Maine is one of the hottest summer locations for tourists, welcoming millions and millions of visitors each year. Seeing as all of these vacationers need a place to stay, rental demand for vacation homes is understandably high. So a vacation rental investment in the Maine real estate market is something you should seriously consider. So that you can make a smart investment in Maine vacation rentals, we’re going to break down a couple of important factors. Let’s start by covering the average performance of vacation rentals in Maine.
Maine Housing Market Summary- Vacation Rentals
Before buying a vacation home in any real estate market, you need to assess the profitability of this investment. What kind of return will you get and just how sustainable is this property investment? The best way to evaluate a rental market is by looking at the data. Mashvisor’s investment property calculator has statewide data for the Maine vacation rental market.
Let’s take a look:
- Median Property Price: $329,107
- Price per Square Foot: $177
- Average Days on Market: 96
- Monthly Airbnb Rental Income: $2,695
- Airbnb Cash on Cash Return: 4.5%
- Airbnb Occupancy Rate: 50%
Amidst a very competitive vacation rental market in the US housing market, Maine seems to be doing quite well for itself. We’re seeing healthy numbers for vacation rentals in Maine statewide. According to the Maine Office of Tourism, the state witnessed an influx of 37 million visitors in 2018, in which tourist expenditures totaled $6.2 billion (a 3 percent increase from the year before). Clearly, the tourism industry is a big one for the economic development in Maine and the state knows it. To continue drawing in more and more people every year, the state’s new strategy is to market the value of the experience it is to visit Maine. Having put together a five-year plan for encouraging tourism to the state, we can say the Maine vacation rental market is well-supported.
Related: The 4 Steps of Airbnb Market Research
Although the state values tourism and all the services and businesses which support this industry, we can’t say operating vacation rentals in Maine comes without any hiccups. If you’re no stranger to the vacation rental market, you probably already know what we’re referring to- Airbnb laws and regulations. This has been the center of new legislation in many municipalities across the country. Having talked about the Maine vacation rental market in general, it’s now time to talk about the legality of operating vacation home rentals in Maine.
Short Term Rental Regulations in Maine
When it comes to the legal aspect of running a short term rental business, there’s a lot to consider. Taxes, insurance, health and safety codes, and what’s recently been in the headlines- municipal regulation.
Over a decade ago, Airbnb was an easy way for homeowners to make some extra cash by renting out a spare room for a couple of days a year. Fast forward to today, and it’s now a booming industry with millions of listings worldwide. Property owners realized how lucrative renting out on this platform could be. It was a cash flow business and people didn’t want to limit themselves to just renting out an extra room every now and then. So whole-home rentals dominated the platform. Airbnb has saturated a lot of housing markets, raising certain concerns leading regulators to restrict operations. So what’s the deal with Airbnb Maine?
Related: Housing Market Trends: How Airbnb Affects Home Prices and Rents
Maine vacation rentals don’t currently have any statewide regulations, but this hasn’t stopped local municipalities from implementing their own laws. It varies from city to city, but here’s what you need to know about local laws when investing in Maine vacation rental property.
Portland
Last year the Portland City Council increased the city’s original cap on non-owner occupied rental property from 300 to 400 units. All short term rental operators need to register with the city and pay a fee. Even though they’ve increased the cap, non-owner occupied vacation rentals are still not allowed in Portland single-family homes and condos. Multi-family building owners can only register up to 5 units from their building as vacation rentals.
South Portland
Non-owner occupied Maine vacation rentals are not allowed in South Portland. Owner-occupied rentals are, but can only be rented out a maximum of 14 days in a year. Considering these strict restrictions, investing in a vacation rental property in South Portland won’t be a smart move.
Related: 15 Best Vacation Rental Tips for Property Owners
Bar Harbor
The last city we’ll be talking about is the first one to try to regulate vacation house rentals in the state. Bar Harbor was sued by property owners for attempting to set its own regulations regarding Maine vacation rentals in 2006. Since then, there hasn’t been any talk of new Airbnb regulation.
The 8 Top-Performing Cities in Maine
Let’s now take a look at 8 of the best cities in the Maine real estate market for vacation rental properties. All of the following data is provided by Mashvior’s tools. If you’d like to analyze any real estate market in the US, start your 7-day free trial now.
1) Saco, York County
- Median Property Price: $391,891
- Average Days on Market: 108
- Monthly Airbnb Rental Income: $5,931
- Airbnb Cash on Cash Return: 12.7%
- Airbnb Occupancy Rate: 59%
2) Ellsworth, Hancock County
- Median Property Price: $303,536
- Average Days on Market: 77
- Monthly Airbnb Rental Income: $4,698
- Airbnb Cash on Cash Return: 12.3%
- Airbnb Occupancy Rate: 73%
3) Windham, Cumberland County
- Median Property Price: $362,636
- Average Days on Market: 69
- Monthly Airbnb Rental Income: $4,911
- Airbnb Cash on Cash Return: 10.7%
- Airbnb Occupancy Rate: 65%
4) Topsham, Sagadahoc County
- Median Property Price: $348,063
- Average Days on Market: 53
- Monthly Airbnb Rental Income: $4,199
- Airbnb Cash on Cash Return: 8.7%
- Airbnb Occupancy Rate: 68%
5) Augusta, Kennebec County
- Median Property Price: $179,693
- Average Days on Market: 64
- Monthly Airbnb Rental Income: $2,354
- Airbnb Cash on Cash Return: 7.8%
- Airbnb Occupancy Rate: 55%
6) Belfast, Waldo County
- Median Property Price: $335,852
- Average Days on Market: 72
- Monthly Airbnb Rental Income: $3,194
- Airbnb Cash on Cash Return: 7.6%
- Airbnb Occupancy Rate: 59%
7) Waterville, Kennebec County
- Median Property Price: $165,475
- Average Days on Market: 71
- Monthly Airbnb Rental Income: $1,994
- Airbnb Cash on Cash Return: 7.4%
- Airbnb Occupancy Rate: 45%
8) Bangor, Penobscot County
- Median Property Price: $194,716
- Average Days on Market: 66
- Monthly Airbnb Rental Income: $2,431
- Airbnb Cash on Cash Return: 7.0%
- Airbnb Occupancy Rate: 65%
Wondering what the best way to find Maine vacation homes for sale in these markets is? Well if you have a free Mashvisor account, you can use our Property Finder to find lucrative investment properties that match your criteria in a matter of minutes!
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