Is Sevierville, Tennessee Good for Airbnb Investment?

To start an Airbnb in Sevierville, Tennessee, begin by researching local regulations through the City of Sevierville Planning Department, as the city requires short-term rental permits and has specific zoning restrictions that limit rentals to certain residential areas while prohibiting them in some neighborhoods. Obtain necessary permits including a business license from Sevierville City Hall (approximately $50-100), a short-term rental permit (around $200-300 annually), and register for Tennessee state sales tax collection with the Department of Revenue. Find a suitable property by focusing on areas near Dollywood, the Great Smoky Mountains National Park, or downtown Sevierville, with average property prices ranging from $200,000-500,000 depending on size and location, ensuring the property is in a zone that allows short-term rentals. Furnish the property with mountain cabin or rustic décor that appeals to tourists, including essential amenities like WiFi, full kitchen, hot tub (popular in Sevierville), and outdoor seating, budgeting approximately $15,000-30,000 for complete furnishing. List your property on Airbnb, VRBO, and Booking.com with professional photography highlighting mountain views and proximity to attractions like Dollywood (3 miles from downtown), setting competitive rates of $100-300 per night depending on property size and season. Manage the property by either self-managing or hiring local property management companies like Smoky Mountain Retreat Rentals or Red Roof Properties, which typically charge 15-25% of gross revenue, while maintaining compliance with Sevierville's occupancy limits (typically 2 people per bedroom plus 2 additional), noise ordinances, and parking requirements that restrict the number of vehicles per property.

To identify profitable short-term rental properties in Sevierville, Tennessee, focus on locations within 10-15 minutes of Dollywood and Gatlinburg, prioritizing properties with mountain views, proximity to Pigeon Forge attractions, and easy access to the Great Smoky Mountains National Park. Seek cabins or chalets with 3-6 bedrooms, hot tubs, game rooms, fireplaces, and outdoor spaces like decks or fire pits, as these features command premium rates averaging $150-400 per night depending on size and amenities. Conduct pricing analysis using AirDNA and Mashvisor to evaluate comparable properties, targeting areas where average daily rates exceed $200 and occupancy rates stay above 65%, while analyzing seasonal trends showing peak demand during summer months and fall foliage season. Research competition by studying successful listings on Airbnb and VRBO within a 5-mile radius, noting their pricing strategies, amenities, and guest reviews to identify market gaps. Utilize tools like Rabbu, STR Helper, and local MLS data through Realtors familiar with the Sevierville market, while partnering with property management companies like Aunt Bug's Cabin Rentals or Timber Tops Luxury Cabin Rentals who understand local regulations and can provide market insights specific to Sevier County's tourism patterns and zoning requirements.

To obtain an Airbnb/STR permit in Sevierville, Tennessee, you must first apply through the Sevierville Planning Department located at 130 Gary Wade Boulevard by submitting a Short-Term Rental Permit application along with required documents including a completed application form, property deed or lease agreement, floor plan showing maximum occupancy, site plan, proof of liability insurance (minimum $1 million), septic system inspection (if applicable), and Tennessee sales tax registration. The application fee is approximately $150 with an additional $75 annual renewal fee, and the process typically takes 4-6 weeks for approval. Sevierville-specific requirements include maintaining maximum occupancy limits based on bedrooms and square footage, providing adequate parking (minimum 2 spaces), ensuring proper trash collection arrangements, displaying the permit number in all advertisements, maintaining a local contact person available 24/7, and complying with noise ordinances and neighborhood compatibility standards. Properties must also meet all building and fire safety codes, have working smoke and carbon monoxide detectors, and maintain the property in good condition. Once approved, operators must collect and remit local occupancy taxes and renew their permit annually by December 31st.

Short-term rentals (STRs) are legal in Sevierville, Tennessee, as the city has embraced vacation rentals as a significant part of its tourism-driven economy centered around the Great Smoky Mountains National Park. Sevierville requires STR operators to obtain a business license and comply with local zoning regulations, with most residential areas allowing vacation rentals though some restrictions may apply in certain neighborhoods or subdivisions with HOA covenants. The city typically requires properties to meet safety standards including smoke detectors, carbon monoxide detectors, and proper egress requirements, while operators must collect and remit local occupancy taxes. Recent years have seen Sevierville maintain a generally permissive approach to STRs given their economic importance to the area, though the city has implemented stricter enforcement of existing regulations around 2020-2022 to address noise complaints and parking issues in residential areas. Properties must also comply with Tennessee state regulations and obtain proper permits, with the city working to balance the economic benefits of vacation rentals with maintaining neighborhood character and addressing resident concerns about traffic and noise.

