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Short-Term Rentals in Phoenix: The Capital of the American Southwest

Short-Term Rentals in Phoenix: The Capital of the American Southwest

Forget the inflatable flamingo, picture yourself basking in the warm Arizona sun, your pockets jingling with the sweet sound of rental income.

Phoenix, a vibrant metropolis pulsating with cultural energy, breathtaking landscapes and a booming economy, is a magnet for both tourists and investors. And what better way to tap into this thriving ecosystem than through the booming short-term rental market?

But hold your horses before you start decorating a guest room. Let's take a deep dive into the regulations, potential returns and prime neighborhoods that can make or break your vacation rental venture.

Remember, this isn't just any pool party — it's a strategic expedition towards building a successful short term rental empire in the heart of Phoenix!

Is Airbnb Permitted in Phoenix?

Yes, Airbnb and similar OTA platforms are permitted in Phoenix. Prospective hosts must obtain a city permit, a transaction privilege license for tax compliance, and register with the Maricopa County Assessor's Office. Navigate the licensing process to operate within the legal framework.

Utilizing short-term rental software can simplify this process ensuring you operate within the legal framework efficiently.

What Regulations Govern Short-term Rental Accommodations in Phoenix?

Regulations Govern Short-term Rental Accommodations in Phoenix

Phoenix has established comprehensive rules for operating short-term rentals, such as Airbnb or VRBO, to ensure compliance and community well-being. Here's a breakdown of the key regulations:

Permit and license requirements

Short-term rental operations must apply for and obtain a permit and license to operate accompanied by a $250 fee. The city is required to approve or deny applications within seven days of submission.

Display of permits

Approved short-term rental owners must prominently display their permits within 10 feet of the primary entrance of the rental property.

Platform compliance

Short-term rental platforms such as Airbnb and VRBO must ensure that listed properties possess the necessary permits before being featured on their platforms. Non-compliance may result in a daily $2,500 fine for the platforms.

Background Checks

Owners must undergo a criminal background check to confirm they are not convicted felons or registered sex offenders, prioritizing the safety and security of guests and the community.

Sex offender checks

Short-term rental owners are required to conduct sex offender checks on prospective guests, adding an extra layer of precaution within the community.

Notification to surrounding properties

Before commencing operations, short-term rental owners are obligated to send notices to neighboring properties, homeowners associations and neighborhood associations within a 600-foot radius, informing them of their intent to operate.

Appeal process

In case of city rejections, nonrenewals, or suspensions of licenses, short-term rental owners have the right to appeal, ensuring a fair and transparent process.

Liability insurance

Short term rental owners must maintain liability insurance of at least $500,000, providing financial protection and accountability in case of unforeseen incidents.

Is investing in Phoenix considered a profitable opportunity?

Absolutely! Phoenix is a popular tourist destination with a growing short-term rental market. As of September 2023, Phoenix boasts 3,958 registered short-term rentals, although residents believe this is an undercount.

But wait there’s more! With a growing number of tourists and an increasing demand for personalized accommodation experiences, the use of vacation rental software like Hostaway can help optimize your property management tasks, streamline guest communications and maximize occupancy rates potentially boosting your annual earnings significantly.

Also, according to AirDNA, the average gross nightly rate for an Airbnb in Phoenix was $260 with an occupancy rate of 55%. This means that you could potentially earn $52.7 yearly from your rental property.

Neighborhood Gems

Neighborhood Gems in Phoenix

Phoenix boasts diverse neighborhoods each with its charm and potential for STR success. Here are some shining stars:

Downtown Phoenix

Bustling with energy, nightlife, and cultural attractions like the Arizona Science Center, downtown attracts tourists and business travelers.

Imagine your rental as a chic haven in the heart of the action.


Luxury resorts, championship golf courses, and Rodeo Drive-worthy shopping?

Scottsdale caters to high-end clientele, offering premium rental potential. Think marble countertops and infinity pools.


Craving the charm of historic bungalows and sun-kissed mornings on your patio with Camelback Mountain as your majestic backdrop? Then Arcadia is your haven!

This neighborhood is a delightful blend of history and nature, perfect for families and outdoor enthusiasts.

Roosevelt Row

Nestled in a lively city, this hidden gem exudes electrifying energy. Live music flows through vibrant streets, blending with the scent of inventive cuisine and walls adorned with street art.

An artistic retreat, it magnetizes young professionals and creatives, offering a unique escape—a portal to a world of expression and vibrant experiences.


This upscale haven offers a mix of luxury resorts, family-friendly communities and breathtaking mountain views.

Cater to a diverse range of guests, from luxury seekers to families seeking adventure. Think spacious villas and serene outdoor spaces.

Utilizing Vacation Rental Software for Success

Achieving success in the Phoenix short-term rental market goes beyond merely owning a property; it demands savvy management and marketing.

The integration of an all-in-one short-term rental software or vacation rental software into your business approach can automate numerous operational tasks, improve guest satisfaction and boost your rental's visibility.

This tech isn't just a tool; it's a valuable ally for navigating the complexities of the short-term rental market.

Knowledge is Power

Investing in Phoenix STRs can be rewarding, but thorough research and understanding regulations are crucial.

Familiarize yourself with licensing requirements, zoning restrictions and neighborhood dynamics to make informed decisions.

With careful planning, a dash of creativity and a commitment to compliance, you can turn your Phoenix STR dream into a reality. So, grab your metaphorical map and compass and embark on this exciting adventure!

Ready to find out how Hostaway can transform your business?

Hostaway is proud to support thousands of Property Managers and Airbnb Hosts Around the world. We take in pride in being Top Ranked in Vacation Rental Software Review Sites: Capterra, G2, Software Advice, Trust Pilot, to name just a few! Check out our reviews and read the Hostaway Case Studies from real successful and growing Short-Term Rental Managers!