Hot Springs Short-Term Rental Rules: Owner’s Guide

Thinking about turning a Hot Springs home or condo into a short-term rental? You’re not alone. With steady tourism and year-round draw, the downtown and surrounding neighborhoods can be attractive for STRs. The key is staying compliant so your investment is protected and your guests are safe. This guide walks you through zoning, licensing, taxes, safety, budgeting, and when to bring in local pros. Let’s dive in.

What to confirm first

Before you list, confirm the basics with the right offices. Start with the City of Hot Springs Planning & Development for zoning and permitted uses, and the Business License or Treasurer’s office for licensing and local registration. Check with the Arkansas Department of Finance & Administration for sales tax registration and filing requirements. If your property has a private septic or well, talk with Garland County health or environmental offices.

Also review your HOA or deed restrictions in writing. Some communities limit or prohibit STRs. Finally, consult the Hot Springs Fire Department or local fire marshal about safety and occupancy limits. A quick verification up front prevents costly corrections later.

Zoning and where STRs fit

Zoning determines whether your property can be used as a short-term rental. Downtown Hot Springs often includes mixed-use zones, but smaller residential districts may restrict STRs or require special approval. Ask planning staff whether STRs are permitted as-of-right, only as owner-occupied, or by conditional use permit.

If your property sits in or near a historic district by Hot Springs National Park, there may be added reviews or limitations. Confirm any historic or special district rules before you invest in renovations or exterior changes. Always keep written confirmation of what is allowed at your address.

Occupancy and parking basics

Maximum occupancy is driven by building and fire code. While many hosts follow a rule of thumb like 2 people per bedroom plus 2, the lawful number must come from the local fire marshal or building official. You may be required to post maximum occupancy inside the unit.

Downtown properties can have limited parking. Local ordinances or conditional use permits can set minimum off-street spaces or restrict on-street parking. Noise ordinances, trash rules, and quiet hours are commonly enforced, and complaints can trigger inspections.

Registration, licensing, and taxes

Many cities require a business license or short-term rental registration. Ask the City Treasurer or Business License office about the application process, fees, renewal timing, and any required local contact or insurance proof. Some jurisdictions require an in-state agent for service.

For taxes, register with the Arkansas Department of Finance & Administration to collect and remit state sales tax on short-term lodging. Hot Springs and Garland County may also have local lodging or tourism taxes. Platforms sometimes collect and remit certain taxes automatically, but it varies by location. Confirm which taxes your platform handles, what you must file yourself, and keep records of all remittances.

Set up separate bookkeeping for lodging revenue and mark filing due dates. DFA filing frequency can vary based on revenue. Late filings or nonpayment can lead to penalties.

Safety and inspections

Expect to meet standard safety items like working smoke alarms, carbon monoxide alarms, portable fire extinguisher, clear exit routes, and proper lighting and handrails. Electrical and plumbing should be in good working order. The fire department can advise on device locations and whether a fire inspection is needed.

Homes with pools, hot tubs, or saunas may face added safety measures, such as barriers or locking covers. If you have a private septic or well, confirm any county health department requirements. Proactive safety upgrades reduce risk and improve guest confidence.

Insurance and guest standards

Standard homeowners insurance often excludes short-term rental activity. Ask your insurance professional about a short-term rental endorsement or a commercial policy that covers STR operations. Consider umbrella liability and review any host protection programs offered by your platform, understanding their limits.

Document property condition and inventory with photos and checklists. Provide clear house rules, emergency contacts, and instructions for systems like HVAC or security. Maintain clean, safe utilities and arrange reliable trash removal and pest control.

Enforcement and how to avoid problems

Most cities use a complaints-driven approach. Common triggers include noise, parties, parking overflow, trash issues, and operating without required approvals. Administrative penalties can include fines, orders to reduce occupancy, or stop-use notices.

Repeated violations or nonpayment of taxes can lead to license or registration revocation. Municipal codes typically outline how to appeal fines or revocations, along with timelines. Good neighbor policies, prompt guest support, and solid documentation help prevent issues.

