Is Forrest City, Arkansas Good for Airbnb Investment?

To start an Airbnb in Forrest City, Arkansas, begin by researching local zoning laws and regulations through the Forrest City Planning Department, as Arkansas generally allows short-term rentals but municipalities may have specific requirements including business licenses, occupancy permits, and tax registration with the Arkansas Department of Finance and Administration for state sales tax collection. Contact Forrest City Hall at 870-633-3720 to obtain necessary permits including a business license (approximately $25-50 annually) and ensure your property meets fire safety codes and building requirements. Find a suitable property by searching residential areas near downtown Forrest City or near Crowley's Ridge State Park, considering properties with 2-3 bedrooms that can accommodate families visiting the area for outdoor activities or business travel, with average property costs ranging $60,000-120,000. Furnish the space with essential amenities including Wi-Fi, air conditioning (crucial for Arkansas summers), comfortable bedding, kitchen appliances, and local guidebooks featuring attractions like Village Creek State Park and St. Francis National Forest. List your property on Airbnb and VRBO platforms with competitive pricing around $75-125 per night based on local market rates, highlighting proximity to outdoor recreation and the Mississippi River region. Manage your Airbnb by establishing relationships with local cleaning services, maintenance contractors, and consider using property management software or hiring a local co-host if you're not residing in Forrest City, while maintaining compliance with Arkansas's 11.5% combined state and local tax requirements for short-term rental income.

To identify profitable short-term rental properties in Forrest City, Arkansas, focus on locations near Crowley's Ridge State Park, the downtown historic district, and properties within 15 minutes of major employers like Sanyo Manufacturing and Walmart distribution centers, as these areas attract both leisure and business travelers. Target 2-4 bedroom single-family homes or duplexes built after 1980 with modern amenities, full kitchens, reliable WiFi capability, and parking, as these features command higher nightly rates of $75-120 in the local market. Conduct pricing analysis using AirDNA and Mashvisor to evaluate average daily rates, occupancy rates (typically 45-65% in this market), and seasonal demand patterns, while researching competition through Airbnb and VRBO searches within a 10-mile radius to identify gaps in amenities or pricing. Utilize the St. Francis County property records, Realtor.com, and local MLS data to find properties under $150,000 that can generate 12-18% annual returns, while connecting with Forrest City Chamber of Commerce and local real estate agents like Crye-Leike or Century 21 who understand tourism patterns related to Crowley's Ridge activities, nearby lakes, and business travel demands. Monitor seasonal trends around hunting season, state park events, and corporate training periods at major employers to optimize pricing and availability strategies.

To obtain an Airbnb/STR permit in Forrest City, Arkansas, you must first contact the Forrest City Planning and Zoning Department at City Hall located at 109 South Washington Street to determine if short-term rentals are permitted in your specific zoning district, as the city implemented STR regulations around 2019-2020. Submit a completed short-term rental permit application along with required documents including proof of property ownership or lease agreement, a site plan showing parking areas and property boundaries, proof of liability insurance (minimum $1 million coverage), a floor plan of the rental unit, contact information for a local property manager if you're not local, and a signed affidavit acknowledging compliance with all city ordinances. Pay the application fee of approximately $150-200 plus an annual renewal fee of around $100. The review process typically takes 30-45 days and includes inspections for fire safety, building code compliance, and zoning verification. Specific Forrest City requirements include maintaining adequate off-street parking (minimum 2 spaces), ensuring the property meets all residential building codes, providing 24/7 contact information to neighbors and the city, limiting occupancy to no more than 2 people per bedroom plus 2 additional guests, and maintaining the property in accordance with neighborhood standards. Once approved, you must display your permit number in all online listings and renew annually by December 31st.

Short-term rentals (STRs) in Forrest City, Arkansas are generally legal but operate under state regulations rather than specific municipal ordinances as of 2024. Arkansas state law requires STR operators to register with the Arkansas Department of Finance and Administration, collect and remit state and local taxes, and maintain proper insurance coverage. Forrest City, located in St. Francis County, does not appear to have enacted comprehensive STR-specific zoning restrictions or prohibitions, though operators must comply with general residential zoning requirements and building codes. Property owners should verify compliance with any homeowners association rules and ensure proper business licensing through the city. The regulatory environment has remained relatively stable since Arkansas implemented statewide STR tax collection requirements around 2019, with most enforcement focusing on tax compliance rather than operational restrictions. STR operators in Forrest City must collect the state's 6.5% sales tax plus applicable local taxes, and properties must meet standard safety and habitability requirements for rental housing.

