How to Start an Airbnb Business in New Jersey

Why New Jersey Is a Top Market for Short-Term Rentals

New Jersey sits in the middle of a geographic sweet spot that most states can’t match. You’ve got 130 miles of Atlantic coastline on one side, New York City’s overflow demand pressing in from the north, Philadelphia spilling over from the west, and 9.3 million residents who need weekend getaways that don’t require a flight. That combination creates STR demand patterns that are both intense and layered.

The Jersey Shore alone accounts for a massive chunk of the state’s tourism economy. The New Jersey Division of Travel and Tourism reports that the state welcomed over 115 million visitors in recent years, generating more than $46 billion in tourism spending. A significant portion of those visitors stay in short-term rentals — particularly along the coast, where hotel inventory has never kept pace with summer demand.

But the Shore isn’t the whole story. Atlantic City operates as its own micro-market, drawing 26+ million visitors annually to its casinos, convention center, and entertainment venues. Northern New Jersey towns along the NJ Transit corridor serve as de facto overflow housing for NYC — travelers who can’t find (or afford) Manhattan hotels book Airbnbs in Jersey City, Hoboken, and Newark, then take a 15-minute PATH train into the city. That dynamic creates year-round, non-seasonal demand that most “beach town” markets can’t offer.

The state’s appeal for rental arbitrage operators is straightforward: rents in many NJ markets sit well below what you can generate in STR revenue, especially in shore towns during peak season and in the NYC-adjacent corridor year-round. A two-bedroom apartment in Asbury Park that rents for $2,200/month can pull $5,000-$7,000/month in STR revenue during summer. That margin gap is what makes this state worth your attention.

New Jersey also benefits from event-driven demand that keeps calendars filled beyond typical tourist seasons. MetLife Stadium (home of the Giants and Jets), the Prudential Center (Devils, concerts), major pharmaceutical and financial company headquarters, and Princeton University all create booking spikes that have nothing to do with beach weather.

New Jersey Short-Term Rental Laws and Regulations

New Jersey’s regulatory environment for short-term rentals falls somewhere between the strict Boston-style approach and the free-for-all you see in some southern states. The state has a clear tax framework, but most operational regulations happen at the municipal level — and those vary wildly from one town to the next.

State-Level Requirements

New Jersey doesn’t have a single statewide STR licensing law, but several state-level obligations apply to every operator:

• State sales tax: New Jersey applies its 6.625% sales tax to transient accommodations (stays under 90 consecutive days). This applies to all STR bookings regardless of platform.
• State occupancy fee: An additional 5% state occupancy/tourism fee applies on top of the sales tax. Combined, you’re looking at 11.625% in state-level taxes alone before any municipal additions.
• Municipal occupancy tax: Many NJ municipalities charge their own occupancy tax, typically 1-3%. Jersey City charges 6%. These stack on top of the state taxes.
• Business registration: Operators must register with the New Jersey Division of Revenue and Enterprise Services and obtain a Certificate of Authority to collect sales tax.
• Homeowner/condo restrictions: Many condo associations and HOAs in New Jersey restrict or prohibit short-term rentals. Verify your property’s governing documents before investing.

Airbnb and Vrbo remit state sales tax and the state occupancy fee on behalf of hosts for bookings made through their platforms. However, some municipal taxes may still require separate registration and filing.

Key City Regulations

Jersey City: Jersey City has the most developed STR regulatory framework in New Jersey. The city requires all short-term rental operators to obtain a permit through its Division of Housing Preservation. Owner-occupied units can rent for up to 60 nights per year without restrictions. Non-owner-occupied units need a special permit, and the city limits the total number of these permits by ward. Jersey City also imposes a 6% municipal occupancy tax — stacking that on top of state taxes means your total tax burden in Jersey City hits 17.625%. Despite the regulation, demand stays strong because of the NYC proximity factor.

Atlantic City: Atlantic City takes a relatively welcoming approach to STRs. The city permits short-term rentals in most zones, and the regulatory requirements focus on safety compliance (fire codes, occupancy limits) rather than outright restrictions. Operators need a mercantile license and a certificate of occupancy. Atlantic City’s tourism infrastructure means local officials generally view STRs as complementary to the hotel/casino economy rather than competitive with it. ADRs run $120-$200 in off-peak and $200-$350+ during summer weekends and major events.

