Is Sherwood, Arkansas Good for Airbnb Investment?

To start an Airbnb in Sherwood, Arkansas, begin by researching local regulations as Sherwood follows Arkansas state laws which generally allow short-term rentals but may require business licenses and tax registration with the Arkansas Department of Finance and Administration. Contact Sherwood City Hall at 501-835-7231 to verify any specific municipal requirements, zoning restrictions, and obtain necessary business permits which typically cost $25-50 annually. Find a suitable property by searching residential areas near Camp Robinson or along Highway 107, ensuring it's zoned for residential use and checking HOA restrictions if applicable. Purchase essential furnishings including quality mattresses, linens, basic kitchen appliances, WiFi equipment, and safety items like smoke detectors and fire extinguishers, budgeting approximately $3,000-8,000 for a complete setup. Create your Airbnb listing with professional photos highlighting proximity to Little Rock (15 minutes), Camp Robinson Special Use Area, and local attractions, setting competitive rates around $60-120 per night based on comparable properties. Register for Arkansas sales tax collection (6.5% state rate plus local taxes), obtain liability insurance coverage, and implement a management system using Airbnb's tools or third-party services like Hostfully or Guesty for booking coordination, guest communication, cleaning schedules, and maintenance, while ensuring compliance with Arkansas's 30-day advance booking requirement for tax purposes.

To identify profitable short-term rental properties in Sherwood, Arkansas, focus on locations within 15-20 minutes of downtown Little Rock and near major attractions like the Arkansas River, Burns Park, or Jacksonville's entertainment districts, as these areas attract both business and leisure travelers. Target 3-4 bedroom single-family homes built after 1990 with modern amenities, full kitchens, dedicated parking, and outdoor spaces like patios or decks, as families and groups visiting the Little Rock metro area prefer these features. Conduct pricing analysis using AirDNA and Mashvisor to evaluate average daily rates ($80-150 range typical for the market), occupancy rates (aim for 60%+ annually), and seasonal demand patterns, while ensuring your total monthly expenses including mortgage, utilities, cleaning, and management fees don't exceed 70% of projected gross rental income. Research competition by analyzing similar properties within a 5-mile radius on Airbnb and VRBO, noting their pricing strategies, amenities, and guest reviews to identify market gaps and positioning opportunities. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through Arkansas Realtors, while connecting with Sherwood-specific Facebook groups, the Greater Little Rock Association of Realtors, and local property management companies like Arkansas Vacation Rentals or Little Rock STR managers who understand municipal regulations and can provide market insights specific to Pulaski County's short-term rental landscape.

To obtain an Airbnb/STR permit in Sherwood, Arkansas, you must first contact the Sherwood Planning and Zoning Department at City Hall located at 8200 E Kiehl Avenue to determine if short-term rentals are permitted in your specific zoning district, as the city requires compliance with residential zoning regulations. Submit an application for a business license through the City Clerk's office, providing required documents including proof of property ownership or lease agreement, liability insurance certificate (minimum $1 million coverage), floor plan of the rental property, parking plan showing adequate off-street parking, and contact information for a local property manager if you live more than 50 miles away. Pay the applicable fees which typically include a business license fee of approximately $50-100 annually and any zoning compliance fees around $25-75. The approval timeline generally takes 2-4 weeks for processing once all required documents are submitted and any necessary inspections are completed. Sherwood-specific requirements include maintaining the property's residential character, ensuring adequate parking for guests without impacting neighbors, providing 24/7 contact information to the city and neighbors for any issues, limiting occupancy to no more than 2 people per bedroom plus 2 additional guests, and adhering to noise ordinances with quiet hours typically from 10 PM to 7 AM, while also ensuring the property meets all building and fire safety codes before receiving final approval.

Short-term rentals (STRs) in Sherwood, Arkansas are generally legal but subject to local regulations and zoning restrictions. The city of Sherwood has implemented specific ordinances governing STRs that require property owners to obtain proper permits and business licenses before operating. STRs are typically prohibited in certain residential zoning districts, particularly R-1 single-family zones, while they may be permitted in mixed-use or commercial areas with conditional use permits. Property owners must comply with safety requirements including smoke detectors, carbon monoxide detectors, and fire extinguishers, and are subject to occupancy limits based on the property size. The city has established registration requirements and may conduct inspections to ensure compliance with building codes and safety standards. Recent changes around 2022-2023 have strengthened enforcement mechanisms and clarified zoning restrictions, with the city requiring annual renewals of STR permits and implementing stricter penalties for non-compliance. Operators must also collect and remit local taxes, and properties must maintain adequate parking and not create disturbances in residential neighborhoods.

