Cleaning & turnovers
Every stay needs a professional turnover, and busy weekends stack same-day turns. It's a recurring per-booking cost, not an afterthought — and it directly shapes your calendar and minimum-stay rules.
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Underwriting honestly
The numbers, without the hype
Revenue is ADR × occupancy × nights. Profit is what's left after a real expense stack and the lodging tax. We teach the framework — we don't publish made-up occupancy or income figures.
The revenue side: three levers, not one
Short-term rental revenue comes down to a simple formula with three moving parts: ADR × occupancy × nights available. ADR (average daily rate) is what you charge per night; occupancy is the share of available nights that actually book; and nights available is how many nights you list (net of owner use and blocked maintenance days). In a market like Hot Springs, all three swing hard by season — an Oaklawn-season or lake-summer weekend commands a very different rate and fill than a quiet mid-week in the off-season. That seasonality is why an annual average, not a single good weekend, is the only honest basis for planning.
We deliberately do not publish specific ADR, occupancy, or annual-revenue numbers for Hot Springs here, because real figures depend on the exact property, area, condition, and the moment you look — and a made-up number is worse than none. Pull your own comparables from the booking platforms for genuinely similar, nearby, currently-active listings, and be conservative. Build your own pro forma and have a CPA review it before you rely on any projection.
Real costs
The expense stack people forget
Gross booking revenue is not income. These line items separate a real return from a spreadsheet fantasy.
Management & platform fees
Full-service local management commonly runs roughly 20–30% of revenue if you don't self-host, and booking platforms take their own cut on top — model both as a percentage of gross, not a footnote.
Furnishing & reserves
A rental has to be fully furnished, equipped, and photographed up front, then continually restocked and repaired. Budget the initial furnishing spend and an ongoing reserve for wear, damage, and replacement.
Lodging tax, insurance & utilities
You typically collect and remit Arkansas state and local lodging plus sales taxes, and you carry short-term-rental-appropriate insurance, utilities, internet, and supplies year-round — see our local rules page on the tax obligations.
Seasonality, financing, and a sane process
Because demand here is spread across the National Park, Oaklawn, lake, and fall seasons, a smart pro forma models the year month by month rather than assuming a flat rate — your strong months have to carry your soft ones, and your fixed costs (loan, insurance, utilities) run every month regardless. Stress-test it: what does the deal look like at a lower occupancy, a higher management fee, or an off year for lake travel? If it only works in the best case, it doesn't work. Financing a property you intend to rent nightly can also differ from a standard second-home loan, so be upfront with your lender about the intended use.
Underwrite in this order: (1) confirm short-term rental is actually permitted at the address; (2) estimate revenue conservatively from real, current comparables; (3) subtract the full expense stack including lodging tax; (4) subtract financing and a reserve; and (5) have a CPA review the whole model. This is general information, not legal, tax, or investment advice — consult a licensed Arkansas attorney, CPA, or real-estate professional and verify current rules before you act.
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