Asbury Park: Asbury Park experienced a complete transformation over the past decade, evolving from a declining boardwalk town into one of the Jersey Shore’s hottest destinations. The city requires STR operators to register with the clerk’s office and obtain an annual license. Zoning restrictions apply — some residential zones limit or prohibit STRs, so check the specific block before committing. Asbury Park’s arts scene, LGBTQ+ welcoming reputation, and proximity to NYC (about 70 minutes by NJ Transit) drive consistent demand from May through October.

Cape May: Cape May is one of the most tourism-dependent communities in New Jersey, and short-term rentals are deeply woven into its economy. The city requires a rental license and annual safety inspection. Cape May’s strict historic preservation rules also affect what you can do with properties — exterior modifications need approval. The upside: Cape May commands some of the highest ADRs on the Jersey Shore ($250-$500/night in peak summer), and its Victorian charm attracts a higher-spending demographic.

Recent Regulatory Changes (2025-2026)

• Jersey City has continued to refine its STR framework, with 2025 updates tightening enforcement on unlicensed listings. The city now uses platform data-sharing agreements to identify non-compliant operators and issue fines automatically.
• Long Beach Island (LBI) communities including Long Beach Township and Ship Bottom introduced new registration requirements in 2024-2025, requiring annual permits and safety inspections for all rental properties.
• The New Jersey state legislature has considered bills that would create a uniform statewide STR registration system, but none have passed as of early 2026. The NJ Department of Community Affairs remains the best source for state-level updates.
• Several Ocean County municipalities are evaluating permit caps similar to what Jersey City implemented, particularly in towns where STR density has drawn resident complaints.

The trend in New Jersey leans toward more regulation, not less — but it’s happening town by town rather than through sweeping state legislation. Hosts who get permitted early lock in their position before caps tighten further.

Tax Obligations for New Jersey Airbnb Hosts

New Jersey’s tax structure for STR operators layers state and local obligations that can add up fast. Here’s the complete picture:

• NJ Sales Tax: 6.625% on all transient accommodations (stays under 90 days).
• State Occupancy/Tourism Fee: 5% additional, bringing the state-level total to 11.625%.
• Municipal Occupancy Tax: Varies by municipality. Jersey City charges 6%, many shore towns charge 2-3%, some charge nothing.
• Tourism Improvement District assessments: Some boardwalk communities assess additional fees. Atlantic City has a Tourism District assessment that applies to accommodations.

In Jersey City, a host’s total tax rate on each booking hits 17.625% when state and local taxes combine. Even in towns without a local occupancy tax, you’re still passing along 11.625% in state taxes. Build these into your nightly rate calculations — guests see the total price on platforms, and high tax add-ons can make your listing look expensive if your base rate isn’t calibrated.

Airbnb and Vrbo collect and remit NJ sales tax and the state occupancy fee for bookings on their platforms. Municipal taxes may or may not be collected automatically — verify with your specific municipality. If you take direct bookings through your own website, you’re responsible for collecting and remitting all applicable taxes yourself.

For federal income taxes, report STR income on Schedule E (passive rental) or Schedule C (if you provide substantial guest services like daily cleaning, meals, or guided experiences). New Jersey state income tax ranges from 1.4% to 10.75% depending on your total income bracket. Keep detailed records of all deductible expenses: mortgage interest, property taxes (subject to SALT cap), insurance, cleaning fees, supplies, repairs, depreciation, and platform commissions.

Best Cities for Airbnb in New Jersey

Jersey City

Jersey City is the year-round anchor of New Jersey’s STR market. Its position directly across the Hudson River from Manhattan — with PATH train access to the World Trade Center in under 10 minutes — makes it the top alternative for NYC visitors looking for lower accommodation costs. Average ADRs for entire-home listings run $165-$220, with occupancy rates between 74% and 83% year-round.

The best-performing neighborhoods for STRs include the Waterfront/Exchange Place area, Downtown/Grove Street, and the Heights (which offers lower rents for arbitrage operators while still being transit-accessible). Journal Square has emerged as a value play — slightly lower ADRs but also significantly lower operating costs.

Jersey City’s demand drivers are diverse: business travelers during the week, NYC tourists on weekends, families visiting for events at Liberty Science Center, and a growing convention and corporate event scene. That diversity is what keeps occupancy high across all seasons.

Asbury Park

Asbury Park is the Jersey Shore’s comeback story, and STR operators have been among the biggest beneficiaries of the city’s renaissance. The boardwalk renovation, thriving restaurant scene (Porta, Moonstruck, Langosta Lounge), and year-round music venues like the Stone Pony create demand that extends well beyond traditional beach season.

