Rental Property in Arkansas: What the Numbers Actually Look Like

On paper Arkansas is the friendliest rental math in this series. The effective property tax rate is 0.54% — the lowest of the seven Southern states covered here. Closing costs run 2% to 4%, the cheapest and narrowest band of the seven. The statewide average premium at $300,000 of dwelling coverage is $3,374, second-lowest. And the most recent published appreciation figure is +3.40% a year, second-highest.

The worked example below still loses $552.67 a month. It is the closest to breaking even of any state in this series, and it is still a loss — which is the honest headline for a low-cost Southern market at 2026 financing costs.

There are two things a low headline hides here, and neither is a cost line.

The first is that Arkansas has no insurer of last resort at all — no FAIR plan, no windstorm pool, no state-backed backstop of any kind. That is confirmed, not merely unverified: Arkansas is absent from the rosters of the roughly 33 states plus DC that operate one. A property declined by the admitted market, most often for roof age or hail claim history, goes to the surplus-lines market, which typically costs more and frequently writes narrower terms including actual-cash-value roof settlement.

The second is that Arkansas sits squarely in the severe convective storm corridor — tornado, straight-line wind and hail — and its carriers have moved decisively onto separate percentage wind-and-hail deductibles. Because that is carrier practice rather than Arkansas statute, the percentage is negotiable at the point of sale, and almost nobody negotiates it.

A note before you start: this is general educational information about how rental property arithmetic works in Arkansas. It is not investment, tax, insurance, or legal advice, and it is not a recommendation about any property. Arkansas insurance is priced per structure — roof age and material above all, plus construction, claim history, and hail territory — and property tax is administered county by county. Talk to an Arkansas CPA about tax treatment, a licensed Arkansas insurance agent about a real quote, and an Arkansas attorney about anything contractual.

1. What a rental costs to buy here

The Arkansas statewide median home price is $284,111.

Arkansas's real property transfer tax is 0.33% ($3.30 per $1,000 of consideration), and it is customarily paid by the seller. There is no mortgage recording tax, no documentary stamp on the note, and no intangible tax — so unlike Oklahoma, Virginia or Florida, the Arkansas buyer has no state transaction tax of their own.

Arkansas is an escrow closing state — one of only two in this series that is not attorney-closed. Expect a title company and escrow agent rather than a closing attorney, which is generally the cheaper structure.

Closing costs run 2% to 4%, the narrowest and lowest band of the seven states here. This article uses the 3% midpoint.

On the $284,111 statewide median at 25% down:

• Down payment: $284,111 x 0.25 = $71,027.75
• Loan amount: $213,083.25
• Closing costs: $284,111 x 3% = $8,523.33
• Buyer transfer tax: $0 (customarily the seller's)
• Total cash in: $79,551.08

Compare that to Mississippi, where a house costing $789 more requires $5,918.92 more cash to buy because the closing-cost band runs 4% to 6%. The Arkansas advantage is real and it is at the front of the deal.

On price growth, Arkansas's most recent published appreciation figure is +3.40% a year — about $9,659.77 on this house, which is more than the annual cash loss Section 3 computes. That is an unusual position in this series and worth stating carefully: it does not mean the property makes money. Appreciation is unrealized, it is a backward-looking published print rather than a forecast, it does not service debt, and you cannot spend it without selling or refinancing. But an Arkansas analysis is one of the few here where the appreciation column is doing real work rather than rounding to nothing.

The homestead credit you will not get

Arkansas's homestead relief works differently from most states. Amendment 79 to the Arkansas Constitution provides a credit that directly reduces the tax bill on an owner-occupied primary residence rather than exempting a dollar amount of assessed value. The credit was $375 for many years, rose to $425 (2023 bills), then $500 (2024-2025 bills), and the General Assembly authorized a further increase to $600 beginning with 2026 tax bills — though some county assessor pages still show the older figures pending full rollout.

A rental gets none of it. On the $284,111 example the tax bill is $1,534.20, so a $600 credit is 39% of the entire bill. That makes the listing-tax-bill trap unusually severe in Arkansas: an owner-occupied seller's bill can be nearly 40% below what you will pay. Compute the tax from the purchase price at the county rate and add nothing back.

