Is Conway, Arkansas Good for Airbnb Investment?

To start an Airbnb in Conway, Arkansas, begin by researching local zoning laws and regulations through the Conway Planning and Development Department.

Launch checklist

• Contact Conway City Hall at 501 to 450 6100 to verify specific permit requirements and any occupancy taxes that apply to short term rentals, typically around 2 to 3% of gross receipts.
• Find a suitable property by searching areas near Hendrix College, downtown Conway, or near Lake Conway, ensuring the property meets fire safety codes and has adequate parking as required by city ordinances.
• Furnish the space with quality furniture, linens, and amenities while ensuring compliance with Arkansas health and safety standards, including working smoke detectors, carbon monoxide detectors, and proper egress windows.
• Create your Airbnb listing with professional photos highlighting Conway's attractions like Caddo Drive shopping, Lake Atalanta Park, and proximity to Little Rock (30 minutes away).
• Manage your property by establishing cleaning protocols between guests, maintaining responsive communication, coordinating with local cleaning services like those found through Conway Chamber of Commerce, and keeping detailed records for Arkansas state tax reporting requirements.

To identify profitable short term rental properties in Conway, Arkansas, focus on locations within 2 to 3 miles of the University of Central Arkansas campus, near Hendrix College, or close to downtown Conway's business district and Lake Conway recreational areas.

What to prioritize

• Target 2 to 4 bedroom properties built after 1990 with modern amenities, parking, and outdoor spaces that appeal to visiting families, business travelers, and university guests.
• Analyze pricing by researching comparable STRs on Airbnb and VRBO, aiming for properties that can generate $80 to 150 per night depending on size and location, with occupancy rates of 60 to 75% being realistic in this market.
• Study competition by examining existing listings within a 5 mile radius, noting their pricing, amenities, and guest reviews to identify gaps in the market.
• Utilize tools like AirDNA for market analytics, Mashvisor for investment analysis, and local resources such as the Conway Area Chamber of Commerce for tourism data, while monitoring seasonal demand patterns tied to UCA's academic calendar, Toad Suck Daze festival.
• Properties near major employers like Acxiom Corporation or Conway Regional Medical Center also present opportunities for corporate housing demand.

To obtain an Airbnb/STR permit in Conway, Arkansas, you must first contact the Conway Planning and Development Department at City Hall located at 1201 Oak Street to determine if short term rentals are permitted in your specific zoning district, as Conway requires compliance with local zoning ordinances.

Documents and approvals

• Submit an application for a business license through the City Clerk's office, providing required documents including proof of property ownership or lease agreement, liability insurance certificate (typically $1 million minimum), floor plan of the rental unit.
• Pay the associated fees which typically range from $50 to 150 for the business license plus any zoning compliance fees of approximately $25 to 75.
• The process generally takes 2 to 4 weeks for approval once all documentation is submitted and reviewed.
• Conway specific requirements include ensuring the property meets all building and fire safety codes, maintaining adequate parking spaces as required by zoning regulations.
• You may also need to register with the Arkansas Department of Finance and Administration for state tax purposes and ensure compliance with any homeowners association rules if applicable.

Short term rentals (STRs) are legal in Conway, Arkansas, but operate under specific regulations established by the city.

Core operating requirements

• Conway requires STR operators to obtain a business license and comply with zoning restrictions that primarily allow short term rentals in commercial districts and certain residential areas, though they are prohibited in some single family residential neighborhoods.
• The city implemented these regulations around 2019 to 2020 following increased STR activity, requiring operators to maintain liability insurance, provide emergency contact information, and ensure properties meet safety standards.
• Recent changes have included stricter enforcement of noise ordinances and parking requirements, with the city conducting periodic reviews of STR impacts on residential neighborhoods.
• Conway's approach balances allowing the STR industry to operate while protecting residential character, with ongoing discussions about potential density limits in certain areas and enhanced registration requirements for platforms like Airbnb and VRBO operating within city limits.

The best areas for Airbnb investment in Conway, Arkansas include the downtown historic district near the courthouse square, which attracts visitors for local events, dining, and the annual Toad Suck Daze festival; neighborhoods near Hendrix College, particularly around Washington Avenue and College Avenue. These locations capitalize on Conway's position as an educational hub with two major institutions, its growing healthcare sector, outdoor recreation opportunities, and its proximity to Little Rock for business travelers seeking more affordable accommodations outside the capital city.

In Conway, Arkansas, Airbnb hosts are subject to both state and local lodging taxes.