ADRs range from $140-$180 in the off-season to $250-$400 during peak summer. Occupancy hits 85-90% from June through August, then drops to 45-55% in winter. Two-bedroom apartments within walking distance of the boardwalk are the sweet spot for arbitrage — the rent-to-revenue spread is strongest in that tier.

The city’s proximity to NYC via NJ Transit means weekend demand starts on Thursday afternoons and extends through Sunday — effectively giving you a four-day “weekend” for pricing purposes. Hosts who price Thursday and Friday at weekend rates consistently outperform those who only bump Saturday.

Atlantic City

Atlantic City operates on a different demand model than the rest of the Shore. Casino visitors, convention attendees, and event-goers (concerts at the Boardwalk Hall, boxing and UFC at Hard Rock) drive most bookings. The typical AC guest doesn’t care about beach proximity — they want proximity to the casino floor, the boardwalk, and nightlife.

ADRs average $130-$190, with spikes to $250+ during major events and holiday weekends. Occupancy runs 60-70% annually. The margin opportunity in AC comes from the city’s relatively low operating costs — rents and property prices are among the most affordable on the Jersey Shore. A two-bedroom condo near the boardwalk that rents for $1,400/month can generate $3,200-$4,500/month in STR revenue.

One thing to watch: Atlantic City’s short-term rental market correlates heavily with casino industry health. When casinos invest and expand, STR demand rises. When they pull back, it softens.

Cape May

Cape May is the premium tier of the New Jersey STR market. The city’s Victorian architecture, upscale dining, wine trails, and designation as a National Historic Landmark attract a higher-income traveler who’s willing to pay accordingly. Summer ADRs for well-appointed whole-home rentals run $300-$500/night, with luxury properties exceeding $700.

Occupancy peaks above 90% in July and August, with strong shoulder seasons in June and September as the Cape May food and wine scene draws visitors independent of beach weather. The Christmas season also generates meaningful bookings — Cape May’s Victorian holiday celebrations attract visitors from the entire mid-Atlantic region.

The barrier to entry is higher here: property values are steep, historic preservation rules limit renovations, and the year-round resident community actively monitors STR activity. But for hosts who can meet the bar, Cape May consistently ranks among the top 20 STR revenue markets per-property in the northeastern United States.

Long Beach Island (LBI)

LBI has been a summer rental destination for generations, and short-term rental platforms simply modernized an existing market. The island’s 18-mile stretch includes multiple municipalities (Long Beach Township, Beach Haven, Ship Bottom, Surf City), each with slightly different regulations but similar demand patterns.

Summer ADRs range from $250 to $450 for whole-home rentals, with peak-week bookings (4th of July, Labor Day) commanding premium pricing. Annual occupancy averages 40-50% — this is a highly seasonal market, and winter bookings are minimal. The math works because summer revenue is high enough to cover annual costs in three to four months of peak season.

LBI properties are predominantly single-family homes, making this market better suited for ownership than arbitrage. The island’s residential character means few apartment buildings, and landlords with rental properties typically manage their own summer rentals rather than leasing to arbitrage operators.

How Much Do Airbnbs Make in New Jersey?

New Jersey’s diverse markets produce a wide revenue range. Here’s what current data shows for the top markets:

City/Region	Avg ADR	Avg Occupancy	Est. Monthly Revenue (1BR)	Est. Monthly Revenue (3BR)
Jersey City	$185	78%	$4,330	$7,500
Asbury Park	$215	62%	$4,000	$7,800
Atlantic City	$155	65%	$3,020	$5,800
Cape May	$340	55%	$5,610	$11,200
Long Beach Island	$310	45%	$4,185	$8,900
Hoboken	$175	72%	$3,780	$6,400

A few notes on these numbers. Jersey City and Hoboken revenue is remarkably consistent month to month — there’s no seasonal cliff like you see at the Shore. That consistency makes these markets ideal for arbitrage, where predictable monthly revenue matters more than peak-season spikes.

Cape May and LBI show the opposite pattern: very high peak-season revenue that concentrates into 4-5 months, with substantial off-season drops. Operators in these markets need to price their peak weeks aggressively enough to carry the full annual cost structure.

Across all NJ markets, hosts who use dynamic pricing tools and maintain Superhost status (or equivalent) report 18-22% higher revenue than those using static pricing. In a competitive market like the Jersey Shore, that gap is often the difference between profitable and break-even.

