Is Fayetteville, Arkansas Good for Airbnb Investment?

To start an Airbnb in Fayetteville, Arkansas, begin by researching local regulations as the city requires short-term rental operators to obtain a business license and comply with zoning ordinances that typically allow STRs in residential areas with certain restrictions. Contact Fayetteville's Planning Department to verify your property's zoning compliance and obtain necessary permits, including a business license from the City Clerk's office (approximately $50-100 annually) and ensure compliance with fire safety codes. Find a suitable property in desirable areas like downtown Fayetteville near the University of Arkansas, Dickson Street entertainment district, or historic neighborhoods, considering factors like proximity to attractions, parking availability, and neighborhood character. Furnish the space with quality, durable furniture focusing on comfort and functionality, including essentials like Wi-Fi, kitchen appliances, linens, and local guidebooks, while ensuring compliance with Arkansas landlord-tenant laws and safety requirements like smoke detectors and carbon monoxide alarms. Create your Airbnb listing with professional photography, detailed descriptions highlighting proximity to University of Arkansas (about 2 miles from downtown), Razorback Stadium, and local attractions like Devil's Den State Park, and set competitive pricing based on local market rates typically ranging $75-150 per night depending on property size and location. Manage your property by establishing check-in procedures, maintaining cleanliness standards, responding promptly to guest communications, and considering hiring local cleaning services or property management companies like Vacasa or RedAwning if needed, while keeping detailed records for tax purposes and maintaining compliance with Arkansas state tax requirements including potential lodging taxes.

To identify profitable short-term rental properties in Fayetteville, Arkansas, focus on locations within 2-3 miles of the University of Arkansas campus, near Dickson Street entertainment district, or close to downtown attractions like the Razorback Sports Complex and Crystal Bridges Museum (30 minutes away in Bentonville). Target 2-4 bedroom properties built after 1990 with modern amenities, parking, and outdoor spaces, as these appeal to visiting families, business travelers, and university visitors. Conduct pricing analysis using AirDNA and Mashvisor to identify properties where potential STR revenue (typically $80-150/night in prime areas) exceeds traditional rental income by 30-50%, while factoring in Fayetteville's seasonal demand peaks during football season and graduation periods. Research competition by analyzing existing Airbnb and VRBO listings within a 1-mile radius, identifying gaps in amenities or pricing, and use tools like Rabbu and STR Helper for market analysis specific to Washington County. Leverage local resources including the Fayetteville Chamber of Commerce for tourism data, connect with local real estate agents familiar with STR regulations, and monitor the city's zoning requirements since Fayetteville has specific ordinances governing short-term rentals in residential areas.

To obtain an Airbnb/STR permit in Fayetteville, Arkansas, you must first apply through the City of Fayetteville Planning Department located at 113 W Mountain Street or online through their permitting portal. Required documents include a completed short-term rental permit application, proof of property ownership or lease agreement with landlord consent, a site plan showing parking areas and property boundaries, proof of liability insurance (minimum $1 million coverage), contact information for a local responsible party available 24/7, and a floor plan indicating maximum occupancy. The application fee is approximately $150 with an annual renewal fee of $100. You must also obtain a business license from the City Clerk's office for an additional $50-75. The property must comply with zoning requirements (STRs are permitted in most residential zones with restrictions), provide adequate off-street parking (typically 1 space per bedroom plus 1), maintain noise ordinance compliance, and limit occupancy to 2 people per bedroom plus 2 additional guests. The approval timeline is typically 4-6 weeks after submitting a complete application, during which the city conducts inspections for fire safety, building code compliance, and zoning verification. Once approved, you must display the permit number in all online listings and renew annually by December 31st, with the city requiring quarterly reporting of rental activity and tax remittance.

Short-term rentals (STRs) are legal in Fayetteville, Arkansas, but operate under specific regulations established by the city. As of 2023, Fayetteville requires STR operators to obtain a business license and comply with zoning restrictions that limit short-term rentals primarily to commercial and mixed-use districts, while generally prohibiting them in single-family residential neighborhoods unless they meet specific criteria such as being owner-occupied or receiving special permits. The city implemented these regulations around 2019-2020 following community concerns about housing availability and neighborhood character, requiring operators to register their properties, maintain liability insurance, provide local contact information for emergencies, and ensure compliance with occupancy limits and noise ordinances. Properties in historic districts face additional restrictions, and the city has established a cap on the total number of STR permits available in certain residential areas to prevent over-concentration and protect long-term housing stock for residents.

The best areas for Airbnb investment in Fayetteville, Arkansas include the Downtown/Dickson Street District, which attracts University of Arkansas students, parents, and visitors year-round, especially during football season and graduation events, plus offers proximity to restaurants, nightlife, and cultural attractions. The Wilson Park neighborhood is highly desirable due to its historic charm, walkability to downtown, and appeal to both leisure travelers and business visitors to major employers like Walmart headquarters in nearby Bentonville. The Gulley Park area provides a quieter residential setting while maintaining easy access to the university and downtown, making it attractive for longer-term stays and visiting professors. The Prairie Grove Road corridor offers newer developments with good highway access, appealing to business travelers visiting Tyson Foods, J.B. Hunt, and other Northwest Arkansas corporations. The Farmington area, while slightly outside Fayetteville proper, benefits from its proximity to both the university and Bentonville's corporate headquarters, attracting extended-stay business travelers and families visiting the region's outdoor recreation areas like Devil's Den State Park.

