Written by: Sanjin Hadziomerovic
Tennessee is one of the most popular states for short-term rental (STR) investing, offering a mix of high-traffic tourist towns and growing urban centers. Whether you’re looking to cash flow a mountain cabin in Gatlinburg, invest near the attractions in Pigeon Forge, or list a property in bustling Nashville or Memphis, short-term rentals can be a profitable venture — if you stay compliant with local regulations.
The challenge? Tennessee doesn’t have a one-size-fits-all policy. Instead, each city sets its own licensing, zoning, and enforcement rules, which can change year to year. Investors need to navigate different permit requirements, inspection procedures, and tax obligations based on location.
In this guide, we break down short-term rental laws in Pigeon Forge, Gatlinburg, Sevierville, Memphis, and Nashville, using trusted, up-to-date data from GetChalet.com. Whether you’re buying or operating an Airbnb in Tennessee, this post gives you a city-by-city breakdown to avoid fines and run a successful STR business.
Pigeon Forge: Investor-Friendly and Booming
Pigeon Forge is one of Tennessee’s most welcoming markets for short-term rental investors. The city — home to Dollywood and millions of annual visitors — embraces STRs as a key part of its tourism economy.
There are no city-level restrictions banning STRs in most tourist zones, and the permitting process is relatively straightforward. That said, operators must ensure compliance with county and state tax collection requirements and maintain properties to health and safety standards.
Pigeon Forge is zoned to encourage tourism-related business, and the local government has not shown signs of tightening STR laws. Still, property owners are expected to maintain good relationships with neighbors and follow quiet hours and trash rules to avoid complaints.
Airbnb Rental Regulations Pigeon Forge
Gatlinburg: A Haven for Vacation Rentals
Just a short drive from Pigeon Forge, Gatlinburg is equally favorable to STR investors. With its proximity to Great Smoky Mountains National Park, the city attracts millions of nature lovers and families looking for cabin stays and mountain retreats.
Short-term rentals are common across the city and are generally allowed in most zones. The permitting process is investor-friendly, and most operators can get up and running without excessive red tape — but that doesn’t mean it’s unregulated.
Like in Pigeon Forge, hosts in Gatlinburg must comply with local lodging tax collection, follow occupancy limits, and ensure fire safety standards are met. While the current environment is STR-friendly, operators should still monitor for any zoning updates or changes in tax enforcement.
Airbnb Rental Regulations Gatlinburg
Sevierville: New Annual Permits & Inspections (2024 Update)
Sevierville — another gateway to the Smokies — introduced new short-term rental rules that took effect on January 1, 2024. Under the updated ordinance, all STR operators are required to obtain an annual permit issued by Sevier County.
The permit process includes:
- A detailed application
- Proof of ownership
- Annual property inspections to ensure compliance with building and safety codes
These inspections focus on fire alarms, emergency exits, proper signage, and guest safety. Permits must be renewed annually, and non-compliance can result in fines or permit revocation.
Although Sevierville still welcomes short-term rentals, the county is taking a more proactive approach to enforcement in 2024 and beyond. Investors should budget time and money for inspections and ensure properties are well-maintained year-round.
Airbnb Rental Regulations Sevierville
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Memphis: City Permits and Renewals Required
In Memphis, short-term rental operators must secure a permit through the city’s official STR program. The fees are:
- $100 initial permit fee
- $50 annual renewal fee
Each permit is valid for 365 days. Memphis uses this process to ensure STRs are operating safely, legally, and responsibly. While not overly strict, the city expects hosts to adhere to zoning rules, maintain safe accommodations, and avoid public nuisances.
Additionally, hosts must collect and remit local occupancy taxes. Memphis STRs are typically permitted in zones that allow residential or mixed-use dwellings, but operators should confirm zoning before applying for a permit.
Compared to rural Tennessee markets, Memphis enforces permits more actively — so hosts should maintain compliance to avoid violations or disruptions to their listings.
Airbnb Rental Regulations Memphis
Nashville: License Caps and Zoning Are Enforced
Nashville has one of the most complex — and controversial — short-term rental licensing systems in the state. The city requires all STR operators to obtain a Vacation Rental Permit, which is valid for 365 days and must be renewed annually.
Nashville distinguishes between:
- Owner-occupied (Type 1) STRs: Permitted in more residential zones
- Non-owner-occupied (Type 2) STRs: Only allowed in certain commercial and mixed-use zones
Over the past several years, the city has placed caps on the number of Type 2 permits, making it extremely competitive to operate non-owner-occupied STRs in residential neighborhoods. In many parts of the city, these are no longer allowed.
To comply in Nashville, hosts must:
- Operate within the correct zoning district
- Follow occupancy limits (typically two adults per bedroom)
- Display permit numbers in listings
- Collect and remit both state and local occupancy taxes
Violations can result in steep fines and permit revocation. Nashville’s Airbnb laws are some of the strictest in the Southeast, so detailed research and zoning verification are a must before buying or listing a property here.
Airbnb Rental Regulations Nashville
Conclusion: STR Success in Tennessee Starts With Local Knowledge
Tennessee offers an exciting landscape for short-term rental investors, from the tourist-heavy Smoky Mountains to urban centers like Memphis and Nashville. But that opportunity comes with responsibility — especially as more cities tighten regulations and increase enforcement.
To stay compliant and profitable:
- Research each city’s permitting and zoning laws
- Apply for the correct licenses and renew them annually
- Maintain safety and code compliance
- Collect and remit all applicable taxes
Cities like Gatlinburg and Pigeon Forge remain STR-friendly, while places like Nashville and Sevierville are becoming more regulated. For the most up-to-date guidance, visit the GetChalet STR Regulation Center, where each market is broken down with local laws, permit links, and investor takeaways.
