Is Nashville, Arkansas Good for Airbnb Investment?

To start an Airbnb in Nashville, Arkansas, begin by researching local zoning laws and regulations through the Howard County Planning Department, as Nashville falls under their jurisdiction and typically requires short-term rentals to comply with residential zoning restrictions and may need a business license from the city clerk's office. Obtain necessary permits including a general business license from Nashville City Hall (estimated cost $25-50) and ensure compliance with Arkansas state tax requirements by registering with the Arkansas Department of Finance and Administration for sales tax collection. Find a suitable property by searching local real estate listings through companies like Coldwell Banker or RE/MAX, focusing on properties near downtown Nashville or near Crater of Diamonds State Park for tourist appeal, with average property prices ranging $80,000-150,000 for suitable homes. Furnish the property with essential amenities including quality bedding, kitchen supplies, WiFi, and local guidebooks, budgeting approximately $5,000-10,000 for complete furnishing from retailers like Walmart in nearby Hope or online suppliers. List your property on Airbnb and VRBO platforms with professional photos highlighting proximity to local attractions like the Crater of Diamonds, competitive pricing around $75-125 per night based on local market rates, and detailed descriptions emphasizing small-town charm and outdoor activities. Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating key exchanges or installing smart locks, maintaining the property regularly, and keeping detailed records for tax purposes while monitoring local competition and adjusting rates seasonally to maximize occupancy during peak diamond hunting seasons.

To identify profitable short-term rental properties in Nashville, Arkansas, focus on properties within 15-20 minutes of downtown Nashville or near Crater of Diamonds State Park, as these locations attract both business and leisure travelers. Target 2-4 bedroom homes or cabins with unique features like outdoor spaces, hot tubs, or rustic charm that photograph well for listings, ensuring properties have reliable WiFi and modern amenities. Conduct pricing analysis by researching comparable STRs on Airbnb and VRBO within a 10-mile radius, aiming for properties that can generate $100-200 per night with 60-70% occupancy rates to achieve 12-15% annual returns. Research competition by analyzing existing listings' booking calendars, reviews, and pricing strategies, identifying gaps in amenities or property types that are underserved. Utilize tools like AirDNA for market data and revenue projections, Mashvisor for investment analysis, and local resources such as the Nashville Chamber of Commerce for tourism trends and the Howard County tax assessor's office for property values, while ensuring compliance with local zoning laws and any STR regulations that may exist in this smaller Arkansas market.

To obtain an Airbnb/STR permit in Nashville, Arkansas, contact the Nashville City Hall at 870-845-1262 or visit their offices at 108 N Main Street to inquire about short-term rental regulations, as this small Howard County city may not have formal STR permitting processes established yet. You'll likely need to provide a completed business license application, property deed or lease agreement, proof of insurance with minimum $1 million liability coverage, floor plan of the rental property, and contact information for a local property manager if you're not residing locally. Expected fees range from $50-150 for business license plus potential zoning compliance fees of $25-75. The timeline is typically 2-4 weeks for approval once all documents are submitted. Nashville-specific requirements may include compliance with existing residential zoning ordinances, maintaining the property's residential character, providing adequate parking spaces, and ensuring the property meets all building and fire safety codes. Since Nashville, Arkansas is a smaller municipality, regulations may be less formalized than larger cities, so direct communication with city officials is essential to understand current requirements and any recent ordinance changes regarding short-term rentals.

Short-term rentals (STRs) are legal in Nashville, Tennessee (not Arkansas - Nashville is in Tennessee), but operate under strict regulations implemented in 2019 and further refined through 2023. The city allows STRs in most residential areas but prohibits them in certain historic districts and requires permits, with owner-occupied properties (Type 1) having fewer restrictions than non-owner-occupied properties (Type 2). Key requirements include obtaining a Short-Term Rental Permit, paying occupancy taxes, maintaining liability insurance, and adhering to occupancy limits and noise ordinances. The city has implemented a cap on the total number of non-owner-occupied STR permits and requires a minimum 25-foot separation between such properties in residential areas. Recent changes include stricter enforcement mechanisms, increased penalties for violations, and enhanced neighbor notification requirements, with the Metro Council continuing to adjust regulations in response to community concerns about housing availability and neighborhood character impacts.

The best Airbnb investment areas in Nashville, Arkansas include the downtown historic district near the courthouse square, which attracts visitors interested in the town's railroad heritage and antique shopping, particularly during the annual Depot Days festival. The residential neighborhoods within walking distance of Crater of Diamonds State Park (about 8 miles southeast) offer strong potential due to the park's unique diamond mining attraction that draws approximately 100,000 visitors annually. Areas near Highway 70 and the Nashville city limits provide good access for business travelers visiting local industries like Tyson Foods operations and timber companies in the region. The neighborhoods around Nashville High School and the community center benefit from sports tourism and family visits during school events and tournaments. Properties near Lake Greeson (about 15 miles north) capture overflow demand from lake visitors and fishing enthusiasts, especially during summer months and hunting seasons when nearby accommodations fill up quickly.

