Arizona Airbnb: How to Carve a Niche for Your Vacation Rental

Affectionately nicknamed The Grand Canyon State, Arizona has loads more to offer than just the Grand Canyon. There are hiking trails, biking trails, national parks, and the mighty Colorado River. Whether you prefer a hot, desert landscape or a cold, ski resort, you can find both in Arizona. It’s pretty much the perfect getaway for adventure seekers. 

To help you carve a name for yourself as one of the best vacation rentals in Arizona, here’s a closer look at tax considerations, local laws, and investment-worthy cities to consider. For inspiration, you can also refer to 10 of the top-rated Arizona Airbnbs included at the end of this blog post. 

Taxes in Arizona: What Can You Expect?

In the state of Arizona, Airbnb guests will need to pay the following taxes when they book a vacation rental for stays shorter than 30 days:

  • An Arizona Transaction Privilege Tax of 5.5% of the listing price (inclusive of cleaning fees)
  • A county excise tax that can be anything from 0.28% to 6.5% of the listing price (inclusive of cleaning fees) 

In addition to these taxes, guests will also be charged one or more local transient occupancy taxes that can include:

  • A Transaction Privilege Tax
  • Transient Lodging Tax
  • Bed Tax
  • Hotel-motel Tax

The amount varies from one city to the next, but generally it ranges between 1.5% and 6%. 

Short-term Rental Regulations in Arizona: What Does the Law Say?

As with other short-term rental markets in the United States, the regulations differ from one state to the next. On top of that, each city can also have its own local rules that you’ll need to plan around. 

For example, in Tucson, you’ll need to have a valid business license. As for regulations, there’s the Unified Development Code and the Land Use Code. Hosts who’ve owned their property since 2012 have the option of choosing which one of these codes they want to follow. 

Aside from these codes, you’ll also need to keep in mind the building and housing standards. Here, you’ll find more guidelines about minimum construction, design, and maintenance regarding residential and non-residential use. 

In Phoenix, the picture is similar. While no specific mention is made of a business license, all vacation rentals must be registered with the city. Upon successful registration, the city will then provide a vacation rental registration number. 

You’ll also need to adhere to the Short-term Vacation Rental Ordinance. Failure to do this can result in hefty penalties, starting at a few hundred dollars for the first offense.  

Other Important Considerations for Airbnbs in Arizona 

  1. Location

According to Mashvisor’s recent data, the following are the top five destinations in Arizona for Airbnbs:

  • Glendale
  • San Tan Valley
  • Waddell
  • Surprise
  • Prescott

What makes these five cities great areas to invest in are their median property prices, monthly rental income, and occupancy rate. In these cities, you’ll be able to pick up a property for less than $1 million, while you can look forward to a minimum rental income of $2,000 and an occupancy rate of at least 50%. 

  1. Amenities

The weather in Arizona can differ quite significantly, depending on the area. Sure, it’s mostly hot and dry, but snow-covered mountains and cooler temperatures are also on the cards. 

To ensure that your guests enjoy a comfortable stay, here are some amenities that can make all the difference:

  • A hot tub or heated pool 
  • A swimming pool
  • A fire pit
  • Air conditioning
  • An indoor fireplace

As mentioned, Arizona is also popular for outdoor activities. If you’re not located close to national parks or hiking trails, you can still give guests a sense of great outdoor living by creating an inviting outdoor space. Features like an outdoor patio overlooking the desert landscape or mountain views can help create a memorable Arizona getaway. 

10 of the Best Airbnbs in Arizona

Whether you’ve invested in a modern condo or guest house, here are 10 examples of how you can turn your vacation rental into the perfect location.  

  1. A Historic Home Near Sedona

Situated on the greenbelt of Cottonwood, this property is all about historic charm. Guests will be staying in the Verde Dairy Cottage and it serves as a great example of how modern amenities and old-world charm can meet. 

The cottage itself is nearly a century old and used to be part of a dairy farm. Now, it offers creature comforts like a surround sound speaker system, gas firepit, air conditioning, and a flatscreen TV with streaming services like Amazon Prime. Some of its other standout features include a fully stocked kitchen fitted out with a coffee maker, dishwasher, and several other appliances to make your stay even more comfy. 

As for the sleeping space, it features two loft areas. It also has a sofa bed in the main area of the home. It’s a classic example of how hosts can use other spaces to accommodate more guests. 

It might not be that close to the Grand Canyon, but guests have full river access. It also offers a spacious front yard with an exterior porch, where guests can soak up their outdoor surroundings and kids can enjoy outdoor activities.  

  1. The Cowgirl Cabana Close to Lower Antelope Canyon

For an example of how you can incorporate pops of color, there’s this bungalow located in Page. It might be on the small side, but it still manages to offer all the essentials that travelers need like a kitchenette, barbecue, and even a king bed. 

Its biggest attraction is probably the prime location. It’s only a few minutes away from Horseshoe Bend and Antelope Canyon. Everything in downtown Page can be accessed by foot. If you prefer to be treated to mountain views instead, you can rather hike in the direction of the Rim View Trail which is accessible from your doorstep. This loop around Manson Mesa features views of Lake Powell, Glen Canyon, and the Navajo Mountain. 

  1. Designer Historic Duplex Walking Distance from Downtown Phoenix

This historic duplex dates all the way back to the 1930s and has recently been remodeled by a designer. Situated minutes away from Downtown Phoenix, it features two bedrooms, one with a king bed and the other with a queen bed, and can comfortably accommodate up to four guests. 