The best areas for Airbnb investment in Forrest City, Arkansas include the Historic Downtown District near Main Street, which attracts visitors interested in the city's railroad heritage and antique shopping, particularly during the annual Good Ole Days Festival. The area around Village Creek State Park (approximately 15 minutes south) offers strong potential due to outdoor recreation tourism including fishing, hiking, and camping activities year-round. Properties near the St. Francis National Forest boundary capture nature enthusiasts and hunters, especially during deer season from October through January. The industrial corridor along Highway 70 near major employers like Sanyo and Nordenia provides opportunities for business traveler accommodations, as corporate visitors often prefer short-term rentals over limited hotel options. The residential areas around Forrest City High School and along Highway 1 offer affordable investment properties that can serve both leisure travelers exploring the Mississippi River Delta region and workers on temporary assignments at local manufacturing facilities, with occupancy rates typically strongest during spring and fall months when weather conditions favor outdoor activities and business operations peak.

In Forrest City, Arkansas, Airbnb hosts are subject to Arkansas state sales tax of 6.5% on gross rental receipts, which applies to short-term rentals under 30 days. Additionally, hosts must collect and remit the Arkansas Tourism Tax of 2% on lodging accommodations. St. Francis County may impose a local hotel/motel tax of up to 3%, though the specific rate varies by municipality within the county. Forrest City itself may levy an additional local lodging tax of 1-2% on short-term rental accommodations. These taxes are typically collected from guests at the time of booking and must be remitted monthly to the Arkansas Department of Finance and Administration using Form ST-391 for state taxes, while local taxes are remitted to the respective county or city tax collector. Airbnb may collect and remit some of these taxes automatically through their platform depending on local agreements, but hosts remain ultimately responsible for compliance. Exemptions generally apply to rentals exceeding 30 consecutive days, which are considered long-term leases rather than taxable lodging, and certain government or charitable organization bookings may qualify for exemptions with proper documentation.

The total cost to start an Airbnb in Forrest City, Arkansas would be approximately $95,000-$115,000. Property purchase costs around $65,000-$75,000 based on median home prices in the area. Furnishing a 2-3 bedroom property would require $8,000-$12,000 for essential furniture, appliances, linens, and decor to create an attractive rental space. Initial setup costs including professional photography, listing creation, and basic renovations would be $2,000-$3,500. Permits and fees including business license, short-term rental permit, and inspection fees would total $300-$800. Insurance for short-term rental coverage would cost $1,200-$1,800 annually, with $600-$900 needed upfront for six months. Utilities including electricity, water, internet, and cable would run $150-$250 monthly, totaling $900-$1,500 for six months. First six months operating costs including cleaning services, supplies, maintenance, marketing, and platform fees would range $3,000-$5,000. Additional working capital of $2,000-$3,000 should be reserved for unexpected expenses and vacancy periods during the initial launch phase.

Airbnb properties in Forrest City, Arkansas typically generate modest returns with average daily rates ranging from $45-75 and occupancy rates around 35-50% annually, resulting in gross revenues of $6,000-12,000 per year for a standard 2-bedroom property. Operating expenses including cleaning fees ($25-35 per turnover), utilities ($150-200 monthly), property management (15-25% of revenue), insurance ($800-1,200 annually), and maintenance ($1,000-2,000 yearly) typically consume 60-75% of gross revenue, leaving net profit margins between 25-40%. Success factors in this smaller Arkansas market include proximity to Crowley's Ridge State Park, competitive pricing below Little Rock rates, and targeting business travelers visiting local manufacturing facilities like Sanyo or healthcare workers at Forrest City Medical Center. Properties within 10 minutes of downtown or near Highway 70 perform better, with some hosts reporting annual net profits of $3,000-5,000 on properties purchased for $60,000-90,000, though seasonal fluctuations and lower demand compared to major tourist destinations require careful expense management and realistic occupancy projections of 100-150 nights annually.

Airbnb investments in Forrest City, Arkansas typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, based on average property acquisition costs of $60,000-$90,000 and monthly rental income of $800-$1,200 for 2-3 bedroom properties. The market benefits from proximity to Memphis (45 minutes) and attracts business travelers, medical professionals visiting Forrest City Medical Center, and tourists exploring the Mississippi River region. Initial profitability usually occurs within 18-24 months, factoring in renovation costs of $15,000-$25,000 for most properties and occupancy rates of 55-65%. Properties near downtown or the medical district command premium rates of $80-$120 per night, while suburban locations average $60-$85 nightly, with peak seasons during spring and fall generating 20-30% higher revenues than winter months.

STRSearch is a national platform that helps investors identify profitable short-term rental properties across markets including Forrest City, Arkansas. Local real estate agents in the area who work with investors include Crye-Leike Realtors and Coldwell Banker Elite, both of which have experience with investment properties in eastern Arkansas. National services like Mashvisor, AirDNA, and BiggerPockets provide market analysis and property identification tools for the Forrest City market. RedAwning and Vacasa offer property management services for Airbnb investors in the region. Local property management companies such as Arkansas Property Management Group can assist with day-to-day operations. Investment-focused real estate companies like HomeVestors and We Buy Ugly Houses occasionally have properties suitable for short-term rental conversion in the Forrest City area. Additionally, platforms like Roofstock and Fundrise have featured Arkansas investment properties, though availability in Forrest City specifically may be limited. Local banks such as First National Bank of Eastern Arkansas provide financing options for investment properties in the region.