There is a second Amendment 79 mechanism that does apply to you, and it is a mild positive. Amendment 79 caps the annual increase in taxable assessed value following a county-wide reappraisal at 5% a year for a homestead and 10% a year for non-homestead property, until the property reaches full assessed value. So a rental is capped, just at twice the homeowner's rate. In a fast-appreciating county — Benton, for instance — that cap is worth something.

2. The two expenses that decide whether it works

Property tax: the lowest rate in this series

Arkansas's effective property tax rate is recorded here as 0.54%, and sources cluster unusually tightly:

• Tax Foundation: 0.56%
• SmartAsset: 0.52%
• TaxByCounty: 0.52%
• WalletHub-derived (via Motley Fool): 0.532%

The range is 0.52% to 0.56%, and 0.54% is the midpoint. On the $284,111 example: $284,111 x 0.54% = $1,534.20 a year, or $127.85 a month.

County rates matter but the spread is modest by regional standards. Benton County is 0.54% — identical to the state figure. Pulaski County (Little Rock) is 0.74%, about 37% above it. That difference is worth $568.22 a year on this house.

Insurance: cheap on average, and the average is the least reliable number here

The reference figure is $3,374 a year at $300,000 of dwelling coverage with a $1,000 typical all-perils deductible.

Arkansas is the state in this series where sources disagree the most, and you should treat the average with real suspicion:

• NerdWallet: $4,955 (at a larger $400,000 dwelling limit, $300,000 liability, $1,000 deductible, no recent claims)
• U.S. News: $3,762
• Insure.com: $3,720
• LendingTree: in the same low-$3,000s range

Some of that spread is coverage level rather than genuine disagreement — NerdWallet's figure is at a limit a third larger. But even among the $300,000-ish reads the gap is several hundred dollars, and the honest statement is that a credible Arkansas average lands somewhere between roughly $3,374 and $4,955 depending on whose sample and which limit.

Here is what that uncertainty costs you. Take the identical $284,111 house at the identical rent and tax rate, and change only the premium:

The disagreement between sources — not any real difference in the property — is worth 0.61 percentage points of cap rate and $144.84 a month. For comparison, Section 3 shows a full percentage point of mortgage rate is worth about $1,717 a year, or $143 a month. In Arkansas, the uncertainty in the insurance average is worth more than a full point of rate. That is the argument for getting a real quote before you make an offer, stated in the only terms that matter.

At $3,374, the premium is $281.17 a month — 2.20 times the property tax bill, 16.07% of gross rent, and 37.74% of all operating expenses.

A rental is not insured on a homeowners form. You need a landlord policy — a dwelling fire form with loss-of-rents coverage — priced for the specific address.

The wind and hail deductible, and the fact that it is negotiable

Arkansas sits in the severe-convective-storm corridor — tornado, straight-line wind and hail, not hurricane — and its carriers have moved decisively onto separate percentage wind-and-hail deductibles.

The common structure is a wind/hail deductible of 1% to 5% of the dwelling limit, with 1% to 2% prevailing, sitting alongside a much smaller flat all-other-perils deductible on the same declarations page.

On a $300,000 dwelling limit:

• 1% = $3,000
• 2% = $6,000
• 3% = $9,000
• 5% = $15,000

Against a $1,000 flat deductible for a kitchen fire.

Here is the part specific to Arkansas, and it is the most actionable sentence in this article: this is carrier practice, not an Arkansas statute. The state does not legislate a deductible menu the way Florida does with its mandatory-offer law. So the percentage is negotiable at the point of sale, and it is worth negotiating. Ask what it costs in premium to move from 2% to 1%, and compare that annual premium difference against the $3,000 of retained risk you are buying back. Most buyers accept whatever the quoting system defaults to.

One clarification, because it causes confusion: Arkansas is not on the Insurance Information Institute's hurricane/windstorm deductible list. That list covers coastal states. The absence reflects the peril, not the absence of a percentage deductible. Arkansas policies carry them.

