Vacation Rentals in the New England Area - Worth it?

[Jonathan Lai]

I am looking to purchase a vacation home investment in the New England area.

The rentals are going to be weekly seasonal and I would basically stay in the place in the off seasons.

1. Due to very short summer season in the area - how is the return in investment?
2. Are the repairs due being near the ocean?
3. Any benefits of being in Cape Cod vs Narragansett RI?

Thank you in advance!

[Anthony Thompson]

I’d also add that there’s a big difference between renting for a week and renting for a month, since the week falls into the “short term rental” category. Potentially more money but also, increasingly, more taxes, fees and regulations.

At one point I’d heard that some investors were trying to rent out for exactly one month at a time instead of weekly because it was a better deal overall, though I don’t have a specific reference to give you on that. But something to consider, especially if you contact the town to ask about requirements for short term vs monthly rentals (which I absolutely recommend you do).

There’s a special state-level short term rental tax but my understanding is that AirBNB/VRBO handles that for you. I don’t have personal experience to confirm it though, so just something else to check on if you’ll be using those platforms (or any other).

I'd expect that @Colleen F. would have some thoughts on Narragansett too, and for general concerns about buying coastal property I'd recommend checking out the Coastal Property Guide.