Rhode Island is home to many thriving short-term rental markets, but identifying the top-performing cities can be overwhelming, especially when combing through data from countless locations across the state.
To simplify this process, we analyzed data from markets statewide and compiled a list of the top 7 cities for investors and landlords seeking potentially high-return rental properties in the coming year.
As always, we recommend thorough underwriting and analysis of any prospective property and a review of local short-term rental regulations before making any investment decisions.
How We Created This List
First, we looked at all Airbnb listings in Rhode Island that met the following criteria as of January 2025:
- Average Rating: 4.8 stars and above
- Guest Review Count: Minimum of 10
- Average Daily Rate: $1 (minimum) to $2,000 (maximum)
- Occupancy Rate: 1% (minimum) to 99% (maximum)
- Property Size: 1 to 10 bedrooms
- Property Type: Entire homes
We did this to eliminate Airbnb listings from our analysis that fall outside of what we consider "realistic" situations. This left us with a total of 1,306 Airbnb listings across the state of Rhode Island to work with.
Next, we grouped these listings by city and eliminated markets that didn't have at least 75 Airbnb listings meeting the above criteria. We took this step to avoid outlier cities we felt didn't have enough data to be considered at this current time. This left us with 7 cities in Rhode Island to rank.
Then, we needed to arrive at a gross yield number for each of our remaining cities in order to create our rankings. We did this by taking the average annual Airbnb revenue for each city and combining it with the cities median property value (from Zillow as of December 2024) to calculate our gross yield for each city.
Finally, we ordered the cities by highest gross yield.
The Top 7 STR Markets in Rhode Island
1. Middletown, RI
Middletown, RI, offers real estate investors a prime short-term rental market brimming with tourism appeal. Nestled between Newport and Portsmouth, this coastal town charms visitors with beautiful beaches and attractions like Sachuest Point National Wildlife Refuge and Newport Vineyards. Special events such as the Newport International Polo Series drive guests to vacation homes, promising lucrative rental income. The thriving local housing market provides real estate investors opportunities for good returns and strong cash flow. Don't miss out on this top destination for Airbnb hosts.
Key STR Metrics:
- Average Gross Yield: 9.4%
- Average Property Value: $1,094,465 (as of December 2024)
- Average Annual Revenue: $103,051 (past 12 months)
- Average Occupancy Rate: 43% (past 12 months)
- Qualifying Airbnbs: 258 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 50%
Find Airbnbs For Sale in Middletown, RI →
2. Bristol, RI
Bristol, RI is a prime destination for short-term rental investing, offering abundant attractions and a vibrant tourism scene. Known for its historic charm and the oldest Fourth of July celebration in the U.S., it attracts tourists year-round. The town offers lively events like the Bristol Art Night and Polo matches, making it one of the best places for vacation rentals. With its picturesque waterfront, thriving cultural events, and proximity to renowned destinations, the short-term rental market here promises good returns and steady cash flow for real estate investors.
Key STR Metrics:
- Average Gross Yield: 9.3%
- Average Property Value: $790,603 (as of December 2024)
- Average Annual Revenue: $73,304 (past 12 months)
- Average Occupancy Rate: 46% (past 12 months)
- Qualifying Airbnbs: 81 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 50%
Find Airbnbs For Sale in Bristol, RI →
3. Westerly, RI
Westerly, RI, is a prime spot for vacation homes due to its coastal charm and thriving short-term rental market. Attracting tourists year-round, its stunning beaches, like Misquamicut State Beach, and cultural events such as the Westerly Shakespeare in the Park, draw visitors in search of relaxation and entertainment. With its historic downtown, vibrant arts scene, and outdoor activities, Westerly offers a good return for real estate investors seeking optimal rental income. Investing here allows Airbnb hosts to capitalize on the strong tourism demand in one of New England's best places to visit.
Key STR Metrics:
- Average Gross Yield: 8.8%
- Average Property Value: $1,139,732 (as of December 2024)
- Average Annual Revenue: $100,648 (past 12 months)
- Average Occupancy Rate: 37% (past 12 months)
- Qualifying Airbnbs: 94 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 87%
Find Airbnbs For Sale in Westerly, RI →
4. Narragansett, RI
Narragansett, RI is a thriving hotspot for real estate investors seeking lucrative short-term rental properties. Known for its stunning beaches like Scarborough State Beach and Narragansett Town Beach, it offers tourists endless seaside enjoyment. The town hosts annual events like the Blessing of the Fleet Festival, drawing visitors from far and wide, and supports local sports with a vibrant surfing scene. With a booming vacation rental market, investors can expect strong rental income and cash flow from properties catering to both summer tourists and year-round visitors.
Key STR Metrics:
- Average Gross Yield: 8.6%
- Average Property Value: $1,231,667 (as of December 2024)
- Average Annual Revenue: $106,488 (past 12 months)
- Average Occupancy Rate: 53% (past 12 months)
- Qualifying Airbnbs: 226 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 88%
Find Airbnbs For Sale in Narragansett, RI →
5. Portsmouth, RI
Portsmouth, RI, a gem for real estate investors looking into the short-term rental market, boasts attractions like Green Animals Topiary Garden and the historical Glen Manor House, perfect for vacation rentals that attract tourists. With stunning waterfront views, visitors can enjoy water sports and picturesque hiking trails, while annual events like the Portsmouth Music Festival draw guests year-round. As a strategic location for vacation homes, Portsmouth offers promising rental income and a good return on investment, making it ideal for Airbnb hosts seeking robust cash flow.
Key STR Metrics:
- Average Gross Yield: 8.4%
- Average Property Value: $954,960 (as of December 2024)
- Average Annual Revenue: $80,330 (past 12 months)
- Average Occupancy Rate: 42% (past 12 months)
- Qualifying Airbnbs: 77 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 60%
Find Airbnbs For Sale in Portsmouth, RI →
6. Providence, RI
Providence, RI, offers an enticing short-term rental market for real estate investors due to its vibrant culture and array of attractions. With renowned institutions like Brown University and RISD drawing tourists year-round, the city becomes a lively hub for guests. Visitors can enjoy performances at the Providence Performing Arts Center or explore historic Federal Hill. As an Airbnb host, capitalizing on events like WaterFire can yield good returns and rental income. This dynamic market positions Providence as one of the best places for real estate investing in vacation rentals.
Key STR Metrics:
- Average Gross Yield: 6.0%
- Average Property Value: $691,169 (as of December 2024)
- Average Annual Revenue: $41,549 (past 12 months)
- Average Occupancy Rate: 45% (past 12 months)
- Qualifying Airbnbs: 351 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 93%
Find Airbnbs For Sale in Providence, RI →
7. Newport, RI
Newport, RI, renowned for its picturesque coastline and rich history, is a prime spot for short-term rental properties with a vibrant tourism scene perfect for real estate investors seeking good returns. Known for the opulent mansions on Bellevue Avenue, sailing regattas, and events like the Newport Jazz Festival, this coastal gem attracts visitors year-round. The thriving vacation rentals market offers investors lucrative rental income, making it one of the best places for short-term rental investments. With a robust tourism draw, Newport's short-term rentals promise consistent cash flow and growth.
Key STR Metrics:
- Average Gross Yield: 5.8%
- Average Property Value: $1,550,828 (as of December 2024)
- Average Annual Revenue: $89,850 (past 12 months)
- Average Occupancy Rate: 48% (past 12 months)
- Qualifying Airbnbs: 219 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 62%