Section 3 works out that this rental produces $10,379.80 of net operating income in a good year:

• A 1% deductible ($3,000) is 28.9% of a full year's NOI
• A 2% deductible ($6,000) is 57.8% of NOI
• A 3% deductible ($9,000) is 86.7% of NOI
• A 5% deductible ($15,000) is 144.5% of NOI — 1.45 years

You cannot pass any of it to a tenant. It is not a lease obligation and it is not billable.

Two more Arkansas mechanics, and one distinct trap

Roof settlement. Arkansas has no matching statute, no matching regulation and no reported matching caselaw, and nothing in Arkansas law fixes whether a roof claim settles at replacement cost or actual cash value. The policy wording and the roof's age decide it.

Arkansas's position in a high-frequency hail and tornado corridor shapes the endorsements carriers attach here. Replacement cost is standard on newer roofs, while roof surface payment schedules and actual-cash-value wind and hail roof endorsements are common past roughly 15 years. On a schedule, a 15-year-old architectural shingle roof might be paid at roughly 40 to 60 cents on the dollar before the deductible comes off — and a separate percentage wind/hail deductible often applies on top of that.

Work that through on a $14,000 roof: at 50 cents on the dollar the carrier owes $7,000, less a $6,000 2% deductible, leaving $1,000 on a $14,000 bill.

The distinct trap: cosmetic-damage exclusions. These are common in the Arkansas market and are a different thing from the settlement basis. A cosmetic-damage exclusion pays nothing for hail dents that do not affect the roof's function — regardless of whether the policy is replacement cost or actual cash value, and regardless of the deductible. You can hold an RCV policy with a 1% deductible and still collect zero on a dented but functional metal roof. Ask specifically whether a cosmetic-damage exclusion is attached. It will not be obvious from the declarations page.

Nationally, in March 2026 the Federal Housing Finance Agency relaxed Fannie Mae and Freddie Mac requirements so ACV roof coverage can satisfy a lender rather than replacement cost being required.

Mitigation money, and it is generous here. Arkansas's policy response to hail and wind losses has been mitigation rather than a residual market:

• Act 427 of 2025 requires property insurers to offer premium discounts of 20% to 35% for IBHS FORTIFIED-certified homes.
• Strengthen Arkansas Homes, created by the same act and funded from insurance premium taxes, pays up to $15,000 toward a FORTIFIED roof on an existing home and up to $7,500 on new construction. It took effect January 2026.
• Arkansas is also one of the states where the Federal Home Loan Bank of Dallas FORTIFIED Fund offers grants of up to $15,000 toward a qualifying roof replacement.

On a $3,374 premium, a 20% to 35% discount is worth $674.80 to $1,180.90 a year — between 40% and 69% of a full point of mortgage rate, permanently, for a retrofit the state may pay for. Given that Arkansas has no residual market and roof age is the leading reason properties get declined, this is the single highest-leverage move available to an Arkansas landlord. Note carefully that a grant pays for a stronger roof; it does not change how a claim on that roof is valued. Those are two separate problems and you need both solved.

No insurer of last resort

Arkansas operates no FAIR plan, no windstorm pool, and no state-run insurer of last resort — confirmed, not merely unchecked.

A homeowner declined by the admitted market in Arkansas — most often for roof age or hail claim history — has no state backstop and must go to the regulated surplus-lines market. Surplus lines typically costs more and frequently writes narrower terms, including actual-cash-value roof settlement as standard rather than as an endorsement.

For a landlord, that turns roof condition from a maintenance item into an insurability question, and insurability into a financing question. A lender will not close on a property you cannot insure. Two hail claims and a fifteen-year-old roof is a plausible path from admitted carrier to surplus lines to a property only a cash buyer will take.

3. A full worked example

The property. A single-family house at the Arkansas statewide median of $284,111.

The rent — read this carefully. This site does not carry rent data. The $1,750 a month used below is an assumption chosen to be plausible for a house at that price. It is not a market observation. Pull three to five real comparable listings for the specific neighborhood and substitute the actual number.

