1st Advantage MortgageInvestors buying in Hot Springs, AR are measured on the rent the property earns. Locally, median gross rent is $914 and median real estate taxes are $816 a year, which together set how much loan a rent can carry.
Hot Springs by the Census numbers
Start with the two numbers every DSCR file turns on. Rent in Hot Springs runs a median $914 a month (close to the Arkansas median of $947), and the median owner-occupied home is worth $165,500. By the simple measure of annual rent over home value, Hot Springs sits at 6.6%, a middle-of-the-road gross ratio. Lenders do not underwrite a ratio like that, but investors use it to decide where to look first.
| Indicator | Arkansas | Hot Springs | Difference |
|---|---|---|---|
| Tax as a share of home value | 0.55% | 0.49% | -11% |
| Household income, median | $60,773 | $47,760 | -21% |
| Typical owner-occupied value | $188,000 | $165,500 | -12% |
| Typical monthly rent | $947 | $914 | -3% |
| Persons per household | 2.46 | 2.00 | |
| Share in 2-4 unit buildings | 6.5% | 9.9% | +52% |
| Share of homes detached | 70.0% | 62.6% | -11% |
| Long commuters, 45 min plus | 11.4% | 7.0% | -38% |
| Degree holders, age 25+ | 25.7% | 26.1% | +1% |
| Workers on their own account | 10.4% | 14.0% | +35% |
| Renters paying 30%+ of income | 44.8% | 49.1% | +10% |
| Units sitting vacant | 13.5% | 16.7% | +23% |
| Typical construction year | 1987 | 1973 | |
| Households that rent | 33.6% | 43.0% | +28% |
| Residents (Census estimate) | 3,049,391 | 37,920 |
43.0% of Hot Springs households rent, well above the Arkansas median of 34%. That is a healthy base of tenants without the churn of a pure student or military town. Median household income is $47,760, about 21% below the Arkansas median of $60,773, and 49% of renter households pay 30 percent or more of income on rent.
Housing stock and vacancy in Hot Springs
About 63% of Hot Springs's housing is detached single-family, which means a typical rental purchase is a house with its own roof, yard and repair schedule. Homes here date to 1973 at the median, which is old enough to need system replacement but modern enough to avoid the worst surprises.
Roughly 17% of units in Hot Springs sit vacant, and the share of rentals available for rent is 9.2% at the survey's snapshot.
What stands out in Hot Springs
Hot Springs's 6.6% yield is workable. Expect most single-family rentals to land near the lender's minimum ratio, so details like taxes after reassessment matter. Housing here is neither new nor ancient, so condition varies widely from block to block and the inspection tells you more than the median. With about 43% of households renting, Hot Springs has enough tenants to support investors without being dominated by them.
Taxes, insurance and hazards in Hot Springs
Property taxes in Hot Springs run a median $816 a year for owners, about 22% below the Arkansas median of $1,040. As a share of median value, that is about 0.49%. In rent terms, the tax bill equals roughly 7% of twelve months of median rent.
For hazards, FEMA's National Risk Index puts Garland County at a relatively moderate overall rating, and its top-ranked hazards are ice storms (very high), strong wind (relatively high) and tornadoes (relatively high).
| Hazard in Garland County, FEMA index | Level |
|---|---|
| Hail exposure | Relatively High |
| Tornadoes exposure | Relatively High |
| Strong wind exposure | Relatively High |
| Ice storms exposure | Very High |
| Social vulnerability score | Very High |
| Annualized loss estimate | Relatively Moderate |
| Composite risk | Relatively Moderate |
Many investors meet insurance too late, so get a quote tied to the Hot Springs property's roof age and flood zone before you waive your inspection period.
Running the numbers in Hot Springs
Take the median rent ($914), subtract median taxes spread over twelve months ($68), and you have $846 of room at a 1.00 ratio. A lender asking for 1.25 cuts that to $663. Real quotes for the address decide the rest.
Rental rules for Hot Springs, AR
This page does not claim to list every Hot Springs rental ordinance. Before you buy, call the city's planning or code office and Garland County to ask about rental registration, inspections and short-term rental permits, and read any association declaration. State tax treatment of short stays, as it applies to Hot Springs. Arkansas adds a state tourism tax on transient lodging to its sales tax, with local taxes on top, and marketplaces such as Airbnb generally collect the state taxes for bookings they process while hosts answer for local taxes the platform does not collect.
