How to List Your Vacation Rentals on Booking.com as a Property Manager

IMPORTANT DISCLAIMER: This content is for informational purposes and current as of March 30, 2026. Short-term rental regulations in Arizona change frequently and vary by municipality. Before operating an STR in Arizona, verify current local requirements with your city/county planning department or a real estate attorney. RedAwning monitors regulatory changes across Arizona and updates this guide quarterly.

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Arizona Short-Term Rental Laws: The Most Investor-Friendly State

Arizona stands out as the nation's most investor-friendly short-term rental state. Unlike Washington, Colorado, and most states, Arizona has explicit state-level preemption that prohibits local governments from restricting short-term rentals. This means operators have significantly more flexibility in Arizona than in most other markets.

Key stat: Arizona's state preemption law (A.R.S. Section 34-226) explicitly prevents cities and counties from banning STRs or imposing unreasonable restrictions. This single factor has made Arizona a hotbed for vacation rental investment.

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Arizona State Law: The Investor Protection Clause

Arizona Revised Statutes Section 34-226 (passed in 2016):

• What it says: Local governments cannot ban STRs or restrict the use of residential properties as short-term rentals beyond what is reasonable
• What it means: Cities cannot outright prohibit STRs, cannot mandate owner-occupancy, and cannot severely cap the number of STR licenses
• Exception: Cities can still enforce reasonable regulations regarding noise, safety, occupancy limits, and parking

This preemption clause is a game-changer for investors. Property managers operating non-owner-occupied STRs in Arizona face far fewer regulatory barriers than in Colorado or Washington.

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Phoenix Short-Term Rental Regulations

Phoenix allows STRs in most residential zones with a straightforward registration process:

Phoenix STR License Requirements

• License required: Yes, but simple registration (not restrictive licensing)
• Owner-occupancy: Not required
• Allowed zones: Most residential zones (R-43, R-18, R-8, R-7, R-6, R-5); some commercial zones
• License cost: $0 (free registration with annual renewal)
• Insurance requirement: Minimum $300,000 liability coverage
• Max occupants: Limited by zoning (typically 2x lot coverage + 1)
• Parking requirement: Must provide adequate off-street parking

What makes Phoenix investor-friendly:

• No license fee (just annual registration)
• No owner-occupancy mandate
• Allowed in most residential neighborhoods
• No annual cap on STR licenses
• Simple registration process through Phoenix Planning Department

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Scottsdale Short-Term Rental Regulations

Scottsdale has similar investor-friendly rules to Phoenix but with slightly more detailed compliance:

• License required: Yes, through Scottsdale Planning Services
• Owner-occupancy: Not required
• Allowed zones: Residential and resort zones
• License cost: $250/year
• Insurance: $300K minimum liability
• Occupancy limit: Based on bedroom count (typically 2 per bedroom + 1 for common area)

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Tempe Short-Term Rental Regulations

Tempe's rules are similarly permissive:

• License required: Yes, through Tempe Planning & Zoning
• Owner-occupancy: Not required
• Allowed zones: Most residential and mixed-use zones
• License cost: $150/year
• Registration process: Online through city portal

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Tucson Short-Term Rental Regulations

Tucson follows Arizona's statewide preemption, allowing STRs with minimal restrictions:

• License required: Yes, through Tucson Development Services
• Owner-occupancy: Not required
• License cost: $100/year
• Allowed zones: Residential zones (most permitted)

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Flagstaff: The Exception (Mountain Town Restrictions)

Flagstaff is Arizona's one significant regulatory exception, with stricter rules due to housing affordability concerns:

• License required: Yes
• Owner-occupancy: Required (property owner must live in unit 183+ days/year)
• License cost: $500/year
• Annual rental days: Limited (varies by neighborhood)
• Non-owner-occupied: Severely restricted; effectively limited to commercial zones

Flagstaff's restrictions are an anomaly in Arizona and reflect local housing concerns similar to Colorado mountain towns. However, even Flagstaff cannot completely ban STRs due to state preemption law.