The other assumptions:

• Vacancy: 8% of gross rent (roughly one month of turnover a year)
• Property management: 10% of collected rent
• Repairs and maintenance: 5% of gross scheduled rent
• Capital reserve: 5% of gross scheduled rent
• Financing: 25% down, 30-year fixed at 7.00% — the rate is an assumption, not a quote
• No HOA

Step 1 — income

• Gross scheduled rent: $1,750 x 12 = $21,000
• Vacancy loss: $21,000 x 8% = $1,680
• Effective gross income: $21,000 - $1,680 = $19,320

Step 2 — operating expenses

Management is charged on rent actually collected, not scheduled rent:

• Management: $19,320 x 10% = $1,932
• Property tax: $284,111 x 0.54% = $1,534.20
• Insurance: $3,374
• Maintenance: $21,000 x 5% = $1,050
• Capital reserve: $21,000 x 5% = $1,050
• Total operating expenses: $8,940.20

Expense ratio: $8,940.20 / $19,320 = 46.27% of collected rent — comfortably inside the 35% to 55% band most rentals land in.

Step 3 — net operating income and cap rate

• NOI = $19,320 - $8,940.20 = $10,379.80
• Cap rate = $10,379.80 / $284,111 = 3.65%

That is the highest cap rate of the seven Southern states in this series. The mortgage is deliberately absent from it. Cap rate exists to compare properties independently of how they are financed; putting debt service into it is the most common error in this exercise, and it makes two identical houses look like different investments because one buyer put more down.

Step 4 — debt service and cash flow

Loan: $284,111 x 75% = $213,083.25. At 7.00% over 30 years, principal and interest is $1,417.65 a month, or $17,011.80 a year.

• Annual cash flow = $10,379.80 - $17,011.80 = -$6,632.00
• Monthly cash flow = -$552.67
• Debt service coverage ratio = $10,379.80 / $17,011.80 = 0.61

Step 5 — cash-on-cash return

• Cash invested: $79,551.08 (Section 1)
• Cash-on-cash = -$6,632.00 / $79,551.08 = -8.34%

Rate sensitivity, since 7.00% was an assumption

• At 6.50%: P&I $1,346.83/mo, annual cash flow -$5,782.16
• At 7.00%: P&I $1,417.65/mo, annual cash flow -$6,632.00
• At 7.50%: P&I $1,489.91/mo, annual cash flow -$7,499.12

A full point of rate is worth about $1,717 a year — and Section 2 showed the disagreement between insurance sources is worth more than that.

The simplest version of the same finding

Add up the three bills a lender escrows:

• Principal and interest: $1,417.65
• Property tax: $1,534.20 / 12 = $127.85
• Insurance: $3,374 / 12 = $281.17
• Total: $1,826.67 a month

Against $1,750 of assumed rent, that is -$76.67 a month. That is the narrowest gap in this series, and it is exactly the situation in which the naive check misleads most badly — because at $77 a month it is easy to believe a small rent increase fixes the deal. Section 4 is about why it does not.

4. The expenses people leave out

Vacancy, management, and capital reserves do not arrive as invoices. Nobody bills you for the month the house sits empty, or for the roof you will need in nine years, or — if you self-manage — for your own weekends. So they fall out of the mental model, and the property looks better than it is.

Arkansas produces the largest version of this distortion in the series, precisely because its other costs are so low: with a small tax bill and a small premium, the three omitted lines make up a bigger share of what is left.

Here is the same house with those three removed and everything else identical:

The three omissions are worth $4,662 a year of net operating income — $1,680 of vacancy, $1,932 of management, $1,050 of reserve. They flatter the cap rate by 1.64 percentage points and hide 70% of the annual loss — the highest share of any state in this series.

Look at what the left column tells you. A 5.29% cap rate and -$164 a month reads as a deal that a $200 rent bump turns positive. That is a completely different investment decision from a 3.65% cap rate and -$553 a month, which needs $553 a month and is not getting it. Same house, same day, three lines nobody invoices you for.

The left column's expense ratio is 28.37% — well below the 35% floor of the range most rentals land in. That is the tell, and the site's rental calculator will flag it rather than letting it pass.