How to Start Your New Jersey Airbnb Business

Getting started in New Jersey requires navigating both state tax registration and local municipal rules. Here’s the process, in practical order:

Step 1: Pick your market model. New Jersey offers distinct opportunities depending on your approach. Rental arbitrage works well in Jersey City and Asbury Park, where apartment stock is available and ADRs exceed monthly rent. Ownership plays dominate in Cape May and LBI. Co-hosting is growing across the state as homeowners with shore properties seek professional management for their vacation homes.

Step 2: Verify local regulations. Before signing a lease or closing on a property, confirm that short-term rentals are permitted in your target zone. Call the municipal clerk’s office. Ask for the specific ordinance number. In Jersey City, check which ward your property falls in and whether non-owner-occupied permits are still available. On LBI, confirm which township your property is in (they each have separate rules).

Step 3: Register your business with the state. File with the NJ Division of Revenue and Enterprise Services to obtain a Certificate of Authority (NJ-REG form). This allows you to collect and remit sales tax. Even if Airbnb handles tax remittance for platform bookings, you need this registration for direct bookings and general compliance.

Step 4: Obtain local permits. Each municipality has its own permitting process. Jersey City requires an application to the Division of Housing Preservation. Cape May requires a rental license and safety inspection. Asbury Park requires registration with the city clerk. Budget 2-8 weeks depending on the municipality and whether inspections are involved.

Step 5: Secure appropriate insurance. New Jersey doesn’t mandate a specific coverage amount at the state level, but many municipalities require proof of liability insurance as part of the permitting process. Regardless of local requirements, carry at least $1 million in liability coverage. See the insurance section below for specifics.

Step 6: Set up your property. New Jersey guests — particularly shore visitors — expect clean, updated properties with beach essentials (towels, chairs, umbrellas, outdoor showers). For NYC overflow markets, focus on transit information, fast WiFi, and workspace setups. Every property needs working smoke detectors, CO detectors, and a fire extinguisher per New Jersey fire code.

Step 7: Create optimized listings. Professional photos are mandatory in competitive NJ markets. Highlight specific proximity details: “8-minute walk to the boardwalk,” “2 blocks from the PATH station,” “ocean view from the master bedroom.” Generic descriptions get buried. Use dynamic pricing from day one — New Jersey’s market swings between peak and off-season are too dramatic for static rates.

Step 8: Build your operations system. Reliable cleaning teams are the bottleneck in shore markets during summer turnover days (typically Saturday). Book your cleaning crew before you book your first guest. Set up automated messaging, digital locks for self-check-in, and a local point of contact for emergencies. If you’re running multiple properties, consider a property management platform like Hospitable or Guesty.

Step 9: Launch and optimize. Start with competitive pricing to build reviews — 10-15% below comparable listings for your first 5-10 bookings. Respond to every inquiry within an hour. After hitting Superhost status (or 10+ five-star reviews), raise rates to market level. Monitor your STR performance relative to local comps quarterly.

Step 10: Scale with intention. New Jersey’s market diversity means your second property doesn’t have to be in the same town as your first. Some operators run a year-round Jersey City unit alongside a seasonal Shore property — the JC unit covers fixed costs while the Shore property generates peak-season profit. That portfolio approach smooths out the seasonal volatility that trips up single-market operators.

New Jersey STR Insurance and Liability

New Jersey doesn’t have a state-mandated insurance minimum for STR operators, but many municipalities require proof of liability coverage as part of permitting. Regardless of what your local government requires, operating without adequate insurance in New Jersey is a risk you don’t want to take.

The state’s litigious environment — New Jersey consistently ranks among the top 10 states for personal injury lawsuits — makes liability coverage essential. A guest injury at your property without proper insurance could expose you to personal financial ruin.

Here’s what to understand about STR insurance coverage:

Standard homeowner’s/renter’s insurance won’t cover you. Most policies in New Jersey explicitly exclude “business activity” from coverage. Running an Airbnb qualifies as business activity. If you file a claim related to a guest incident, your insurer can deny it and potentially cancel your policy for misrepresentation.

What you need:

• $1 million minimum general liability coverage
• Property damage coverage for furnishings and guest-caused damage beyond what Airbnb’s AirCover addresses
• Loss of rental income coverage in case of property damage or forced closure
• For shore properties: flood insurance (many coastal NJ properties are in FEMA flood zones)
• For properties with pools, hot tubs, or fire pits: verify your policy specifically covers these amenities (they’re common exclusions)

Flood insurance is critical for shore properties. Standard liability policies don’t cover flood damage. If your property is in a FEMA-designated flood zone (check at fema.gov/flood-maps), you’ll need a separate flood policy through the National Flood Insurance Program or a private carrier. Superstorm Sandy in 2012 devastated uninsured NJ shore properties — that lesson is still fresh for experienced operators.