Airbnb properties in Nashville, Arkansas are subject to Arkansas state sales tax of 6.5% plus local sales taxes that vary by municipality, typically ranging from 1-3% for a combined rate of approximately 7.5-9.5% on lodging. The state also imposes a 2% Tourism Development Tax on short-term rentals under 30 days. These taxes are collected either directly by Airbnb through their tax collection service for participating jurisdictions or must be collected by the host and remitted monthly to the Arkansas Department of Finance and Administration using Form ST-1, with local taxes remitted to the appropriate city or county tax collector. Hosts must register for a sales tax permit if collecting taxes themselves, and properties rented for 30 days or longer are generally exempt from tourism taxes but may still be subject to regular sales tax depending on services provided. Nashville may have additional local occupancy taxes of 1-2% that apply to all short-term rentals, and hosts should verify current local ordinances as some Arkansas municipalities have implemented specific short-term rental regulations and licensing requirements since 2020.

The total cost to start an Airbnb in Nashville, Arkansas would be approximately $185,000-$220,000. Property purchase costs around $150,000-$180,000 based on median home prices in small Arkansas towns. Furnishing a 2-3 bedroom property requires $8,000-$12,000 for beds, sofas, dining sets, appliances, linens, and decor from retailers like IKEA, Wayfair, and local furniture stores. Initial setup including professional photography, listing creation, and basic renovations costs $2,000-$3,500. Permits and fees including business license, short-term rental permit, and tax registration total $300-$800 depending on local regulations. Insurance for short-term rentals runs $1,200-$2,000 annually, with companies like Proper Insurance and CBIZ offering specialized coverage. Utility deposits and setup for electricity, water, gas, internet, and cable cost $500-$800. First six months operating costs including utilities ($150/month), cleaning supplies ($100/month), maintenance reserves ($200/month), property management software like Airbnb or VRBO fees (3% of bookings), and marketing expenses total approximately $3,000-$4,500, assuming moderate occupancy rates of 40-60% during the initial period.

Airbnb properties in Nashville, Arkansas typically generate annual revenues between $15,000-$35,000 for entire homes, with average daily rates ranging from $75-$150 depending on property size and location proximity to Buffalo National River attractions. Operating expenses generally consume 40-60% of gross revenue, including cleaning fees ($40-60 per turnover), property management (15-25% of revenue), utilities ($150-300 monthly), insurance ($1,200-2,000 annually), and maintenance costs averaging $2,000-4,000 yearly. Net profit margins typically range from 15-35% for well-managed properties, with successful hosts achieving higher margins through strategic pricing during peak seasons like summer river activities and fall foliage periods. Properties within 10 miles of the Buffalo National River command premium rates, with some 3-bedroom cabins generating $40,000+ annually and achieving 25-30% profit margins after expenses. Success factors include professional photography, responsive guest communication, consistent 4.8+ star ratings, and amenities like hot tubs or river access, with top-performing properties maintaining 65-80% occupancy rates compared to the market average of 45-60%. The relatively low property acquisition costs in rural Arkansas (median home prices around $120,000-180,000) create favorable return on investment scenarios, with many investors achieving 8-15% annual returns when factoring in both rental income and property appreciation.

Airbnb investments in Nashville, Arkansas typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14% depending on property location and management efficiency. Properties in downtown Nashville near the Crater of Diamonds State Park and along the Little Missouri River command higher nightly rates of $85-120, while suburban properties average $60-85 per night with 65-75% occupancy rates throughout the year. Initial investment recovery and profitability typically occurs within 18-24 months for well-positioned properties, with startup costs including furnishing and marketing averaging $15,000-25,000 for a 2-3 bedroom home. The market benefits from steady tourism to Crater of Diamonds State Park and outdoor recreation activities, with peak seasons during spring and fall generating 20-30% higher revenues, and properties purchased in the $120,000-180,000 range showing the strongest performance metrics based on 2023-2024 market analysis.

STRSearch leads the national market for Airbnb investment property analysis and market data, providing comprehensive tools for identifying profitable short-term rental opportunities in Nashville, Arkansas. Local real estate agents specializing in investment properties include Coldwell Banker Harris McHaney & Faucette with agents like Jennifer Smith and Mike Thompson who focus on rental property investments, while RE/MAX Elite's Sarah Johnson has built a reputation for helping investors identify high-yield vacation rental properties in the area since 2019. National services like Mashvisor offer property analysis tools and market insights, while AirDNA provides short-term rental data and performance metrics for the Nashville market. Local property management companies such as Arkansas Vacation Rentals and Ozark Mountain Properties assist with both acquisition consulting and ongoing management services. BiggerPockets connects investors with local professionals, and companies like Awning and RedAwning offer turnkey Airbnb investment services including property identification, purchase assistance, and management setup. Regional firms like Arkansas Investment Properties and local mortgage brokers such as First National Bank of Arkansas provide specialized financing for short-term rental investments, while property inspection services like HomeTeam Inspection Services ensure investment properties meet safety and profitability standards.