Vacancy. Eight percent is roughly one month a year, which is what a single clean turnover costs between move-out and the next tenant's first full month. Setting it to zero assumes the house is never empty, including between tenants.

Management. Set it to zero and the return is paying you for your own labor rather than for the property. Self-managing this house saves $1,932 a year, lifting NOI to $12,311.80 and the cap rate to 4.33%, with cash flow improving to -$391.67 a month. It is the largest single improvement available short of changing the price, and it does not fix the deal.

Capital reserves. Roofs, HVAC, water heaters, and flooring have known lives, and in Arkansas the roof clock is set by hail and by carrier underwriting rather than by the shingle warranty. Section 2 explains that carriers start depreciating or declining roofs around 15 years, and that a claim past that point can net a fraction of the repair cost after the percentage deductible.

The 5%-of-rent convention above gives you $1,050 a year. Read that against a 2% deductible of $6,000: the reserve funds one deductible in 5.7 years, in a state carriers price as a high-frequency hail market. A harsher and equally common convention is 1% of purchase price a year for maintenance and 1% for capital, which here is $2,841.11 each. Run that way: total operating expenses $12,522.42, expense ratio 64.82%, NOI $6,797.58, cap rate 2.39%, cash flow -$851.19 a month, cash-on-cash -12.84%, DSCR 0.40.

So the honest cap-rate range for this property is 2.39% to 3.65%. Choose one convention deliberately, and in a hail state lean toward the harsher one.

What would actually have to be true

The rent this property needs. For cash flow to reach zero at this price and this financing, gross scheduled rent must reach about $30,109.89 a year, or $2,509.16 a month — 0.88% of purchase price per month, the lowest breakeven bar of the seven Southern states in this series. The assumed $1,750 rent is 0.62% of price.

The price this rent supports. Hold rent at $1,750 and solve for the price at which cash flow reaches zero with 25% down: about $182,514, roughly 64% of the statewide median. That is a price that genuinely exists in much of Arkansas.

The down payment this price needs. Keep the $284,111 price and the $1,750 rent and solve for the loan the NOI can service: about $130,014 — which means roughly $154,097 down, or 54% of the price, the lowest down-payment requirement in this series.

Every one of those three numbers is the friendliest in the series. Arkansas's problem is not that the arithmetic is brutal. It is that even the friendliest arithmetic in the South does not produce positive leveraged cash flow on a median-priced house at 2026 rates.

5. What actually varies by county here

Arkansas's two counties in this data are a study in a single question: does a more expensive market pay you back?

• Pulaski County (Little Rock): effective rate 0.74%, insurance $3,217, median price $244,950
• Benton County (Bentonville, Rogers, Northwest Arkansas): effective rate 0.54%, median price $425,700

A data gap you should know about: our Benton County file carries no county-level insurance average. The statewide $3,374 is used for Benton below, and that is an assumption rather than a county observation. Get a real quote for the specific address; Northwest Arkansas sits in an active hail corridor and the statewide average may well understate it.

Take the identical $284,111 house at $1,750 rent and apply each county's tax rate and premium:

On the same house the two counties are nearly identical — Pulaski's tax disadvantage of $568.22 is partly offset by an insurance advantage of $157, for a net NOI gap of $411.22 a year and 0.14 points of cap rate. By the standards of Louisiana or South Carolina, that is nothing.

The prices are not identical, and that is the real story. Run each county at its own median with a rent scaled to it:

• Pulaski County at $244,950 with an assumed $1,600 rent, 0.74% tax and $3,217 insurance: loan $183,712.50, P&I $1,222.24, cash in $68,586, tax $1,812.63, total opex $8,716.03, expense ratio 49.34%, NOI $8,947.97, cap rate 3.65%, cash flow -$476.58 a month, cash-on-cash -8.34%, DSCR 0.61.
• Benton County at $425,700 with an assumed $2,300 rent, 0.54% tax and the $3,374 state-proxy premium: loan $319,275, P&I $2,124.14, cash in $119,196, tax $2,298.78, total opex $10,971.98, expense ratio 43.21%, NOI $14,420.02, cap rate 3.39%, cash flow -$922.47 a month, cash-on-cash -9.29%, DSCR 0.57.

