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 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 listing on Airbnb with professional photos highlighting proximity to Little Rock (15 minutes), outdoor recreation at Camp Robinson, 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 establish management procedures including guest communication protocols, cleaning schedules between stays, key exchange systems, and maintenance routines to ensure consistent 4-5 star ratings and compliance with Sherwood's residential property standards.

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 identify properties where nightly rates of $80-150 can generate 60-70% occupancy rates, ensuring monthly gross revenue exceeds mortgage and operating costs by at least 30%. Research competition by analyzing existing STRs within a 3-mile radius on Airbnb and VRBO, noting their pricing, amenities, and review patterns to identify gaps in the market. Utilize local resources including the Greater Little Rock Association of Realtors MLS data, Pulaski County property records, and connect with local property management companies like Arkansas Short Term Rentals or Little Rock Property Management who understand Sherwood's zoning regulations and can provide insights on neighborhood performance, while also monitoring seasonal demand patterns related to events at Verizon Arena, University of Arkansas medical facilities, and corporate travel to nearby business districts.

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 a business license application through the City Clerk's office along with required documents including property deed or lease agreement, proof of liability insurance (minimum $1 million coverage), floor plan of the rental unit, 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 business license fee of approximately $50-75 annually and any applicable zoning compliance fees of around $100-150. The application review process typically takes 2-4 weeks, during which city staff will conduct a property inspection to ensure compliance with fire safety codes, occupancy limits, and parking requirements. Sherwood specifically requires STR properties to maintain quiet hours from 10 PM to 7 AM, limit occupancy to 2 people per bedroom plus 2 additional guests, provide adequate trash collection arrangements, and display the permit number in all online listings. Once approved, you must renew the permit annually and may be subject to periodic inspections to ensure ongoing compliance with city regulations.

Short-term rentals (STRs) in Sherwood, Arkansas are generally legal but subject to local regulations and zoning restrictions. The city of Sherwood requires STR operators to obtain proper business licenses and comply with residential zoning requirements, which may limit operations in certain neighborhoods designated exclusively for single-family residential use. Properties must meet safety standards including smoke detectors, carbon monoxide detectors, and fire extinguishers, while operators are typically required to maintain liability insurance and collect applicable taxes. Recent changes around 2022-2023 have included stricter enforcement of noise ordinances and parking requirements, with some areas near schools or parks having additional restrictions on STR operations. The city generally allows STRs in most residential zones but prohibits them in areas zoned specifically for traditional single-family housing without commercial activity, and operators must register with the city and may face penalties for non-compliance with local ordinances regarding occupancy limits, waste management, and neighbor notification requirements.

The best areas for Airbnb investment in Sherwood, Arkansas include the neighborhoods near Sherwood Forest Golf Club and the areas along Highway 107/JFK Boulevard, which attract business travelers due to proximity to Little Rock's corporate centers and the Little Rock Air Force Base. The residential areas near Granny White Park and along Kiehl Avenue offer appeal to families visiting for youth sports tournaments and events at nearby facilities. Properties close to the Arkansas River and Burns Park area benefit from outdoor recreation tourism, fishing enthusiasts, and visitors to Little Rock Zoo and golf courses. The downtown Sherwood area near City Hall and along Maryland Avenue provides good access for guests attending events at Verizon Arena, Simmons Bank Arena, and Little Rock Convention Center, while still offering more affordable property prices than central Little Rock. Areas near Sylvan Hills High School and the Sherwood Community Center attract visitors for school events, sports tournaments, and family gatherings, making these neighborhoods particularly attractive for short-term rental investments due to consistent demand from both leisure and business travelers seeking alternatives to traditional 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 rentals. The City of Sherwood imposes an additional 2% lodging tax on short-term rentals under 30 days, bringing the total tax rate to approximately 9.5%. These taxes are typically collected by Airbnb directly from guests at the time of booking through their automated tax collection system, which began in Arkansas around 2018. Airbnb remits the collected taxes monthly to the Arkansas Department of Finance and Administration and applicable local jurisdictions. Property owners may need to register with the Arkansas Department of Finance and Administration for a sales tax permit if they collect taxes independently. Rentals of 30 days or longer are generally exempt from lodging taxes but may still be subject to regular sales tax. Some jurisdictions may offer exemptions for certain types of accommodations or guests, such as government employees on official business, though specific exemptions vary by locality and should be verified with Pulaski County and Sherwood city tax authorities.

The total cost to start an Airbnb in Sherwood, Arkansas is approximately $185,000-$220,000. Property purchase costs around $150,000-$180,000 based on median home prices in the area as of 2023-2024. Furnishing a 2-3 bedroom property typically runs $8,000-$12,000 including beds, sofas, dining sets, appliances, linens, and decor. Initial setup costs including professional photography, listing creation, and basic marketing materials average $1,500-$2,500. Permits and fees in Pulaski County include business license ($50-$100), short-term rental permit ($200-$400), and potential HOA approvals. Insurance for short-term rentals costs $1,200-$2,000 annually, significantly higher than standard homeowner's insurance. Utility setup and deposits for electricity, water, gas, internet, and cable run $500-$800. First six months of operating costs including utilities ($150/month), cleaning services ($75 per turnover), supplies and maintenance ($200/month), platform fees (3% of bookings), and property management software ($50/month) total approximately $4,000-$6,000, assuming 60-70% occupancy rates typical for the Little Rock metro area market.

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), property management (10-20% of revenue), utilities ($150-$300 monthly), insurance ($800-$1,500 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 in the area reporting annual profits of $8,000-$18,000 per property. Key success factors include proximity to Little Rock attractions, competitive pricing strategies, professional photography, consistent 4.8+ star ratings, and targeting business travelers and families visiting the greater Little Rock metropolitan area. Properties near Sherwood Forest Golf Club and those offering family-friendly amenities tend to achieve higher occupancy rates of 60-75% annually, while basic properties without distinctive features struggle to exceed 45% occupancy, significantly impacting profitability in this suburban market where competition from traditional hotels remains moderate.

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 and proximity to Little Rock. Properties in Sherwood, particularly 3-4 bedroom homes near Burns Park or along the Arkansas River, can achieve occupancy rates of 65-75% with average daily rates of $85-120, leading to gross rental yields of 10-14% annually. Initial profitability usually occurs within 12-18 months after accounting for startup costs, furnishing, and marketing expenses, while full ROI recovery typically takes 3-4 years. The market benefits from consistent demand from Little Rock business travelers, families visiting the area's recreational facilities, and tourists exploring central Arkansas, with seasonal peaks during spring and fall generating 15-20% higher returns during those months.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties in Sherwood, Arkansas, using data analytics and market insights. Local real estate agents specializing in investment properties include Coldwell Banker RPM Group, RE/MAX Real Estate Partners, and Crye-Leike Realtors who have extensive knowledge of the North Little Rock metropolitan area market. National services like AirDNA provide market data and revenue projections for Sherwood properties, while Mashvisor offers investment property analysis tools specifically for short-term rentals. Local property management companies such as Arkansas Rental Management and Little Rock Property Management can assist with Airbnb operations once properties are acquired. RedAwning and AvantStay are national platforms that help investors identify and manage profitable vacation rental properties in emerging markets like Sherwood. Additionally, local investment groups and meetups through BiggerPockets connect investors with experienced professionals familiar with Arkansas short-term rental regulations and market conditions.