Short‑Term vs. Long‑Term Rentals: How Each Affects Our Local Community
The rise of short‑term rentals (STRs) like Airbnb and Vrbo has transformed the way people travel and invest in real estate—especially in vacation destinations like Hot Springs, Lake Ouachita, and the Ouachita Mountains. While these rentals create new opportunities for property owners and tourists, they also have significant effects on the local community, especially when compared to traditional long‑term rentals (LTRs).
In this post, we’ll break down the differences between STRs and LTRs, and explore how each affects housing availability, affordability, and the local economy.
1. Short‑Term Rentals (STRs)
Short‑term rentals are typically properties rented out for less than 30 days at a time, often to vacationers or business travelers.
Benefits for the Local Economy:
Boosts Tourism Revenue: STRs attract out‑of‑town visitors who spend money on dining, entertainment, and local attractions.
Higher Income for Owners: Hosts can often earn more per night than with a traditional long‑term lease, especially in peak seasons.
Encourages Property Improvements: Many owners renovate or upgrade their homes to appeal to travelers, which can improve property values.
Challenges for Locals:
Reduced Housing Availability: When more homes are used for STRs, fewer are available for families and local workers to rent long term.
Higher Housing Costs: Limited rental supply can drive up both rent and home prices for locals.
Neighborhood Impact: Increased turnover can mean more traffic, noise, and a “less residential” feel for neighbors.
2. Long‑Term Rentals (LTRs)
Long‑term rentals are properties leased for six months to a year (or more) to tenants who make the community their home.
Benefits for the Local Community:
Stabilizes Neighborhoods: Permanent residents help maintain a sense of community and support local schools, clubs, and events.
Reliable Housing Supply: LTRs ensure local workers, retirees, and families can find homes near their jobs and schools.
Steady Income for Owners: While usually lower than STR revenue, long‑term leases offer consistent cash flow without seasonal dips.
Challenges for Owners:
Lower Revenue Potential: LTRs often earn less annually than STRs in vacation markets.
Tenant Turnover Risks: Evictions, damages, or vacancies can still disrupt cash flow.
Less Flexibility: Landlords can’t use the property themselves on short notice.
3. How This Plays Out in Our Area
In Hot Springs, the demand for STRs has surged over the last few years, bringing both benefits and growing pains:
The city has capped residential STR licenses at 400 and is not issuing new permits in residential zones (as of July 2025) to help stabilize neighborhoods.
Local families have voiced concern about finding affordable long‑term housing, as homes are increasingly used for weekend visitors.
Around Lake Ouachita, STRs remain popular and profitable, but balance is essential to keep our community welcoming to both locals and tourists.
Takeaway: A healthy mix of STRs and LTRs is crucial. Overreliance on STRs can reduce housing options for locals, while LTRs alone may limit tourism‑driven revenue opportunities.
4. Tips for Property Owners
Consider a Hybrid Approach: Some owners offer seasonal short‑term rentals in summer and long‑term leases in the off‑season.
Know Local Rules: Stay updated on Hot Springs STR permits and county zoning rules before investing.
Be a Good Neighbor: Whether STR or LTR, maintaining property standards and respecting the community ensures sustainable growth.
5. Conclusion
Short‑term and long‑term rentals each play a vital role in our local economy and housing market. STRs drive tourism and revenue, while LTRs keep our community livable and connected. By understanding the impact of each and working within local guidelines, property owners can maximize their investment while supporting a thriving, balanced community.
