Is Fort Smith, Arkansas Good for Airbnb Investment?

To start an Airbnb in Fort Smith, Arkansas, begin by researching local regulations through the Fort Smith Planning Department and Sebastian County offices, as Arkansas generally allows short-term rentals but municipalities may have specific requirements including business licenses, occupancy permits, and zoning compliance. Obtain necessary permits including a business license from Fort Smith City Hall (estimated $50-100), ensure your property meets fire safety codes, and verify zoning allows short-term rentals in your area. Find a suitable property in popular Fort Smith neighborhoods like Belle Grove Historic District or near the Arkansas River, considering proximity to attractions like Fort Smith National Historic Site and downtown entertainment district, with average property costs ranging $80,000-200,000 depending on size and location. Furnish the space with quality basics including comfortable beds, linens, kitchen essentials, WiFi, and local touches highlighting Fort Smith's frontier history and outdoor recreation opportunities, budgeting approximately $3,000-8,000 for initial furnishing. List your property on Airbnb and other platforms like VRBO with professional photos showcasing Fort Smith's unique character, competitive pricing around $60-120 per night based on local market rates, and detailed descriptions emphasizing proximity to outdoor activities along the Arkansas River and historic attractions. Manage your listing by maintaining consistent communication with guests, coordinating cleaning between stays (budget $30-50 per turnover), monitoring local events like Riverfront Blues Festival that drive demand, and ensuring compliance with Arkansas state tax requirements including collecting and remitting lodging taxes to the Arkansas Department of Finance and Administration.

To identify profitable short-term rental properties in Fort Smith, Arkansas, focus on locations within 2-3 miles of downtown Fort Smith, near the Arkansas River waterfront, close to Fort Smith National Historic Site, and in established neighborhoods like Chaffee Crossing or areas near the University of Arkansas Fort Smith campus. Target 2-4 bedroom properties built after 1980 with modern amenities, parking, outdoor spaces, and unique character features, as these typically command $80-150 per night compared to $60-90 for basic properties. Analyze pricing using AirDNA and Mashvisor to benchmark against the local average daily rate of approximately $95-120, while researching competition through Airbnb and VRBO searches to identify gaps in amenities or underserved areas. Key tools include STR Helper for market analysis, Rabbu for revenue projections, and local resources like the Fort Smith Convention & Visitors Bureau for tourism data, Fort Smith Board of Realtors for property insights, and monitoring events at venues like Riverfront Amphitheater and Kay Rodgers Park that drive demand. Properties near medical facilities like Mercy Hospital Fort Smith and business districts also perform well due to medical tourism and corporate travel, with successful properties typically generating 60-75% occupancy rates and $2,000-4,000 monthly revenue after expenses.

To obtain an Airbnb/STR permit in Fort Smith, Arkansas, you must first contact the Fort Smith Planning Department at City Hall located at 623 Garrison Avenue to determine if short-term rentals are permitted in your specific zoning district, as the city implemented STR regulations around 2019-2020. Submit an application through the Planning Department including required documents such as a completed STR permit application form, proof of property ownership or lease agreement, floor plan of the rental unit, parking plan showing adequate off-street parking, contact information for a local responsible party available 24/7, proof of liability insurance (typically $1 million minimum), and a signed affidavit acknowledging compliance with all city ordinances. Pay the application fee of approximately $150-250 plus annual renewal fees of around $100-150, and allow 30-45 days for processing and approval. Fort Smith specific requirements include maintaining a local contact person within 30 minutes of the property, providing adequate parking spaces, ensuring the property meets all building and fire safety codes, limiting occupancy based on bedroom count and square footage, maintaining quiet hours typically from 10 PM to 7 AM, and posting the permit number and emergency contact information prominently on the property. Once approved, you must renew the permit annually and comply with ongoing inspections and neighbor complaint procedures established by the city.

Short-term rentals (STRs) are legal in Fort Smith, Arkansas, but operate under specific city regulations implemented around 2019-2020. The city requires STR operators to obtain a business license and comply with zoning restrictions that generally prohibit STRs in certain residential districts, particularly R-1 single-family zones, while allowing them in commercial and some mixed-use areas. Fort Smith has established occupancy limits, parking requirements, and noise ordinances that STR operators must follow, along with safety standards including smoke detectors and emergency contact information. The city also requires a local contact person available 24/7 and has implemented complaint procedures for neighborhood issues. Recent changes have included stricter enforcement of existing regulations and clearer definitions of what constitutes a short-term rental versus traditional lodging, with the city maintaining the right to revoke licenses for repeated violations of city ordinances or neighbor complaints.