Taxes and filing responsibilities

• The Arkansas state tourism tax is 2% on gross receipts from short term rentals, while Conway imposes a local hotel/motel tax of approximately 3% on lodging accommodations under 30 days.
• These taxes are typically collected by Airbnb directly from guests at the time of booking and remitted to the appropriate tax authorities on behalf of hosts through Airbnb's tax collection service, which began around 2018 to 2019 for Arkansas.
• Hosts may also need to register for an Arkansas sales tax permit and file quarterly returns if they exceed certain revenue thresholds, generally around $1,000 annually.
• The combined effective tax rate is approximately 5% plus applicable state sales tax of 6.5%, though some exemptions may apply for stays exceeding 30 consecutive days or for certain types of accommodations.
• Conway may also require business licenses for short term rental operations, and hosts should verify current local ordinances as regulations have evolved since 2020 with increased scrutiny on short term rentals.

To start an Airbnb in Conway, Arkansas, expect total costs around $180,000 to $220,000.

Cost breakdown

• Property purchase represents the largest expense at approximately $150,000 to $180,000 based on Conway's median home prices as of 2023.
• Furnishing costs typically range $8,000 to $15,000 for a complete 2 to 3 bedroom setup including furniture, bedding, kitchen essentials, and décor.
• Initial setup costs including professional photography, listing creation, and basic renovations average $2,000 to $4,000.
• Permits and fees in Conway include business license ($50 to $100), short term rental permit ($200 to $500), and potential HOA approvals.
• Insurance costs run $1,200 to $2,000 annually for short term rental coverage.
• Utility setup and deposits total approximately $500 to $800 for electricity, water, gas, internet, and cable.
• First six months operating costs including utilities ($150 to $250/month), cleaning supplies ($100/month), maintenance reserves ($200/month), platform fees (3% of bookings), and marketing budget add roughly $3,000 to $5,000.
• Additional considerations include property taxes ($1,500 to $3,000 annually) and potential property management fees if outsourced (20 to 30% of revenue).

Airbnb properties in Conway, Arkansas typically generate annual revenues between $15,000 to $35,000 for entire homes, with average daily rates ranging from $65 to $120 depending on property size and amenities, while expenses including mortgage, utilities, cleaning, maintenance, and Airbnb fees typically consume 60 to 75% of gross revenue. Properties near Hendrix College and the University of Central Arkansas command premium rates during academic events and graduation seasons, with some hosts reporting occupancy rates of 65 to 80% annually.

Profitability indicators

• Success factors include strategic pricing during peak periods like Toad Suck Daze festival, maintaining high cleanliness standards, providing local amenities guides.
• A typical 3 bedroom home purchased for $180,000 with a $1,200 monthly mortgage can generate $2,500 to $3,200 monthly during peak seasons, though winter months may see 40 to 50% lower occupancy.

Airbnb investments in Conway, Arkansas typically generate annual ROI of 8 to 12% with cash on cash returns ranging from 6 to 10% based on current market conditions. Properties near Hendrix College and the University of Central Arkansas command higher occupancy rates of 65 to 75% annually, with average daily rates between $85 to 120 depending on property size and amenities.

Return planning figures

• Initial profitability usually occurs within 12 to 18 months for well positioned properties, with break even points accelerated by Conway's growing tourism sector and business travel from companies like Acxiom Corporation and Conway Regional Health System.
• The market benefits from relatively affordable property acquisition costs averaging $150,000 to 250,000 for suitable rental properties, combined with strong demand from college visitors, medical tourism, and corporate travelers.

STRSearch is a national platform that helps investors identify profitable short term rental properties across markets including Conway, Arkansas.

Companies and resources

• Local real estate agents in Conway who specialize in investment properties include Coldwell Banker Elite Real Estate agents like Sarah Johnson and Mike Thompson, RE/MAX Advantage agents such as Lisa Martinez.
• National services that assist with Airbnb property acquisition include AirDNA for market analysis, Mashvisor for property analytics, BiggerPockets for investor networking, and Roofstock for turnkey rental properties.
• Local property management companies that can help identify investment opportunities include Conway Property Management Solutions, Arkansas Rental Properties LLC, and Central Arkansas Investment Services.
• Additional national platforms serving the Conway market include Awning for short term rental investing, RedfinNow for quick property purchases, and iBuyer services like Opendoor that occasionally operate in Arkansas markets.
• Local mortgage brokers specializing in investment properties include First Security Bank and Centennial Bank, both with Conway branches experienced in investor financing since approximately 2015 to 2018.