About to buy first STR- input needed on town ordinances

[Kristen Honsinger]

My husband and I made an offer on our first investment property which was accepted this weekend. It's a home in a very seasonal market- Bar Harbor, Maine- and we intend to use it as a STR. There is a proposal to limit STRs in Bar Harbor that will be voted on in early December and I wanted to get opinions about how this could potentially affect us.

As background, we live in Texas but our family all live in New England within a few hour radius of Bar Harbor. We fly up regularly so our young kids can see cousins& grandparents, and when we do, we end up typically renting a short term rental in costal Maine large enough to accommodate the whole family. The place we found Bar Harbor would be big enough for that and save us probably 10k+ annually. It is in our five year plan to move to the area.
We both have a high W2 income and bring in close to 7 figures per year combined. One of the main reasons we are interested in doing an STR is the tax benefits- we paid over $340k in taxes last year with essentially no write offs. This larger home would cost us $1.1 million+ all closing costs and start up costs to make it STR- ready (it comes partially furnished and needs no renovations).
We would be able to close mid-November and the town is set to vote on an ordinance in early December which would essentially not allow new STRs at this time. Currently 12% of dwelling are STRs and they want to cap it at 9%, so no new permits will be issued until about 25% of all units drop off the market (who knows who long this will be- but I anticipate it would be a very long time). Anyone who had a current STR would be grandfathered in, and this would include us as we would be able to get the current owner’s permit transferred to us.
So, we would sneak in just under the wire on that- but if this passes, after early December, we could not transfer the permit to anyone, including our children and any potential buyers, should we decide to sell. This is what gets us… the possible effect on property values. It would in theory be great for STR income by limiting supply, I’d think.
We foresee buying and holding indefinitely, but of course we are also thinking about exit strategies should something catastrophic happen. We can easily cover the mortgage with our W2 income and we anticipate we will cover the mortgage and then some with the STR income (it has a track record of this with current owners and also comparing data from surrounding comps). We are just getting caught up about how this might affect us if we needed to sell for some unforeseen reason. Of course, we could also take the loss as a write off.
Sorry for the long post- would greatly appreciate thoughts from those more experienced than we are! I think I’m partially getting cold feet/the typical first-time buyers nerves but I want to make sure we’re not missing anything. Thanks in advance.