Budget and ROI planning

Plan for startup and ongoing costs before you buy or list. Typical one-time items include permits and registrations, safety upgrades that can range from about $300 to more than $2,000, furnishings which can range from $5,000 to more than $30,000, and professional photography and listing setup.

Recurring costs include utilities, cleaning and turnover that often range from $75 to $250 per stay depending on size, management fees that commonly range from 15 to 35 percent of booking revenue for full service, and maintenance at about 5 to 10 percent of gross income or a monthly reserve. Add insurance premium changes and all applicable sales and lodging taxes.

For revenue, expect seasonality. Downtown Hot Springs benefits from steady visitation, but weekends and event periods typically book faster. Build conservative first-year occupancy assumptions in the 40 to 60 percent range and adjust as you learn your calendar and rates.

Step-by-step checklist

• Confirm zoning and whether STRs are permitted with Hot Springs Planning & Development. Ask about any conditional use permit or registration.
• Contact the City Treasurer or Business License office for licensing, fees, renewals, and any signage or local contact requirements.
• Register with the Arkansas Department of Finance & Administration and confirm all city and county lodging or tourism taxes and filing procedures.
• Call the Hot Springs Fire Department or fire marshal to set lawful occupancy and to review required alarms, extinguishers, and any inspection schedule.
• Review HOA and deed restrictions and get written confirmation that STRs are allowed, including any limits on occupancy or parking.
• Secure appropriate insurance with an STR endorsement or commercial coverage, plus umbrella liability as needed.
• Prepare the property with safety upgrades, cleanings, furnishings, and clear guest instructions and house rules.
• Set your listing strategy, platforms, pricing, calendar, deposits, and cancellation policies.
• Establish bookkeeping, a tax calendar, and a system to track and remit all applicable taxes.
• If you are not local, designate a local contact or hire a property manager to handle guest needs and emergencies.

When to hire local pros

Consider a zoning or land-use attorney if your address sits in a gray area, if you need a conditional use permit, or if an HOA challenge is likely. A local CPA with hospitality experience can set up sales and lodging tax compliance and advise on filings.

If you want turnkey operations or live out of town, interview experienced Hot Springs property managers who understand demand and municipal rules. An insurance broker who handles short-term rentals can guide you to the right coverage. For renovations or capacity changes, consult code professionals and licensed contractors early.

Ready to run the numbers?

A compliant plan protects your returns and your peace of mind. If you are comparing neighborhoods, weighing historic district considerations, or scouting a property with strong STR potential, connect with a local guide who knows the nuances. For tailored guidance and buyer or seller representation in Hot Springs and the Garland County lakes, reach out to Jeff Kennedy for a friendly, no-pressure conversation.

FAQs

Do I need a special STR permit in Hot Springs?

• Check with Hot Springs Planning & Development and the Business License office to confirm whether your zoning allows STRs and if registration or a conditional use permit applies.

Who collects lodging and sales taxes for my Hot Springs STR?

• Register with the Arkansas DFA and verify all city and county lodging taxes; some platforms collect certain taxes automatically, but you must confirm what they cover and keep records.

How is maximum occupancy set for a Hot Springs STR?

• Occupancy limits come from building or fire code, so contact the local fire marshal to determine the lawful maximum and whether you must post it inside the unit.

Will my homeowners insurance cover short-term rental guests?

• Standard homeowners policies often exclude STR activity, so secure an STR endorsement or commercial policy and consider umbrella liability for added protection.

What issues most often trigger enforcement for Hot Springs STRs?

• Noise complaints, parking overflow, trash problems, unsafe conditions, operating without approvals, and unpaid taxes are common triggers that can lead to fines or stop-use orders.

Are there special rules near the Hot Springs National Park or in historic districts?

• Properties in historic or special districts may face additional reviews or limits on exterior changes, so confirm requirements with Planning & Development before renovations.