home prices in the area as of 2023-2024. Furnishing a 2-3 bedroom property requires $15,000-$25,000 for quality furniture, bedding, kitchen essentials, and decor to create an attractive rental space. Initial setup costs including professional photography, listing creation, welcome materials, and basic supplies total $2,000-$3,000. Permits and fees include business registration ($50), short-term rental permits ($200-$500), and potential zoning compliance costs totaling $1,000-$2,000. Insurance for short-term rentals runs $2,000-$3,000 annually, with the first year paid upfront. Utilities setup and deposits for electricity, gas, water, internet, and cable cost approximately $1,500-$2,500. First six months operating costs including utilities ($1,800), cleaning services ($3,600), maintenance reserves ($2,000), platform fees on estimated bookings ($2,400), property management software ($300), and miscellaneous supplies ($900) total around $11,000. Additional considerations include potential property improvements, marketing costs, and working capital for periods of lower occupancy, making the comprehensive startup investment range from $285,000 to $315,000 depending on property condition and furnishing choices.

Airbnb properties in South Providence, 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 ($30-50 per turnover), utilities ($150-250 monthly), property management (10-20% of revenue), insurance ($800-1,500 annually), and maintenance costs ($2,000-4,000 yearly). Profit margins for successful operators average 25-40% after expenses, with properties near Federal Hill's restaurant district and those offering parking commanding premium rates. A typical 2-bedroom unit generating $28,000 annually might net $8,000-$12,000 profit after $16,000-$20,000 in total expenses. Success factors include proximity to downtown Providence (10-minute drive), Roger Williams Park, and local attractions, plus professional photography, consistent 4.8+ star ratings, and rapid guest communication response times under 1 hour. Properties with dedicated parking spaces see 15-20% higher booking rates, while those offering local restaurant recommendations and city guides achieve occupancy rates of 65-75% compared to the market average of 55-60%.

Airbnb investments in South Providence, Rhode Island typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% based on current market conditions. Properties in this area, with average acquisition costs of $180,000-$250,000, can achieve monthly rental income of $1,200-$1,800 depending on property size and amenities. After accounting for operating expenses including utilities, cleaning, maintenance, insurance, and Airbnb fees (typically 25-35% of gross revenue), investors can expect net annual returns of $8,000-$15,000. The timeframe to profitability is generally 18-24 months, considering initial renovation costs of $15,000-$30,000 for most properties to meet short-term rental standards. South Providence benefits from proximity to downtown Providence, Brown University, and RISD, driving consistent demand from business travelers, visiting families, and tourists, with occupancy rates averaging 65-75% annually and higher rates during peak summer months and university events.

STRSearch is a national platform that specializes in identifying profitable short-term rental investment opportunities and provides data analytics for Airbnb properties across markets including South Providence, Rhode Island. Local real estate agents like Keller Williams Realty of Newport County and RE/MAX Newport County have agents experienced in investment properties and short-term rental markets in the Providence area. National services include Awning (formerly RedAwning) which offers end-to-end Airbnb investment services, AirDNA for market analysis and revenue projections, and Mashvisor for rental property analysis and investment tools. Local companies such as Ocean State Real Estate Group and Residential Properties Ltd. have agents familiar with the South Providence market and investment opportunities. Additional national platforms include BiggerPockets for investor networking and education, Roofstock for turnkey rental properties, and HomeUnion for single-family rental investments, while local property management companies like Blackstone Property Management and Providence Property Solutions can assist with identifying investment opportunities and managing short-term rentals in the South Providence area.