Navigating the Short-Term Rental Market in East Tennessee: Laws, Tips, and Success Strategies

East Tennessee’s breathtaking landscapes, vibrant cities, and tourism hotspots make it a prime location for short-term rentals. With destinations like Gatlinburg, Sevierville, Knoxville, and the surrounding areas attracting millions of visitors annually, the short-term rental market is thriving. However, to succeed in this competitive market, property owners must navigate local regulations, optimize their listings, and deliver top-notch guest experiences.

Understanding Short-Term Rental Regulations by Area

Gatlinburg and Sevierville

• Gatlinburg: Operating a short-term rental requires a Tourist Residency (TR) permit, which must be renewed annually. Additionally, zoning laws restrict rentals in certain residential zones. Always verify your property’s compliance with the city’s regulations before listing it.
• Sevierville: You’ll need a Short-Term Rental Unit (STRU) permit. The application process includes safety inspections and a review by the Planning Commission. New regulations as of January 2024 will require annual renewals and property inspections.
• Sevier County (Unincorporated Areas): Recent updates mandate permits for all short-term rentals outside city limits, coupled with annual safety inspections.

Knoxville

• Short-term rentals in Knoxville, particularly within city limits, are regulated under the Short-Term Rental Ordinance.
  • Owner-Occupied Properties: Homeowners can operate a rental if it’s their primary residence and they obtain a Short-Term Rental Permit.
  • Non-Owner-Occupied Properties: Non-primary residences used for rentals must comply with zoning laws and require a Conditional Use Permit in most cases.
  • All properties must adhere to safety standards, and operators must pay occupancy taxes.

Other Areas

• Maryville and Alcoa: Regulations are typically less restrictive in smaller towns, but zoning and permitting requirements still apply.
• Chattanooga (for comparison): If you're considering expanding into neighboring markets, Chattanooga has its own distinct rules, including a short-term vacation rental (STVR) permit requirement.

Tips for Success in the Short-Term Rental Market

1. Research Your Market

Understanding the local market is key. In Knoxville, properties near the University of Tennessee or the downtown area are highly sought after. In Gatlinburg and Sevierville, proximity to attractions like Great Smoky Mountains National Park or Dollywood can boost bookings.

2. Optimize Your Listing

• Photography: Professional photos can dramatically increase clicks on your listing.
• Descriptions: Highlight unique features like hot tubs, mountain views, or proximity to local attractions.
• Local Recommendations: Provide guides to nearby restaurants, parks, and attractions, tailored to your location.

3. Price Strategically

• Use dynamic pricing tools like Beyond Pricing or AirDNA to adjust rates based on demand, seasonality, and local events.
• Offer discounts for longer stays to attract travelers seeking extended accommodations.

4. Enhance Guest Satisfaction

• Clear Communication: Provide detailed instructions for check-in and check-out.
• Personal Touches: Stock your rental with welcome baskets featuring local products or include recommendations for local experiences.
• Cleanliness and Comfort: Ensure the property is spotless and stocked with essentials like toiletries, towels, and kitchenware.

5. Legal Compliance and Taxes

• Ensure you’re registered with the appropriate local authorities and keep permits up to date.
• Pay applicable taxes, such as lodging and sales taxes. Non-compliance can lead to fines and penalties.

Special Considerations for Knoxville Rentals

Knoxville’s short-term rental market is growing rapidly, thanks to its blend of urban amenities and outdoor activities.

• Popular Neighborhoods: Rentals in Old City, Market Square, and the UT area are hot commodities. These neighborhoods offer proximity to Knoxville’s cultural and entertainment hubs.
• Events: Major events like football games at Neyland Stadium or festivals like the Dogwood Arts Festival bring significant booking opportunities.

Maximizing Bookings and Guest Experiences

1. Create a Niche: If your rental is near the Smokies, market it as a “mountain escape.” For downtown Knoxville properties, emphasize cultural or nightlife access.
2. Provide Extras: Outdoor rentals can include hiking guides, while urban rentals might offer bicycles or coffee gift cards.
3. Engage with Reviews: Respond to every review, thanking guests for positive feedback and addressing concerns.

Conclusion

Navigating the short-term rental market in East Tennessee can be incredibly rewarding, especially with the region’s diverse attractions and steady stream of visitors. Whether you’re operating in Knoxville, Gatlinburg, or Sevierville, staying informed about local regulations and focusing on guest satisfaction are the keys to long-term success.

By keeping your listings compliant, competitive, and appealing, you can thrive in this dynamic market while offering memorable stays for your guests.

For specific regulations, refer to the official websites:
City of Gatlinburg
City of Sevierville
City of Knoxville

 - Krista Freshour

(865) 776-9608