Benton County requires $50,610 more cash, produces $5,472.05 more net operating income — and delivers a lower cap rate (3.39% versus 3.65%), worse monthly cash flow (-$922.47 versus -$476.58), and a worse cash-on-cash return (-9.29% versus -8.34%).

That is the general shape of the thing and it is worth internalizing: a higher-priced market has to deliver rent growth in proportion to its price premium, and rent rarely scales as fast as price does. Benton's median is 74% above Pulaski's; the rent assumption used here is 44% above. That gap is the entire result. If you believe Benton rents actually run higher than the 44% premium assumed here, run it yourself with the real figure — the conclusion flips at a high enough rent, and this article's rent numbers are explicitly assumptions.

What the county averages do not tell you is hail territory, which carriers rate at a granularity finer than county. The deductible percentage a carrier will write varies with it. Get the quote for the specific address.

6. Financing a rental is not financing a home

These are the standard mechanisms across the mortgage market. Any specific rate or overlay is your lender's, not this article's.

Down payment. Conventional financing on a non-owner-occupied one-unit property generally requires more equity than an owner-occupied purchase — 20% is usually the floor and 25% the common expectation, which is why this article models 25%. FHA and VA are not available for a property you do not occupy. The genuine exception is house hacking: a two-to-four-unit property you live in one unit of qualifies for owner-occupied programs, and in Arkansas it would also preserve the Amendment 79 homestead credit on your unit.

Rate. Investment-property loans price above owner-occupied loans. Fannie Mae and Freddie Mac apply loan-level price adjustments for investment occupancy that scale with loan-to-value and credit score; lenders pass those through as rate or points. The 7.00% modeled above is an assumption. Get a real quote.

Reserves. Lenders typically require post-closing reserves — months of principal, interest, taxes, and insurance held in liquid assets — scaling with the number of financed properties you own. In Arkansas, size your own reserve against the wind/hail deductible rather than against the mortgage payment: at 2% on a $300,000 limit that is $6,000, and with no residual market behind you, a claim you cannot afford to file is a claim that turns into deferred maintenance and then into a declination.

Rental income counting. Lenders credit a portion of market or lease rent toward qualifying, not all of it. Ask what percentage yours uses and whether they need an appraiser's rent schedule.

DSCR loans. A debt service coverage ratio loan qualifies the property rather than the borrower, comparing property income to debt service and largely skipping personal income documentation. The trade is a higher rate, a larger down payment, frequent prepayment penalties, and a minimum DSCR — commonly stated at or above 1.0 and often above 1.2.

Look at Section 3. This property's DSCR is 0.61 — the second-highest in this series, and still nowhere near 1.0. Even with vacancy, management, and reserves stripped out it is 0.88. It does not qualify at 75% loan-to-value on either reading. Note what that means practically: the highest cap rate of the seven states here still does not produce a DSCR-loan-eligible property at 75% LTV on a median house.

Insurability is a financing condition, and with no FAIR plan behind you it is the binding one. A lender will not close on a property you cannot insure. Get a bindable landlord quote for the specific address, with the roof age disclosed, during your inspection period. Ask whether the carrier is admitted or surplus lines — the answer tells you whether there is a guaranty fund behind your claim, and Arkansas has nothing else.

7. What to check before you buy in this state

Insurance, first, and negotiate the deductible.