The return clock runs 60 days from move-out in Arkansas, so Hot Springs landlords should keep move-in photos and repair receipts.
Neighbors of Hot Springs by the numbers
Prices in the comparison range from $178,900 in North Little Rock to $252,100 in Conway, with Hot Springs at $165,500.
| Market | Renter share | Tax bill | Home value | Residents | Rent |
|---|---|---|---|---|---|
| Conway | 55% | $1,467 | $252,100 | 67,642 | $1,011 |
| North Little Rock | 55% | $1,591 | $178,900 | 64,538 | $1,069 |
| Little Rock | 46% | $1,902 | $236,400 | 203,436 | $1,106 |
| Benton | 32% | $1,352 | $212,700 | 36,595 | $1,072 |
| Hot Springs | 43% | $816 | $165,500 | 37,920 | $914 |
Employers and institutions near Hot Springs rentals
Self-employed workers, incorporated or not, make up 14.0% of employed residents, a group that often has irregular tax-return income and a natural fit with rent-based qualification. The same survey shows government workers are about 10% of employment, 26% of adults hold a bachelor's degree or higher and 7% of commuters travel 45 minutes or more.
Colleges tied to Hot Springs include University of Arkansas System, National Park College and Champion Baptist College, and campus-adjacent streets often rent to students and staff on a school-year rhythm. Hot Springs offers interstate access via I-30 and air service through Memorial Field Airport and Little Rock National Airport, details that affect commute times and how easily a distant investor can inspect a property.
Taking a Hot Springs deal to a lender
Ready to test a Hot Springs deal? Use the calculator for the ratio, then start your application or send us the scenario.
More Arkansas markets
- All Arkansas DSCR loans
- DSCR loans in Benton, AR
- DSCR loans in Little Rock, AR
- DSCR loans in North Little Rock, AR
- DSCR loans in Conway, AR
- Every market we cover
Sources and data notes
- Encyclopedia entry for Hot Springs
- Arkansas landlord deposit rules, Ark. Code 18-16-303, 18-16-304, 18-16-305, 18-16-306
- For nightly stays in Hot Springs: Arkansas DFA, sales and use tax rates
- American Community Survey tables, Arkansas
- FEMA National Risk Index
The Hot Springs statistics are five-year ACS estimates (2020 to 2024), which have sampling error. The Arkansas legal summaries are from the RedFlagLease dataset, licensed CC BY 4.0, with statute links. Our check date is October 2026, so look for newer Hot Springs rules before you commit.
A short buyer checklist
Ask the seller for twelve months of utility bills and any lease on the Hot Springs property, confirm who pays water, trash and lawn care, and get the insurance quote before the inspection period ends so the ratio is tested on real numbers.
DSCR loan availability varies by property and lender program and is not an offer to lend. See our disclosures.
Frequently asked questions
Lease or market rent: what counts in Hot Springs?
Expect to supply a lease, or let the appraiser's rent schedule stand in for one; the Hot Springs median rent of $914 is context and not a substitute.
Does the ratio in Hot Springs include taxes and dues?
They count in full. A 1.25 ratio on $914 of rent permits a payment near $731, and median Hot Springs taxes take about $68 of it each month.
How much real estate tax do Hot Springs homeowners pay a year?
Typical owners pay $816, or 0.49% of home value, with Arkansas overall at 0.55%. Do not assume the seller's bill carries over to you.
Do DSCR lenders count short-term rental income in Hot Springs?
Often, with conditions: legal use under city and association rules, documented income and an insurance policy that covers guests. Hot Springs owners should check all three first.
What are the security deposit rules for a Arkansas landlord?
Return: 60 days. Statute: Ark. Code 18-16-303, 18-16-304, 18-16-305, 18-16-306. Confirm current text before you rely on it.
What does FEMA say about hazard risk near Hot Springs?
At the county level FEMA calls overall risk relatively moderate. Insurance, not the index, shows up in the ratio, so price a policy for the Hot Springs address.
Should a Hot Springs rental be bought in an LLC?
Not required. An LLC borrower is routine for investor programs, with entity paperwork and a guaranty. Form the company before you go under contract in Hot Springs.