Is Hot Springs Village, Arkansas Good for Airbnb Investment?

To start an Airbnb in Hot Springs Village, Arkansas, begin by researching local regulations through the Hot Springs Village Property Owners Association (POA) and Garland County, as the community has specific covenants and restrictions that may limit short-term rentals in certain areas, with some neighborhoods prohibiting rentals under 30 days entirely. Contact the Hot Springs Village POA office at (501) 922-5582 to verify if your intended property allows short-term rentals and obtain necessary approvals, then secure a business license from Arkansas Secretary of State and register for state sales tax collection through the Arkansas Department of Finance and Administration. Find a suitable property by working with local real estate agents familiar with POA restrictions, focusing on areas like Balboa, DeSoto, or Granada neighborhoods where rental restrictions may be more lenient, with typical investment properties ranging from $150,000-$400,000 depending on location and amenities. Furnish the property with quality furniture, linens, and amenities that appeal to Hot Springs Village visitors such as golf enthusiasts and lake lovers, including items like golf towels, lake gear, and comfortable outdoor furniture for the typically mild Arkansas climate. Create your Airbnb listing with professional photos highlighting nearby attractions like the seven lakes, golf courses, and proximity to Hot Springs National Park (about 45 minutes away), setting competitive rates typically ranging from $75-$200 per night depending on property size and season. Manage your property by establishing relationships with local cleaning services, maintenance providers, and consider using property management companies like Vacasa or RedAwning if you're not local, while maintaining communication with the POA to ensure ongoing compliance with community standards and any evolving short-term rental policies.

To identify profitable short-term rental properties in Hot Springs Village, Arkansas, focus on locations within 1-2 miles of Lake Balboa, Lake Coronado, or the championship golf courses, as these amenities drive the highest occupancy rates year-round. Target 2-4 bedroom properties built after 1990 with updated kitchens, multiple bathrooms, outdoor spaces like decks or patios, and amenities such as hot tubs, game rooms, or lake access, as these features command premium nightly rates of $150-300 in this market. Analyze comparable properties using AirDNA and Mashvisor to identify optimal pricing strategies, with peak seasons during summer months and golf tournaments typically generating 70-85% occupancy rates. Research competition by monitoring existing STRs within a 3-mile radius, noting their amenities, pricing, and guest reviews to identify market gaps and positioning opportunities. Utilize tools like Rabbu for Hot Springs Village-specific market data, the Hot Springs Village Property Owners Association website for community regulations and amenities information, and local real estate platforms like Coldwell Banker or RE/MAX to identify properties under $300,000 that can generate 15-25% annual returns when properly managed and marketed to golf enthusiasts, lake recreation visitors, and corporate retreat groups.

To obtain an Airbnb/STR permit in Hot Springs Village, Arkansas, you must first contact the Hot Springs Village Property Owners Association (POA) at their administrative offices located at 4855 North Highway 7, since HSV is a private gated community with its own governance structure separate from Garland County. You'll need to submit a Short-Term Rental Application along with required documents including proof of property ownership, current property insurance policy with minimum $1 million liability coverage, floor plan of the rental unit, parking plan showing adequate guest parking, and a signed acknowledgment of HSV's Protective Covenants. The application fee is typically around $150-200 with an annual renewal fee of approximately $100-125. Additionally, you must obtain a business license from Arkansas Secretary of State's office and register for state and local tax collection with the Arkansas Department of Finance and Administration. Hot Springs Village specific requirements include maintaining the property in accordance with architectural standards, ensuring guests comply with gate access procedures and community rules, providing emergency contact information to the POA, and limiting occupancy to no more than 2 people per bedroom plus 2 additional guests. The approval process typically takes 30-45 days once all documentation is submitted, and you must also comply with any applicable Garland County regulations and obtain proper zoning approval if required, though HSV's private status may supersede some county requirements.

Short-term rentals (STRs) in Hot Springs Village, Arkansas operate in a complex legal environment due to the community's unique status as a Property Owners' Association (POA). While Arkansas state law generally permits STRs with proper registration and tax compliance, Hot Springs Village's POA has historically restricted or prohibited short-term rentals through its covenants and restrictions, viewing them as commercial activities incompatible with the residential community character. The POA's Board of Directors has maintained policies limiting rentals to minimum 30-day terms in most areas, though enforcement and specific regulations have evolved over recent years. Property owners must comply with both state requirements (including registration with the Arkansas Department of Finance and Administration and collecting state and local taxes) and POA rules, which can include approval processes, additional fees, and operational restrictions. Recent years have seen ongoing discussions and potential policy adjustments as the POA balances property owner rights with community standards, but the general stance remains restrictive compared to other Arkansas municipalities that have embraced STR regulations.

The best areas for Airbnb investment in Hot Springs Village, Arkansas are the Balboa Peninsula and DeSoto areas near Lake Balboa and Lake DeSoto, which attract water sports enthusiasts and fishing tourists year-round, particularly during spring and summer months when lake activities peak. The Coronado Center vicinity offers strong potential due to its proximity to shopping, dining, and community events, making it attractive for visitors attending the annual Hot Springs Village Arts & Crafts Fair and seasonal festivals. Properties near the Hot Springs Village Country Club and golf courses in the Granada and Cortez areas command premium rates from golf tourism, especially during Arkansas's extended golf season from March through November. The Ponce de Leon area near the marina and boat launches sees consistent demand from fishing tournaments and water recreation visitors, while locations close to the Hot Springs Village Visitor Center and main entry points benefit from convenience-seeking travelers and business visitors attending corporate retreats at local venues.