Specialized STR insurance providers like Proper Insurance, Safely, and CBIZ offer policies designed for short-term rental operators. Expect to pay $1,200-$3,000 annually per property, with shore properties at the higher end due to flood and storm risk.

Why 10XBNB Gives You the Edge in New Jersey

New Jersey’s STR market looks simple on the surface — Shore towns in summer, NYC overflow year-round. But the operators who actually profit here are the ones who understand the layers: municipal permit limits that cap your competition (if you get in early), tax structures that need to be baked into pricing from the start, seasonal revenue curves that require completely different strategies for winter versus summer.

The 10XBNB program teaches these exact strategies. Students learn how to identify properties with the strongest arbitrage margins, negotiate leases with STR-friendly clauses, build operational systems that handle high-volume summer turnovers, and construct portfolios that balance seasonal and year-round markets.

New Jersey rewards operators who treat STR hosting as a business, not a side hustle. The permit systems, tax compliance, and competitive dynamics all favor people who have a system. Hosts who try to figure it out through trial and error typically burn through their first lease before they find their footing. That’s an expensive education when a two-bedroom shore rental runs $2,500/month.

The real advantage in New Jersey isn’t finding a good market — there are several. The advantage is executing correctly from day one: getting permitted before caps fill, pricing for the tax burden, building a cleaning operation that can handle Saturday turnovers at scale, and knowing which municipalities to avoid entirely. That’s what separates profitable operators from hobbyists who break even.

Frequently Asked Questions

Do I need a permit to run an Airbnb in New Jersey?

It depends on your municipality. New Jersey doesn’t have a statewide STR permit requirement, but most cities and towns with active STR markets have their own permitting systems. Jersey City, Cape May, Asbury Park, and most LBI municipalities require local permits or licenses. You also need to register with the NJ Division of Revenue for tax purposes regardless of location. Always check with your specific municipal clerk’s office before listing a property.

How much tax do New Jersey Airbnb hosts pay?

At the state level, hosts owe 6.625% sales tax plus a 5% state occupancy fee — totaling 11.625%. Many municipalities add their own occupancy tax on top. Jersey City adds 6%, making the total 17.625%. Some shore towns add 2-3%. Airbnb and Vrbo collect and remit state taxes automatically, but municipal taxes may require separate registration and payment.

Is rental arbitrage legal in New Jersey?

Rental arbitrage — leasing a property long-term and subletting it as a short-term rental — is legal in New Jersey provided you have your landlord’s written permission, comply with local STR regulations, and hold all required permits. The key is getting explicit subletting permission in your lease. Some municipalities like Jersey City have specific permit categories for non-owner-occupied rentals with limited availability. Always verify both your lease terms and local ordinances.

What’s the best area in New Jersey for Airbnb?

It depends on your operating model. For year-round consistency and arbitrage opportunities, Jersey City is the strongest market — high occupancy, proximity to NYC, and predictable demand. For peak-season revenue, Cape May and LBI generate the highest ADRs but concentrate income into summer months. Asbury Park offers a middle ground with strong summer performance and growing off-season demand. Atlantic City works well for budget-friendly properties targeting casino and event visitors.

Do I need flood insurance for a Jersey Shore Airbnb?

If your property is in a FEMA-designated flood zone — and many Jersey Shore properties are — flood insurance is strongly recommended even if not legally required for your specific situation. Standard liability and property insurance policies exclude flood damage. The National Flood Insurance Program provides coverage, as do some private carriers. After Superstorm Sandy, lenders typically require flood insurance for mortgaged properties in designated flood zones along the NJ coast.

Can I run an Airbnb in a New Jersey condo?

Potentially, but you must check your condo association’s bylaws and CC&Rs (Covenants, Conditions & Restrictions) first. Many NJ condo associations — particularly in shore towns and urban high-rises — explicitly prohibit or restrict short-term rentals. Even if your municipality permits STRs, your condo association can ban them. Some associations allow rentals with minimum stay requirements (often 7 or 30 days). Review your governing documents carefully and, if unclear, request a written opinion from the association’s management company before investing.