Is your Hamptons home pulling its weight as a short-term rental, or leaving money on the table? If you split time between Manhattan and Suffolk County, you want a clear, confident view of returns before you adjust pricing, renovate, or refinance. In this guide, you will learn how to model revenue by season, build a clean expense budget, stress test risk, and make a smart go or no-go decision. Let’s dive in.

Hamptons demand and seasonality

High season in the Hamptons is short and powerful. Most demand concentrates from late June through Labor Day, with July and August at the top. Shoulder months like May, early June, and September add bookings at lower rates. From October through April, many properties see limited activity, with exceptions like Montauk and select winter escapes.

Your revenue will rise and fall with this calendar. That means pricing, minimum stays, and owner calendar choices during peak weeks have an outsized impact on your annual return. Beach access, proximity to train or ferry, and village reputation also shape your average daily rate and occupancy.

What drives revenue

A few factors do most of the heavy lifting in your model:

• ADR by month. Your average daily rate in summer sets the ceiling for the year.
• Occupancy by month. Peak months can fill up, while winter may be slow.
• Owner use days. Personal weeks cut into rentable nights and potential income.
• Minimum stays. Longer minimums can raise ADR and reduce turnover costs but may lower total booked nights.
• Location and amenities. Beach proximity, a pool, AC, parking, and walkability support higher pricing.

Use local comps from short-term rental platforms and specialized market data to set realistic monthly ADR and occupancy curves by village or zip code.

Build your ROI model

Start with a simple, repeatable structure so you can update it each season.

Step 1: Set rentable nights

• Rentable nights = 365 minus owner use days minus maintenance or blocked days.
• Keep a buffer for repairs and deep cleans during the year.

Step 2: Create a seasonal ADR schedule

• Set ADR for peak months, shoulder months, and off season.
• Use local comparables for each month, not annual averages.

Step 3: Estimate monthly occupancy

• Apply an occupancy percentage to each month using comps and manager input.
• Remember that weekends often outperform weekdays.

Step 4: Calculate gross rental revenue

• For each month: ADR x rentable nights x occupancy.
• Sum the months to get annual gross rental revenue.

Step 5: Deduct operating costs to get NOI

• Subtract platform fees, management fees, cleaning and linens, utilities, insurance, property taxes, HOA, routine maintenance, reserves, and relevant sales or occupancy taxes.
• Net Operating Income is your main performance indicator before debt service and capital projects.

Step 6: Layer in debt and taxes

• Apply annual debt service and any planned capital expenditures.
• Estimate after-tax cash flow with your CPA. Factor in vacation home rules and depreciation.

Step 7: Compute returns

• Cap rate = NOI divided by purchase price or current market value.
• Cash-on-cash = annual pre-tax cash flow divided by your invested equity.
• Track both so you can compare options over time.

Estimate costs and reserves

Your expense lines will vary by property type, village, and service level. Underwrite with care and local quotes.

• Property management. Expect 20 to 35 percent of gross bookings for full-service short-term management. Limited service costs less.
• Platform host fees. Many hosts pay about 3 percent on some platforms, plus payment processing. Confirm current platform terms.
• Cleaning and linen. Turnover costs can range from roughly 150 to 600 plus per stay depending on size and luxury level. Include laundry and supplies.
• Utilities. Plan for summer AC, pool pumps, water or septic, and high-speed internet. Hot months can increase bills.
• Insurance. A short-term rental policy or endorsement and a liability umbrella are common. Coastal homes may also need flood coverage.
• Property taxes and HOA. Suffolk County taxes are a material line item. Confirm exact amounts for your parcel and any association dues.
• Routine maintenance. A reserve of 5 to 10 percent of gross revenue is a common underwriting practice for short-term rentals.
• Capital reserves. Budget annually for furnishings, HVAC, and major systems. A simple range is 1 to 3 percent of property value per year or a fixed annual amount based on age and amenity intensity.
• Sales and occupancy taxes. Include required taxes in your pro forma. Register and remit per state and county rules.

Pricing and minimum stays

A thoughtful pricing plan helps you capture peak demand without leaving shoulder-season nights empty.

• Use dynamic pricing tools or a manager with day-by-day pricing to reflect weekends and events.
• In high season, set longer minimums for prime weeks. For holiday weeks, consider even longer stays.
• In shoulders, a shorter minimum can pull in more weekend bookings.
• Watch your channel mix. Direct bookings can reduce fees but require more hands-on work.

Permits, taxes, and compliance

Rules vary by town and village in Suffolk County. Before you buy or reposition a home as a short-term rental, contact the specific municipality that governs your address, which may include the Town of Southampton, Village of Southampton, Town of East Hampton, Village of East Hampton, Town of Brookhaven, Town of Southold, or Town of Shelter Island. Ask the zoning and building departments for current short-term rental rules, required permits, inspections, occupancy limits, and enforcement policies.

Short-term rentals are typically subject to New York State sales tax and local transient occupancy or hotel taxes. Hosts generally need to register and remit based on gross receipts. Confirm requirements with the New York State tax authority and the Suffolk County Treasurer or Tax Collector. For federal tax treatment and reporting, review IRS guidance on residence rentals, vacation home personal use thresholds, and deductible expenses with your CPA.

Finally, verify any HOA, condo, or deed restrictions. Many communities limit or prohibit short-term rentals regardless of town rules. A title and covenant review is essential before you commit capital.

