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Last updated: March 22, 2023

Short-Term Rental Report: The State of New Jersey STRs in 2023, Part 2

Here's how municipalities in the Cape May County area are faring with the influx of properties rented out through online platforms.
Posted by Maureen Murray
Waterfront homes in Avalon, New Jersey

This article is part of an ongoing series of reports on the state of short-term rentals (STRs) in the United States. You can view our other reports here. Part 1 of our New Jersey STR report is available here.

Download the GovOS Local Government Guide to STRs

New Jersey is known for its beautiful beaches and resort areas and vacationers returned en masse in 2022 after riding out the pandemic for the previous two years. Cape May County is known as “The Jersey Cape” because of its miles of beaches, boardwalks, and other attractions that have continued to engage generations of families for years. The county is also known for its wineries and the Cape May County Park and Zoo.

Cape May, the southernmost county in New Jersey, has plenty of oceanfront resorts and 30 miles of beaches. Tourism is the county’s largest revenue producer, and leisure and hospitality make up the largest employment sector.

As a general rule, all transient accommodation in New Jersey is subject to STR taxes at a minimum rate of 11.625%. This rate consists of the state sales tax (6.625%) and the state occupancy fee (5%). Cape May also charges a 3% municipal tax on STRs.

Avalon

Comprised of seven miles of beautiful beaches, Avalon is known as a South Jersey seashore resort, with the motto “Cooler by a Mile” since it juts out into the Atlantic Ocean about a mile farther than other barrier islands. All rental units in Avalon are subject to inspection and licensing requirements, along with an annual fee and fire inspection.

Brigantine

Named one of the “12 most charming towns in NJ,” Brigantine has something for everyone with its beaches, museums, and cultural events, including plenty of opportunities for outdoor adventures. All active STRs are required to be registered and approved for licensing after an inspection, and a decal must be affixed to each rental unit attesting to the fact that the property is licensed.

Cape May

Known for its large and colorful Victorian homes, eclectic shops along Washing Street Mall, and numerous restaurants, this southernmost New Jersey beach resort is home to hundreds of STRs as alternatives to the many hotels and B&Bs in the town.

All rental properties, or properties containing rental units, including resort houses, are subject to licensing and inspection by the city. Separate registration is required for each unit made available for rent.

Street view of homes in Cape May New Jersey

Ocean City

Located at the northern tip of Cape May County, Ocean City is the top place Airbnb guests booked their fall travel in 2022 and its boardwalk was named Best In NJ by New Jersey Monthly Magazine. Ocean City consists of eight miles of pristine beaches and more than two miles of exciting boardwalk with a wholesome family atmosphere. All residential rental properties are required to obtain a Mercantile License, also known as a Rental Registration.

Sea Isle City

Sea Isle City is a family-friendly seaside resort with five miles of beautiful sandy beaches and a promenade that spans 30 blocks. Home to one of the largest Polar Bear Plunges on the East Coast, thousands of residents and visitors return in February for a cold dip in the Atlantic Ocean. All rental properties are required to have a Municipal Mercantile Rental Permit, whether the owner rents out the property on their own, uses a local realtor, or uses an online vacation rental site such as Vrbo or Airbnb.

Wildwood

Famous for its free, wide and white sandy beaches and its mile-and-a-half-long boardwalk, “Wildwood by the Sea” is a fun-filled family vacation destination. Whale-watching tours, charter fishing boat trips, affordable accommodations and plenty of seafood restaurants have lured families here for generations. All rental properties, including STRs, located in Wildwood are required to be inspected and licensed annually by the city.

North Wildwood

Vacationers who come back to North Wildwood each year do so because of the beautiful, wide, and sandy beaches that are free to beachgoers–no beach tags needed. North Wildwood is also known for some of the best salt-water fishing along the entire east coast and its boardwalk, which is shared with Wildwood.

There is a rental permit that rental property owners must apply for annually listing the number of sleeping rooms and sleeping accommodations in each room. Permittees must keep a register on the premises with the names, addresses, telephone numbers, and rental period for all registered tenants. It is unlawful for the permittee to allow gatherings of persons on premises in excess of the maximum occupancy limit.

Stone Harbor

A quiet family resort, Stone Harbor has a 21-acre bird sanctuary that is registered as a National Landmark by the National Park Service. Beautiful beaches, fine dining and shopping have been luring visitors to this quant little town for more than 75 years. And the resort is pet friendly, giving dogs and their families access to the beach between 80th and 83rd streets for leashed canines, before 9:00 a.m. and from 6:00 p.m. until dusk. All rental units need to be inspected and licensed and there are minimum occupancy area requirements based on the number of occupants.

Ventnor City

Located in Atlantic County, New Jersey, Ventnor City, located on the South Jersey Shore, is close to Atlantic City but far enough away to give you the feeling of a true coastal community. Beautiful beaches and proximity to Philadelphia and New York City make this a desirable vacation spot as well as home to its 9,200 residents. Ventnor requires STR property owners to purchase a mercantile license for $100 per year if they use online rental platforms.

Cape May County STR Demand Continues to Grow. Can your local government handle this growth?

The rental market in Cape May County and the Jersey shore remains in demand and visitors can expect above-average rent price gains in 2023.

You can stay connected with your STR owners with a dynamic software solution. Find out how you make data-driven decisions with a simplified STR management solution available through GovOS.

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