Invest in Tennessee Short Term Rentals
From the iconic Smoky Mountains to the vibrant streets of Nashville, Tennessee offers some of the nation's most profitable short term rental markets. Discover why savvy investors are choosing the Volunteer State for vacation rental investments.
Tennessee STR Market Opportunity
Why Tennessee is a premier destination for short term rental investment
Tennessee ranks among the top states for STR investment thanks to its diverse tourism appeal, business-friendly tax environment, and multiple high-performing markets. The state attracts over 126 million visitors annually, generating $23 billion in tourism spending. Whether you're interested in a cozy mountain cabin in Gatlinburg, a party-ready Nashville bachelorette house, or a scenic retreat near Chattanooga, Tennessee offers compelling opportunities for every investor profile.
Top Tennessee STR Markets
Explore the best Airbnb and vacation rental markets across the state
Gatlinburg
Mountain CabinsGateway to Great Smoky Mountains National Park, Gatlinburg is the premier destination for Smoky Mountains cabin investment with year-round tourism and premium nightly rates.
Pigeon Forge
Family EntertainmentHome to Dollywood and endless family attractions, Pigeon Forge offers excellent cabin investment opportunities with strong family tourism demand throughout the year.
Sevierville
Value & GrowthAffordable entry point to Smoky Mountains investing with lower property prices than Gatlinburg while still capturing strong vacation rental demand.
Nashville
Urban EntertainmentMusic City offers premium rates for bachelorette parties, concerts, and events. Nashville's urban STR market commands high nightly rates with year-round demand.
Chattanooga
Outdoor AdventureScenic city offers outdoor adventures, aquarium tourism, and a revitalized downtown. Growing STR market with lower competition than Nashville.
Tennessee STR Regulations Overview
What you need to know about operating short term rentals in Tennessee
State-Level Friendliness
Tennessee has no statewide ban on short term rentals. The state generally supports property owner rights, though regulation is left to local municipalities and counties.
Nashville Permits
Nashville requires STR permits and has restricted non-owner-occupied rentals in certain zones. Owner-occupied permits are easier to obtain. Work with a local agent to navigate requirements.
Smoky Mountains (Sevier County)
Sevier County (Gatlinburg, Pigeon Forge, Sevierville) has historically STR-friendly regulations with straightforward permit processes and strong support for vacation rentals.
Tax Requirements
Collect state sales tax (7%), local sales tax (varies), and applicable hotel/motel taxes. Tennessee has no state income tax, benefiting rental income retention.
Regulations change frequently. Our matched agents stay current on local requirements and can guide you through the permitting process.
Why Invest in Tennessee STRs
Key advantages of short term rental investment in the Volunteer State
Massive Tourism Base
Great Smoky Mountains National Park attracts 12M+ visitors annually, making it the most visited national park in the US. Nashville adds 15M+ visitors for entertainment tourism.
No State Income Tax
Tennessee has no state income tax on rental income, allowing investors to keep more of their earnings compared to high-tax states.
Strong Appreciation
Tennessee real estate has shown consistent appreciation, with the Smoky Mountains and Nashville metro areas seeing particularly strong growth.
Year-Round Demand
Fall foliage, winter skiing, spring blooms, and summer adventures create four-season demand in the mountains. Nashville's events run year-round.
Established STR Market
Tennessee has a mature vacation rental ecosystem with established property managers, cleaning services, and investor-friendly vendors.
Diverse Investment Options
From luxury mountain cabins to urban condos, Tennessee offers diverse property types at various price points to match any investment strategy.
Frequently Asked Questions
Common questions about Tennessee short term rental investment
What are the best markets for short term rental investment in Tennessee?
The top Tennessee STR markets include Gatlinburg, Pigeon Forge, and Sevierville in the Smoky Mountains for cabin investments, Nashville for urban vacation rentals and bachelorette party properties, and Chattanooga for a mix of outdoor tourism and urban appeal. Each market offers unique advantages based on your investment goals and property type preferences.
Are short term rentals legal in Tennessee?
Yes, short term rentals are legal in Tennessee, though regulations vary by city and county. Tennessee is generally considered STR-friendly with no state-level ban. However, cities like Nashville have specific permit requirements, while Sevier County (Gatlinburg, Pigeon Forge, Sevierville) has more relaxed regulations. Always verify local ordinances before purchasing.
How much can I earn from a Smoky Mountains cabin rental?
Smoky Mountains cabin rentals in areas like Gatlinburg and Pigeon Forge can generate $50,000 to $150,000+ in annual gross revenue depending on location, size, amenities, and views. Properties with hot tubs, game rooms, and mountain views command premium rates of $200-500+ per night with occupancy rates averaging 60-70%.
What taxes apply to Tennessee short term rentals?
Tennessee STR operators must collect and remit state sales tax (7%), local option sales tax (varies by county, typically 2.25-2.75%), and local hotel/motel tax or tourism tax (varies by municipality). Tennessee has no state income tax on rental income, making it tax-advantaged compared to many other states.
Should I invest in Nashville or the Smoky Mountains for STR?
Both markets offer excellent opportunities with different profiles. Nashville offers higher nightly rates ($275+ avg), year-round events, and appreciation potential but requires permits and faces stricter regulations. The Smoky Mountains (Gatlinburg, Pigeon Forge) offer more STR-friendly regulations, consistent tourism from 12M+ annual visitors, and cabin-style properties. Your choice depends on budget, risk tolerance, and management preferences.
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