Financing and insurance

Lenders treat second homes and investment properties differently. Down payment, rates, and income underwriting can change for short-term rentals. Some lenders use a debt service coverage ratio approach that considers projected rental income, while others want traditional income documentation. Engage lenders early with realistic comps and a clear business plan.

On insurance, coastal exposure drives cost. Flood insurance may be required in FEMA flood zones. Wind and hurricane deductibles can be significant. A liability umbrella is a prudent layer when guests are on site. Price these policies with local carriers during underwriting, not after closing.

Model risks and sensitivity

Your summer is your year. That concentration is both a strength and a risk. Protect your downside by testing multiple scenarios.

• Build base, downside, and upside cases that vary ADR and occupancy by month.
• Quantify owner use tradeoffs by modeling revenue for prime weeks you might keep. Make an intentional choice with full visibility.
• Include a regulatory downside case that caps rental days or requires longer minimum stays.
• Budget for storm events or repair periods that reduce rentable nights and add out-of-pocket deductibles.
• Track competing supply. Renovated listings nearby can pressure ADR or shoulder-season occupancy.

Village examples to compare

Every location has a different revenue curve and cost profile. Use the following as a conceptual map, then replace assumptions with local comps.

Oceanfront luxury in East Hampton

• Profile. Oceanfront or dune-crossing homes with pools and high-end finishes.
• Revenue. Very high ADR in July and August with near full occupancy for prime weeks. Minimal off-season demand.
• Costs. Elevated insurance for flood and wind, higher utilities and maintenance, and larger capital reserves.
• Takeaway. Big upside in hot summers but higher regulatory, insurance, and weather risk.

Village-center house in Sag Harbor or Southampton Village

• Profile. Walkable to shops and dining, easy bay or ocean access.
• Revenue. Strong spring and fall weekends and a steadier shoulder season. Lower ADR than oceanfront, but higher year-round occupancy percentage.
• Costs. Lower coastal insurance than oceanfront and more predictable upkeep.
• Takeaway. Balanced income for owners who value consistent bookings across more months.

Montauk surf destination

• Profile. Surf culture and year-round visitation with an extended fall season.
• Revenue. Strong summer plus durable shoulder season into fall for surfers and anglers. Limited winter opportunities.
• Costs. Standard coastal considerations. Parking and access are important for demand.
• Takeaway. More diversified seasonal income than many South Fork villages.

Cottage or ancillary rental on the North Fork or Shelter Island

• Profile. Smaller markets with winery access and quieter retreats.
• Revenue. Lower peak ADR but longer stays and more consistent off-season weekends.
• Costs. Often lower operating and insurance costs than oceanfront areas.
• Takeaway. A good fit for blended strategies that combine short-term and longer-term stays.

Due diligence checklist

Use this quick list to organize your next steps from data to decision.

• Pull village or zip-level short-term rental data for monthly ADR and occupancy.
• Confirm your town or village short-term rental permit requirements with zoning and building departments.
• Review HOA rules and deed covenants for any rental limits.
• Obtain insurance quotes, including flood and a liability umbrella.
• Get short-term property management proposals and cleaning or linen vendor pricing.
• Build three scenarios with realistic owner use and reserve lines.
• Review tax treatment with a CPA and zoning with a real estate attorney.
• Discuss lender options, including DSCR or portfolio loans, with institutions that understand short-term rentals.

Track the right metrics

Once live, treat your rental like a business. A simple scorecard keeps you honest and helps you improve next season.

• Gross bookings, ADR, and occupancy by month
• Lead time and booking window by season
• Channel mix and conversion rate
• Average length of stay and turnover time
• Revenue per available night
• Net operating income and cash-on-cash return

Next steps and how we help

If you own or are considering a Hamptons property, a clear model can help you set strategy, negotiate financing, and choose the right level of management. It also clarifies if a renovation, amenity upgrade, or repositioning to medium-term stays will improve returns. The key is to price the peak months well and protect your downside with realistic costs and reserves.

You do not need to guess. If you want a discreet, data-forward view tailored to your portfolio, connect with The Saez + Fromm Team for a private conversation about goals, underwriting, and strategy. We can help you pressure test assumptions, weigh options, and position your asset for both lifestyle and financial upside.

FAQs

What months drive most Hamptons rental income?

• July and August generate the highest ADR and occupancy, followed by shoulder periods in May, early June, and September. Off season demand is limited outside of select areas.

How do I estimate ADR and occupancy in Suffolk County?

• Use local short-term rental comps and specialized market data to build a month-by-month ADR and occupancy curve for your village or zip code.

What permits and taxes apply to Hamptons short-term rentals?

• Requirements vary by town and village. Expect registration or permits, inspections, and local occupancy tax in addition to state sales tax. Confirm with your municipality and county tax office.

What is the 14 day IRS rule for vacation homes?

• If you rent your residence for fewer than 15 days in a year, rental income may be tax free. Above that, personal use thresholds can limit certain deductions. Consult a CPA.

What management fee should I expect in the Hamptons?

• Full-service short-term rental management commonly ranges from 20 to 35 percent of gross bookings, with lower rates for limited services.

What insurance do I need for a coastal short-term rental?

• A short-term rental policy or endorsement, a liability umbrella, and possibly flood coverage in FEMA zones. Expect wind and hurricane deductibles on coastal properties.

How should I set summer minimum stays?

• Many hosts use longer minimums for prime weeks and holidays to reduce turnover and protect ADR, then shorten minimums in shoulder months to fill weekends.