Hot Springs Village, Arkansas Airbnb properties are subject to Arkansas state sales tax of 6.5% and Garland County sales tax of 2.5%, totaling 9% on lodging rentals, which applies to stays of less than 30 consecutive days. The Arkansas Tourism Development Act imposes an additional 2% tax on short-term rentals, bringing the total tax burden to approximately 11%. These taxes are typically collected by Airbnb directly from guests and remitted to the Arkansas Department of Finance and Administration on behalf of hosts through their Occupancy Tax Collection Service, which began in 2018. Hosts who collect taxes independently must register with the Arkansas DFA, file monthly returns by the 20th of the following month, and remit payments electronically through the Arkansas Taxpayer Access Point system. Properties rented for 30 days or more consecutively are generally exempt from these occupancy taxes, and some hosts may qualify for small seller exemptions if their annual gross receipts fall below $1,000, though they must still register and file returns even if no tax is owed.

To start an Airbnb in Hot Springs Village, Arkansas, expect total costs around $285,000-$315,000. Property purchase averages $250,000-$275,000 for a median 3-bedroom home suitable for short-term rental. Furnishing costs range $15,000-$20,000 including furniture, appliances, linens, and décor for a complete guest-ready setup. Initial setup expenses total $3,000-$4,000 covering professional photography, listing creation, welcome materials, and basic marketing. Permits and fees cost approximately $500-$800 including business license, short-term rental permit, and HOA approval fees. Insurance runs $1,200-$1,500 annually for short-term rental coverage. Utilities average $200-$300 monthly including electricity, water, internet, cable, and trash service. First six months operating costs total $8,000-$10,000 covering utilities ($1,800), cleaning services ($2,400), maintenance supplies ($800), Airbnb service fees ($1,500), marketing ($500), and miscellaneous expenses ($1,000). Additional considerations include potential HOA restrictions and seasonal demand fluctuations affecting occupancy rates in this retirement community known for golf courses and lake activities.

Airbnb properties in Hot Springs Village, Arkansas typically generate annual revenues between $15,000-$35,000 for well-positioned properties, with average daily rates ranging from $80-150 depending on amenities and location within the village. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($50-75 per turnover), property management (15-25% of revenue), utilities ($200-400 monthly), insurance ($1,500-3,000 annually), and maintenance costs averaging $2,000-4,000 yearly. Properties near Lake Balboa or golf courses command premium rates and achieve 60-75% occupancy during peak seasons (spring through fall), while standard village properties average 45-60% occupancy. Net profit margins typically range from 15-35% for owner-operated properties, with successful hosts like those managing lakefront cabins reporting annual profits of $8,000-18,000 after expenses. Key success factors include professional photography, responsive guest communication, proximity to recreational amenities, and maintaining 4.8+ star ratings, as Hot Springs Village attracts primarily leisure travelers seeking golf, lake activities, and nature experiences. Properties requiring significant upfront renovations may need 3-5 years to achieve positive ROI, while turnkey properties in desirable locations can become profitable within 12-18 months.

Based on Hot Springs Village, Arkansas market conditions, Airbnb investments typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14% depending on property type and location within the community. Properties near Lake Balboa, Lake DeSoto, or the golf courses command premium rates of $120-180 per night with 65-75% occupancy rates during peak seasons (spring through fall), while standard residential properties average $80-120 nightly with 55-65% occupancy. Initial investment recovery generally occurs within 6-8 years for well-positioned properties, with monthly gross revenues of $2,500-4,500 for higher-end homes and $1,500-2,800 for standard properties. The retirement community demographics and recreational amenities support consistent demand, though seasonal fluctuations require properties to achieve 60%+ annual occupancy to reach target returns, with most investors seeing positive cash flow within 18-24 months after accounting for property management fees of 20-25% and maintenance costs.

STRSearch is a national platform that helps investors identify profitable short-term rental properties including in Hot Springs Village, Arkansas. Local real estate agents specializing in investment properties in the area include Century 21 Wright Real Estate, Coldwell Banker Village Communities, and RE/MAX Real Estate Partners who have experience with vacation rental properties in Hot Springs Village. National services that assist with Airbnb investment property acquisition include AirDNA for market analysis, Mashvisor for property analytics, BiggerPockets for investor networking and deals, Roofstock for turnkey rental properties, and RedAwning for vacation rental market insights. Local property management companies like Village Property Management and Hot Springs Village Rentals can provide insights into profitable rental areas within the community. Investment-focused real estate companies such as HomeVestors and We Buy Ugly Houses occasionally have properties suitable for short-term rental conversion in the Arkansas market, while platforms like LoopNet and Crexi list commercial and investment residential properties that could be converted to profitable Airbnb units in the Hot Springs Village area.