The best areas for Airbnb investment in Sherwood, Arkansas include the neighborhoods near Sherwood Forest Golf Club and the areas along Highway 107/Kiehl Avenue corridor, which attract business travelers due to proximity to Little Rock's corporate centers and medical facilities like UAMS, with properties here benefiting from consistent demand from medical professionals and consultants. The residential areas near Sylvan Hills High School and around Kellogg Lake offer family-friendly accommodations that appeal to visitors attending school events, youth sports tournaments, and families relocating to the area for work. Properties near the Jacksonville border capture overflow demand from Little Rock Air Force Base personnel and their visiting families, while neighborhoods close to Grassy Lake provide recreational appeal for fishing and outdoor enthusiasts. The central Sherwood area along Maryland Avenue benefits from easy access to both Little Rock's downtown business district and North Little Rock's entertainment venues, making it attractive for both business and leisure travelers seeking affordable alternatives to downtown hotels.

Airbnb properties in Sherwood, Arkansas are subject to Arkansas state sales tax of 6.5% and Pulaski County sales tax of 1%, totaling 7.5% on lodging stays under 30 days. The City of Sherwood does not impose a separate lodging or occupancy tax as of 2023. These taxes are typically collected by Airbnb directly from guests through their platform and remitted to the Arkansas Department of Finance and Administration on behalf of hosts, though individual hosts may need to register and remit taxes themselves if they exceed certain thresholds or if Airbnb is not collecting on their behalf. Stays of 30 days or longer are generally exempt from these transient lodging taxes and are treated as residential rentals. Hosts should verify their tax obligations with the Arkansas DFA and may need to obtain a sales tax permit if managing collections independently, with monthly or quarterly remittance typically required depending on volume.

To start an Airbnb in Sherwood, Arkansas, the total costs would be approximately $180,000-$220,000. Property purchase represents the largest expense at $150,000-$180,000 based on median home prices in the area as of 2023-2024. Furnishing costs typically range $8,000-$15,000 for a complete 2-3 bedroom home including furniture, bedding, kitchenware, and decor from retailers like IKEA, Wayfair, and local stores. Initial setup costs including professional photography, listing creation, and basic renovations average $2,000-$4,000. Permits and fees vary but generally cost $200-$800 including business license, short-term rental permit, and potential HOA approvals. Insurance specifically for short-term rentals through companies like Proper or CBIZ runs $1,200-$2,400 annually. Utilities including electricity, water, internet, and cable average $200-$300 monthly or $1,200-$1,800 for six months. First six months operating costs including cleaning services, supplies, maintenance, platform fees to Airbnb and Vrbo, and marketing total approximately $3,000-$6,000. Additional considerations include property taxes, potential property management fees if outsourced, and a contingency fund for unexpected repairs or vacancy periods.

Airbnb properties in Sherwood, Arkansas typically generate annual revenues between $15,000-$35,000 for entire homes, 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-$250 monthly), property management (10-20% of revenue), insurance ($800-$1,500 annually), and maintenance costs ($2,000-$4,000 yearly). Properties near the Arkansas River or with proximity to Little Rock's business district command premium rates, with successful hosts like those operating 3-bedroom homes near Sherwood Forest Golf Club reporting net profit margins of 25-35% after all expenses. Key success factors include professional photography, consistent 4.8+ star ratings, strategic pricing during events at nearby venues, and targeting business travelers commuting to Little Rock. Properties purchased around 2019-2020 for $180,000-$250,000 have shown strong ROI of 8-12% annually when factoring in both rental income and property appreciation, though newer entrants face increased competition and higher acquisition costs that may reduce margins to 15-25% in the current market.

Airbnb investments in Sherwood, Arkansas typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% based on the local market dynamics. Properties in Sherwood, located in the Little Rock metropolitan area, benefit from steady demand from business travelers visiting nearby corporate facilities and tourists exploring central Arkansas attractions. Initial investment properties averaging $150,000-$200,000 can expect monthly rental income of $1,200-$1,800, with occupancy rates around 65-75% annually. After accounting for property management fees (typically 20-25%), maintenance, utilities, and local taxes, investors generally achieve profitability within 18-24 months of operation. The market shows particular strength during spring and fall months when outdoor activities peak, and corporate travel increases, with some properties achieving premium rates of $80-120 per night during peak seasons compared to $60-85 during slower periods.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Sherwood, Arkansas. Local real estate agents like those at Crye-Leike Realtors and RE/MAX Real Estate Partners have experience helping investors find properties suitable for Airbnb conversions in the North Little Rock metropolitan area. Awning, a national service founded in 2018, provides comprehensive Airbnb investment analysis and property management services for Arkansas markets. Mashvisor offers data-driven investment property analysis tools that cover the Little Rock-North Little Rock-Conway MSA including Sherwood. Local property management companies like Arkansas Short Term Rentals and River City Property Management assist investors with Airbnb setup and operations. BiggerPockets, the national real estate investment platform, connects investors with local Arkansas agents experienced in short-term rental properties. AirDNA provides market data and analytics specifically for Airbnb investments in Arkansas markets. Roofstock and Arrived Homes are national platforms that occasionally feature turnkey short-term rental properties in Arkansas markets, while local investment groups like Arkansas Real Estate Investors Association provide networking opportunities for finding Airbnb-suitable properties in Sherwood and surrounding areas.