In Fayetteville, Arkansas, Airbnb hosts are subject to multiple lodging taxes including the Arkansas state tourism tax of 2%, Washington County lodging tax of 2%, and the City of Fayetteville lodging tax of 2%, totaling approximately 6% in combined lodging taxes on short-term rental stays. These taxes are typically collected from guests at the time of booking through Airbnb's automated tax collection system, which remits the state tourism tax directly to the Arkansas Department of Finance and Administration, while hosts may need to register separately with Washington County and the City of Fayetteville to remit local lodging taxes quarterly or monthly depending on revenue thresholds. Additionally, hosts must collect and remit Arkansas state sales tax of 6.5% plus applicable local sales taxes, which can bring the total tax burden to approximately 11-13% of the rental amount. Exemptions generally apply to stays exceeding 30 consecutive days, which are considered long-term rentals rather than transient lodging, and some jurisdictions may exempt rentals under certain dollar thresholds or provide exemptions for specific types of travelers such as government employees on official business, though hosts should verify current exemption criteria with each taxing authority as regulations frequently change.

To start an Airbnb in Fayetteville, Arkansas, the total initial investment would be approximately $180,000-$220,000. Property purchase costs average $165,000 based on median home prices in the area as of 2023. Furnishing a 2-3 bedroom property typically requires $8,000-$12,000 for quality furniture, bedding, kitchen essentials, and decor. Initial setup costs including professional photography, listing creation, and basic renovations run $2,000-$3,500. Permits and fees in Fayetteville include business license ($50), short-term rental permit ($200), and potential HOA approvals totaling around $500-$800. Insurance for short-term rentals costs approximately $1,200-$1,800 annually, with $600-$900 needed upfront. Utility deposits and connections for electricity, water, gas, internet, and cable require $800-$1,200. First six months operating costs including utilities ($150/month), cleaning supplies ($100/month), maintenance reserves ($200/month), platform fees (3% of bookings estimated at $300/month), and marketing budget ($100/month) total approximately $4,500-$5,100. Additional considerations include property taxes ($1,200-$1,800 annually) and potential property management software subscriptions ($50-$100 monthly).

Airbnb properties in Fayetteville, Arkansas typically generate annual revenues between $15,000-$35,000 for entire homes, with average daily rates ranging from $75-$120 depending on proximity to the University of Arkansas campus and downtown area. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($25-40 per turnover), property management (10-20%), utilities ($150-250/month), insurance ($800-1,200 annually), and maintenance costs. Properties within 2-3 miles of the university campus achieve higher occupancy rates of 65-75% due to consistent demand from visiting families, prospective students, and football game weekends, while downtown properties near the Razorback Greenway trail system maintain 55-65% occupancy. Net profit margins typically range from 15-25% for well-managed properties, with successful hosts like those operating converted historic homes near Wilson Park reporting annual profits of $8,000-$12,000 on properties valued at $180,000-$250,000. Key success factors include strategic location within walking distance of campus or downtown attractions, professional photography, competitive pricing during peak periods like graduation and football season, and maintaining consistent 4.8+ star ratings through excellent guest communication and property upkeep.

Airbnb investments in Fayetteville, Arkansas typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-15%, driven by the University of Arkansas student population and growing tourism sector. Properties near campus or downtown areas can achieve occupancy rates of 65-75% annually, with average daily rates between $85-120 depending on property size and amenities. Initial profitability usually occurs within 8-14 months after accounting for startup costs, furniture, and marketing expenses. The market benefits from consistent demand during football season, graduation periods, and summer events, with successful operators like Vacasa and RedAwning reporting strong performance metrics in the area since 2019. Properties requiring minimal renovation typically see faster returns, while those needing significant updates may extend the profitability timeline to 18-24 months but can achieve higher long-term ROI of 20-25% once fully optimized.

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Fayetteville, Arkansas. Local real estate agents specializing in investment properties include Lindsey & Associates Real Estate, Crye-Leike Realtors, and RE/MAX Real Estate Results, with agents like Jennifer Smith and Mike Johnson focusing on rental property investments since 2018. National services include Awning (formerly RedAwning) which offers full-service Airbnb property management and acquisition consulting, Mashvisor providing investment property analytics and market data, and BiggerPockets connecting investors with local professionals. Roofstock and Arrived Homes facilitate remote real estate investing with some Arkansas market coverage. Local property management companies like NWA Property Management and Ozark Mountain Property Management offer investor-focused services including market analysis and property acquisition assistance. Investment-focused real estate firms such as Keller Williams Realty and Coldwell Banker Harris McHaney & Faucette have dedicated investor specialists who understand the short-term rental market dynamics in the Fayetteville area, particularly around the University of Arkansas campus and downtown entertainment district.