1. Get a bindable landlord policy quote for the specific address — not a homeowners quote, and not a statewide average that credible sources put anywhere from $3,374 to $4,955.
2. Read the wind and hail deductible percentage off the quote and multiply it into dollars against the dwelling limit. It is your minimum cash reserve.
3. Negotiate it. Percentage deductibles are carrier practice in Arkansas, not statute. Ask what it costs in premium to move from 2% to 1%, and weigh that against the $3,000 of risk you are buying back.
4. Ask in writing whether a cosmetic-damage exclusion is attached. It pays nothing for hail dents that do not affect function, regardless of your settlement basis or deductible, and it will not be obvious from the declarations page.
5. Ask whether the roof settles at replacement cost, actual cash value, or on a roof surface payment schedule — and get the schedule itself. Past 15 years a schedule can pay 40 to 60 cents on the dollar before the deductible comes off.
6. Confirm whether the carrier is admitted or surplus lines. Arkansas has no FAIR plan and no wind pool to fall back on.
7. Get the roof age and material in writing, and get an independent roof inspection.
8. Ask about the property's claim history — a CLUE report on prior hail claims at the address.
9. Confirm the policy carries loss of rents coverage and find out how many months it pays.
10. Price the FORTIFIED retrofit. Act 427 of 2025 requires carriers to offer 20% to 35% discounts, Strengthen Arkansas Homes pays up to $15,000 on an existing home, and the FHLB Dallas FORTIFIED Fund offers up to $15,000. On a $3,374 premium the discount alone is $675 to $1,181 a year, permanently.

Property tax, from the purchase price and the county rate.

1. Use the county rate. Pulaski is 0.74% against Benton's 0.54% — a $568 a year difference on the median house.
2. Recompute the tax with no Amendment 79 homestead credit. At the 2026 figure of $600 that credit is nearly 40% of the bill on a median house, so an owner-occupied seller's tax bill badly understates yours.
3. Note that non-homestead assessed value is capped at 10% a year after reappraisal rather than 5%. In a fast-appreciating county that cap is worth modelling.

The rent, from the market.

1. Pull three to five genuine comparable rentals for the specific neighborhood and note how long they sat.
2. Divide monthly rent by purchase price. Section 4's breakeven for this example was 0.88% — the lowest bar in this series. Arkansas's appreciation figure of +3.40% is also the second-highest here, so unlike Oklahoma there is a genuine second engine — but it is unrealized, backward-looking, and does not pay the mortgage.

The law, from the statute rather than from an article.

1. Do not take eviction timelines, notice periods, security-deposit handling, or late-fee rules from a blog — including this one. Arkansas residential tenancies are governed by the Arkansas Residential Landlord-Tenant Act of 2007, Ark. Code Ann. sections 18-17-101 and following, with unlawful detainer procedure at sections 18-60-301 and following. Read the code through the Arkansas General Assembly's own site, https://www.arkleg.state.ar.us/, or have an Arkansas attorney walk you through it. Arkansas's statutory scheme differs from its neighbors' in ways that matter, so do not carry assumptions across a state line.
2. Check the city and county separately: rental registration, inspection requirements, and short-term rental restrictions are local.

The money and the tax treatment.

1. Size your cash reserves against the wind/hail deductible in dollars, not against a month of mortgage payments.
2. Ask an Arkansas CPA how the property will be taxed, including depreciation, passive activity loss rules, Arkansas state income tax treatment of rental income, and treatment on sale.

What to do next

Every figure above came from a data file or was computed in front of you. Re-run all of it with your own numbers.

The Arkansas rental analysis calculator does exactly the work in Sections 3 and 4 — enter your price, your real local rent, and your own vacancy, management, and reserve assumptions, and it produces NOI, cap rate, cash flow, cash-on-cash, and DSCR. Given Section 4, watch the expense ratio: anything below 35% means something has been left out, and the calculator will say so.

Because credible Arkansas insurance averages disagree by more than a full point of mortgage rate, use the Arkansas insurance premium estimator to get closer to a real figure for a specific dwelling limit — and to convert the 1%, 2% and 5% wind/hail deductibles into actual dollars rather than leaving them as percentages.

The Arkansas mortgage payment calculator gives you the principal and interest figure for the rate you are actually quoted, which Section 3 shows is worth about $1,717 a year per point.

This article is general educational information about rental property arithmetic in Arkansas, based on figures current as of August 2026. It is not investment, tax, insurance, or legal advice. The rent figures in the worked examples are stated assumptions, not market data, and the Benton County insurance figure is a statewide proxy rather than a county observation. Insurance premiums, property tax assessments, and mortgage rates change and vary by property and by county. Consult an Arkansas CPA, a licensed Arkansas insurance agent, and an Arkansas attorney before buying.