The best Airbnb investment areas in Fort Smith, Arkansas include the Historic Downtown District, particularly near Garrison Avenue and the Fort Smith National Historic Site, which attracts tourists interested in frontier history and the Judge Parker legacy. The Chaffee Crossing area offers strong potential due to its proximity to the University of Arkansas Fort Smith campus, generating consistent demand from visiting families, prospective students, and academic travelers. The Belle Grove Historic District provides charm for leisure travelers seeking authentic Victorian-era accommodations while being close to downtown attractions. Areas near the Arkansas River and Ben Geren Regional Park appeal to outdoor enthusiasts and families visiting for recreational activities, tournaments, and events. The Midland Boulevard corridor benefits from business travelers due to its proximity to major employers like Rheem Manufacturing, Whirlpool, and the growing logistics sector. Properties near the Fort Smith Regional Airport capture demand from business travelers and those attending events at the Fort Smith Convention Center, while the Jenny Lind and Cavanaugh neighborhoods offer affordable investment opportunities with good rental potential due to their central location and ongoing revitalization efforts.

In Fort Smith, Arkansas, Airbnb hosts are subject to both state and local lodging taxes. The Arkansas state tourism tax is 2% on gross receipts from short-term rentals, while Fort Smith imposes a local hotel/motel tax of 3% on lodging accommodations under 30 days. Additionally, standard Arkansas state sales tax of 6.5% applies to short-term rental income, along with any applicable local sales taxes which can range from 1-3% depending on the specific location within Fort Smith. These taxes are typically collected by Airbnb directly from guests for participating hosts through their tax collection service, which began around 2018-2019 for Arkansas properties. For hosts not using Airbnb's collection service, they must register with the Arkansas Department of Finance and Administration and remit taxes monthly if collections exceed $200 per month, or quarterly for smaller amounts. The city of Fort Smith requires separate registration and monthly remittance of local lodging taxes through their finance department. Exemptions generally apply to stays of 30 days or longer, which are considered long-term rentals rather than transient lodging, and some exemptions may apply for certain government or charitable organization bookings.

The total cost to start an Airbnb in Fort Smith, Arkansas is approximately $185,000-$220,000. Property purchase costs around $140,000-$160,000 based on median home prices in the area. Furnishing a 2-3 bedroom property requires $15,000-$25,000 for quality furniture, appliances, linens, and decor to create an attractive rental space. Initial setup costs including professional photography, listing creation, cleaning supplies, and welcome amenities total $2,000-$3,000. Permits and fees vary but typically include business license ($50-$100), short-term rental permit ($200-$500), and potential HOA approvals. Insurance for short-term rentals costs $1,500-$2,500 annually, significantly higher than standard homeowner's insurance. Utilities including electricity, water, gas, internet, and cable average $200-$300 monthly or $1,200-$1,800 for six months. First six months operating costs encompass cleaning services ($150-$200 per turnover), maintenance reserves ($500-$1,000 monthly), property management software ($50-$100 monthly), marketing expenses, and guest supplies, totaling approximately $8,000-$12,000. Additional considerations include potential property taxes, HOA fees if applicable, and a cash reserve for unexpected repairs or vacancy periods.

Airbnb properties in Fort Smith, Arkansas typically generate annual revenues between $15,000-$35,000 for entire homes and $8,000-$18,000 for private rooms, with average daily rates ranging from $65-$120 depending on property size and amenities. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($25-$40 per turnover), utilities ($150-$300 monthly), property management (10-20% of revenue), insurance ($800-$1,500 annually), and maintenance costs ($2,000-$4,000 yearly). Net profit margins typically range from 15-35% for well-managed properties, with higher margins achieved by hosts who self-manage and maintain high occupancy rates of 60-75%. Success factors in Fort Smith include proximity to the Arkansas River, downtown entertainment district, and Fort Smith National Historic Site, with properties near these attractions commanding premium rates. A typical 3-bedroom home purchased for $120,000 and generating $28,000 annual revenue with $18,000 in expenses would yield approximately $10,000 net profit (36% margin), though seasonal fluctuations significantly impact performance with summer months (June-August) generating 40% higher revenues than winter periods.

Airbnb investments in Fort Smith, Arkansas typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% based on current market conditions. Properties in downtown Fort Smith near the riverfront and historic district command higher nightly rates of $75-120, while suburban locations average $50-85 per night. With median home prices around $120,000-180,000 and average occupancy rates of 55-65%, investors can expect to reach profitability within 18-24 months after initial setup costs. The market benefits from Fort Smith's proximity to outdoor attractions like Devil's Den State Park and growing business travel, with successful properties generating $18,000-32,000 in annual gross revenue. Cash-on-cash returns are strongest for investors purchasing properties under $150,000 with 20-25% down payments, particularly in the Chaffee Crossing and downtown areas where demand from corporate travelers and weekend tourists drives consistent bookings year-round.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Fort Smith, Arkansas. Local real estate agents like River Valley Realty Group and Coldwell Banker Premier Properties have experience with investment properties in the Fort Smith market and understand the local rental dynamics. National services include Mashvisor, which provides Airbnb analytics and property search tools, AirDNA for market data analysis, and BiggerPockets for connecting with local investors and agents. RedAwning offers property management and investment guidance, while Awning provides end-to-end Airbnb investment services including property identification and management. Local property management companies like Fort Smith Property Management and Arkansas Rental Properties can assist with ongoing operations once properties are acquired. Additional national platforms include Roofstock for turnkey rental properties, though their Airbnb-specific inventory varies by market, and HostGPO for bulk purchasing and setup services for new Airbnb investors in emerging markets like Fort Smith.