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Arizona Short-Term Rental Taxes

State-level taxes

• Arizona has no dedicated STR tax at the state level
• STRs are subject to normal sales tax (5.6% statewide) + county surcharges

City-level hotel/occupancy taxes (on top of sales tax)

• Phoenix: 4.95% Hotel Room Tax (total: ~10.55%)
• Scottsdale: 2.5% Occupancy Tax (total: ~8.1%)
• Tempe: 4% Hotel Occupancy Tax (total: ~9.6%)
• Tucson: 4% Hotel Occupancy Tax (total: ~9.6%)
• Flagstaff: 4% Hotel Occupancy Tax (total: ~9.6%)

Example: $1,000 booking in Phoenix

• Sales tax (5.6%): $56
• Hotel room tax (4.95%): $49.50
• Total taxes: $105.50
• Host take-home: $894.50

Note: These rates are significantly lower than Colorado or Washington, making Arizona attractive for STR investment.

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Arizona STR Insurance & Liability Requirements

All Arizona cities require short-term rental liability insurance:

• Minimum coverage: $300,000 per occurrence
• Coverage must include: Guest injuries, property damage, and loss of use
• Policy must name: Property owner and any mortgage holder
• Average cost: $800-1,500/year for standard STR policy

Arizona does NOT require renters insurance or additional host coverage like some other states.

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How to License an STR in Arizona

Phoenix process (example):

1. Verify property zoning allows STRs (most residential zones do; use Phoenix Zoning Map)
2. Secure STR liability insurance ($300K minimum)
3. Register through Phoenix Online Services (Planning Department)
4. Provide property address, owner contact info, and insurance documentation
5. Pay registration fee ($0; renewal every 12 months)
6. Receive STR registration certificate; display on listing
7. Renew annually

Timeline: Typically 3-7 business days for approval

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Enforcement & Penalties in Arizona

• Operating without registration: $500-1,000 fine
• False information on registration: $1,000-2,500 fine
• Violating occupancy limits: $500-1,500 fine
• Noise/nuisance violations: $1,000-2,500 fine + potential license revocation
• No insurance: $2,000-5,000 fine + mandatory closure

Enforcement is generally lower in Arizona than in Colorado or Washington, reflecting the state's pro-investor stance.

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Why Arizona Is Different: State Preemption Impact

Arizona's state preemption law has shaped its STR landscape dramatically:

• No owner-occupancy mandates: Corporate investors and property managers operate non-owner-occupied STRs without restriction (except Flagstaff)
• No artificial caps: Cities cannot limit the total number of STR licenses
• Zoning flexibility: Most residential properties can legally operate as STRs
• Lower compliance burden: Registration is simpler than licensing in other states
• Investor-friendly environment: Venture capital and institutional investors have entered Arizona's STR market precisely because of preemption

Compare this to Colorado (no preemption, fractured regulations) or Washington (no preemption, strict city-by-city rules), and Arizona's advantage becomes clear.

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Key Takeaways for Arizona STR Operators

• Arizona is the most investor-friendly state: State preemption prevents cities from banning or severely restricting STRs
• No owner-occupancy requirement: Except in Flagstaff, property owners do not need to live in their STR properties
• Registration is free: Most Arizona cities charge $0-250/year (much lower than Colorado or Washington)
• Tax rates are reasonable: Combined sales + occupancy taxes range from 8-10.55% (lower than most states)
• Licensing is straightforward: No restrictive licensing boards; simple online registration
• Enforcement is lighter: Fewer nuisance complaints and compliance audits than coastal states
• Zoning is flexible: Most residential properties can legally operate STRs
• Flagstaff is the exception: Mountain town with stricter rules; mirrors Colorado restrictions

RedAwning manages short-term rental properties across Arizona's major metros (Phoenix, Scottsdale, Tempe, Tucson) and helps institutional investors leverage Arizona's preemption advantage for portfolio expansion. Arizona's investor-friendly regulatory environment, low tax burden, and straightforward registration process make it ideal for property managers seeking geographic diversification away from high-burden states like Colorado and Washington.