- As residents of Northwest Arkansas, many of us have been made aware of the recent developments in short-term rental property regulations. These regulations can significantly impact the value of properties intended for use as short-term rentals. Check out how to invest wisely and claim top prizes in the thriving short-term rental market!
With changes in regulations, it is essential to analyze the relevant data and identify the cities that are performing strongly in terms of average daily rates, average monthly revenue, number of active rentals, occupancy rates, and other key metrics that can be of great interest to potential investors seeking to claim top prizes in this thriving market.
Let’s start by identifying which city is currently leading the way in terms of average daily rates and monthly revenue. With the allure of Beaver Lake, ongoing renovations in the old downtown, and impressive growth in the Pinnacle area, Rogers has emerged as the clear front-runner, claiming the top prize for both daily rates and monthly revenue.
Active Short-Term Rentals – ROGERS
As we dive deeper into the data, Bentonville has the highest number of active Airbnb rentals, as well as the distinction of having the highest occupancy rate among the primary cities in the area. Key factors contributing to Bentonville’s success is the vibrant downtown culture and amenities, extensive bike trail systems, and the steady influx of both business and leisure travelers. Therefore, it remains an opportunistic environment for short-term rental investments. On the other hand, Fayetteville, which has the second highest number of active rentals, reports the lowest occupancy rate among the four primary cities. This can be attributed to a relatively lower volume of business travelers when compared to the other three cities.
Active Short-Term Rentals – Bentonville
The analysis of data pertaining to the number of bedrooms and guest count provides valuable insights for investment decisions in Airbnb/VRBO properties. The number of bedrooms determines the maximum guest count, which in turn defines the size and demographic of groups that the property can accommodate. Therefore, the number of guests an Airbnb/VERBO property can accommodate is a critical factor to consider when making an investment purchase, as it has a direct impact on the property’s revenue potential and its target audience.
Let’s explore potential investment opportunities for individuals who are interested in short-term rental properties. Short-term rentals can also serve as an attractive option for investors seeking to capitalize on tenants who may not be interested in a long-term lease commitment. These tenants could include individuals relocating early for a new job, those needing housing during new construction builds, individuals on short-term job assignments, or individuals with extended stays to be with loved ones. To meet the needs of these tenants, short-term rental rates are often reduced for block periods ranging from one to three months. While this may result in a lower nightly rate for the investor, it can lead to increased overall occupancy rates due to the stability of this model.
Another creative approach for investors, involving less financial risk, is to secure a long-term lease on a property and subsequently sublet it through a short-term rental platform, such as Airbnb, in an effort to generate income in excess of the monthly lease rate. It is important to ensure that this arrangement is permissible under the terms of the lease agreement.
Additionally, you should be aware that regulations on short-term rentals vary by city in Northwest Arkansas, with some cities having regulations on licensing and permitting such as Fayetteville and Bella Vista. Investors considering an Airbnb property in Rogers or Bentonville should consider that these cities currently have less restrictive regulations.
As the amenities in Benton County continue to expand, including the Pinnacle Downtown development, the Ledger, Walmart corporate office, and Crystal Bridges, the demand for short-term rentals is expected to surge. To meet this rising demand, it will be necessary to increase inventory to prevent short-term rental rates from becoming unaffordable. Cities with less restrictive regulations will ensure an ample supply of inventory. This will help maintain affordability and promote more reasonable pricing for short-term rentals.
Airbnb city regulation links:
Article sources: www.airdna.com