The interior is one of its bestselling attractions. It has retained the original oak plank wood floors, large windows for loads for natural light, a decorative fireplace with exposed brick, and several original art pieces. 

It also features a dedicated workspace in the common space and fast Wi-Fi. Plus, the host also accommodates long-term stays of 28+ days, making it suitable for digital nomads and business travelers.

  1. Earthen Home in Cave Creek

For a truly unique stay, there’s “The Kiva”. The property features 10-foot ceilings, Indian flagstone floors, and a cozy, lofted bedroom area. Though, this isn’t where guests will spend most of their time. 

It’s situated on a private acre lot which means that guests can enjoy outdoor living at its finest. 

The outdoor fire pit and barbecue area are perfect for enjoying the desert landscape and mountain view. There are also walking trails for those who want to explore nature even more intimately. 

  1. A Three-bedroom Dome in West Sedona

For another example of what a unique vacation experience can look like, there’s this fully furnished dome. It’s located in West Sedona in a quiet, residential area, while at the same time being close to amenities like local restaurants.  

It’s a geodesic dome home that offers three bedrooms, two bathrooms, a fully equipped kitchen, and a spacious open living area. There are loads of skylights that keep this space light and airy. 

The outdoor living space is equally inviting. Outside there’s also a beautiful patio from where guests can take in scenic views of Cathedral Rock. 

It’s a great place for families with kids to enjoy. The superhost took extra care to include children’s books and toys to keep the younger visitors busy. 

Digital nomads will also find it comfortable. There’s a dedicated workspace (in a room with a door), Wi-Fi access as well as a coffee maker. What’s more, long-term stays of 28 days or longer are also welcomed. 

  1. A Cozy Cabin in Fredonia

For an example of how rustic charm can land you hundreds of reviews, there’s this tiny house that’s situated on a 400-acre ranch. Dubbed Lyman’s Place, it’s an original homesteader’s one-room cabin that features original wood plank floors, lumber beams, and hand-finished cob walls. To make guests’ stay more special, the kitchenette includes basic breakfast items. 

While the cabin on its own offers a unique experience, it’s the remote location that guests will probably explore the most. There are two reservoirs about 10 minutes away that are ideal for kayaking, a firepit area, and an adjacent treehouse. 

During the open season which stretches between May and December, it’s also two hours away from the North Rim. Otherwise, guests can enjoy a first-hand encounter of farm life with free range chickens right on their doorstep. 

  1. Luxury Sky Dome in Williams

This large dome is an example of how you can combine the best of both worlds – a resort setting with privacy. The dome features a climate-controlled room with a big, panoramic window, homemade log bed set, privacy curtains, a private, modern bathroom, and a telescope for ultimate stargazing.   

It’s hosted by Clear Sky Resorts and their focus is on offering next-level stays near the Grand Canyon National Park. There’s also a Welcome Dome lounge where guests can enjoy complimentary drinks during happy hour. As you would expect from a resort setting, there are loads of nearby activities. From helicopter rides to horseback riding, young and old will be kept busy. 

  1. A Three-bedroom House with EV Charger in Lake Havasu City

This vacation rental in Arizona is a good example of how you need to ensure that you keep up with the times. Included in its amenities is an EV charger, along with the other modern amenities such as air conditioning, multiple flat screen TVs, a hot tub that can accommodate up to eight guests, and even a bigger swimming pool.   

While there are plenty of things to do at the property, guests are also close to London Bridge Beach, casinos, and other nightlife attractions. 

  1. The Pool House in Scottsdale

For the ultimate example of a private pool, you can check out this Airbnb rental located in Scottsdale. More than half a million dollars were spent on creating this massive swimming pool alone to create the sense of a resort setting. 

This vacation rental is all about making outdoor spaces the main attraction. Aside from the huge pool, there are also various outdoor games and activities like putting greens, a basketball court, and a golf driving range cage. 

  1. Old Town Family House Near Old Town Scottsdale

This vacation rental is another example of what you can do if you have loads of space. Located near Old Town Scottsdale, the property can accommodate up to 24 guests! Instead of marketing the property as the perfect romantic getaway destination, the superhost targets guests planning multi-family vacations, women’s retreats, or golf trips, for example. 

In addition to the five bedrooms and 4.5 bathrooms, it also features:

  • A dedicated workspace in a common area equipped with Wi-Fi
  • Self-check-in
  • Open kitchen
  • Swimming pool
  • Table tennis table
  • Foosball table

Reach Higher Heights by Automating

Arizona might be a hot rental market, but it requires your round-the-clock attention to be one of the best Airbnbs in Arizona. After you’ve figured out the local laws, got the hang of tax, and furnished your vacation rental with the right amenities, you’ll still need to take care of continuous tasks like guest communication, reviews, property maintenance, etc. 

Without extra help, you can quickly feel as if you’re standing at the edge of a cliff and the view won’t be as breathtaking as the Grand Canyon. It will take away your breath in a different kind of way, though. 

To prevent you from feeling overwhelmed, it’s best to add a robust vacation rental software to your tech stack. You can, for example, check out a tool like iGMS. It’s one of 25 software solutions included in Capterra’s 2023 Vacation Rental Software Shortlist, making it one of the hottest tools currently available on the market. It offers:

Don’t be left high and dry — start your free 14-day trial today.

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