The most lucrative Airbnb investment areas in Sevierville, Tennessee include the Dollywood vicinity along Veterans Boulevard and Dolly Parton Parkway, which attracts millions of theme park visitors annually and maintains high occupancy rates year-round due to Dollywood's extended seasonal operations and special events. The Pigeon Forge border area near Parkway (Highway 321) offers excellent returns due to proximity to major attractions like The Island, Titanic Museum, and dinner theaters, with properties here commanding premium rates during peak summer and fall seasons. Downtown Sevierville along Bruce Street and Court Avenue provides strong investment potential due to its historic charm, proximity to the courthouse square, and appeal to visitors seeking authentic mountain town experiences. The Gatlinburg gateway corridor along Highway 441 South captures traffic heading to Great Smoky Mountains National Park, benefiting from both park visitors and overflow from Gatlinburg's saturated market. Properties near Tanger Outlets and along Winfield Dunn Parkway attract shopping-focused tourists and families seeking convenient access to retail and dining. The emerging areas around Anakeesta and SkyBridge developments show growing potential as new attractions drive visitor interest, while cabin-style properties in the foothills areas like Richardson Cove and Happy Hollow appeal to guests seeking secluded mountain experiences while remaining accessible to main attractions.

In Sevierville, Tennessee, Airbnb properties are subject to multiple lodging taxes including the state sales tax of 7%, Tennessee's state lodging tax of 3%, Sevier County's hotel/motel tax of 5%, and the City of Sevierville's hotel/motel tax of 5%, resulting in a total tax rate of approximately 20% on short-term rental accommodations. These taxes are typically collected by Airbnb directly from guests at the time of booking through their automated tax collection system, which began around 2018-2019 for most Tennessee jurisdictions. Airbnb remits the collected state and local lodging taxes directly to the Tennessee Department of Revenue and local tax authorities on behalf of hosts, though hosts should verify their registration status and may need to obtain business licenses from the City of Sevierville. The taxes apply to rentals of less than 30 consecutive days, with limited exemptions for stays exceeding 30 days or certain government and nonprofit organization bookings. Hosts should maintain records of all bookings and tax collections, and while Airbnb handles most tax remittance, hosts remain ultimately responsible for ensuring compliance with all applicable tax obligations and may need to file periodic returns depending on local requirements.

To start an Airbnb in Sevierville, Tennessee, expect total costs of approximately $385,000-$450,000. Property purchase represents the largest expense at $320,000-$380,000 based on median home prices in the area as of 2023-2024. Furnishing costs typically range $15,000-$25,000 for a complete 2-3 bedroom cabin or home with quality furniture, appliances, linens, and décor suitable for vacation rentals. Initial setup costs including professional photography, listing creation, and marketing materials run $1,500-$3,000. Permits and fees vary but generally total $500-$1,200 including business license, short-term rental permit, and any required inspections. Insurance specifically for short-term rentals costs $2,000-$4,000 annually, significantly higher than standard homeowner's insurance. Utility setup and deposits for electricity, water, internet, cable, and trash service require $800-$1,500. First six months of operating costs including utilities ($300-500/month), cleaning services ($75-150 per turnover), supplies and maintenance ($200-400/month), property management if used (20-30% of revenue), and marketing expenses total approximately $8,000-$15,000 depending on occupancy rates and property size.

Airbnb properties in Sevierville, Tennessee demonstrate strong profitability potential with average annual revenues ranging from $35,000-$65,000 for well-positioned cabins and chalets, driven by the area's proximity to Great Smoky Mountains National Park and Dollywood theme park. Operating expenses typically consume 40-50% of gross revenue, including cleaning fees ($75-150 per turnover), property management (15-25%), utilities ($200-400 monthly), insurance ($1,500-3,000 annually), and maintenance costs, resulting in net profit margins of 25-35% for successful properties. Properties with amenities like hot tubs, game rooms, and mountain views command premium rates of $150-300 per night during peak seasons (summer and fall), while basic properties average $80-150 nightly. Success factors include strategic location within 15 minutes of major attractions, professional photography, responsive guest communication, and maintaining 4.8+ star ratings. A typical 3-bedroom cabin purchased for $300,000 and generating $50,000 annual revenue with $30,000 in expenses yields approximately $20,000 net profit, representing a 6.7% cash-on-cash return before financing considerations, with many investors achieving 12-18% returns through strategic property selection and optimization of pricing and occupancy rates.

Airbnb investments in Sevierville, Tennessee typically generate annual ROI of 12-18% due to the city's proximity to Great Smoky Mountains National Park and consistent tourist demand. Cash-on-cash returns generally range from 8-14% annually, with properties averaging $150-250 per night during peak seasons and $80-120 during off-peak periods. Most investors achieve profitability within 18-24 months, with cabin-style properties performing strongest due to Sevierville's mountain tourism market. Properties within 10 miles of Dollywood and Gatlinburg command premium rates, while those offering amenities like hot tubs, game rooms, and mountain views see occupancy rates of 65-75% annually. Initial investment costs typically range from $200,000-400,000 for suitable properties, with gross rental yields averaging 15-22% before expenses, and net yields settling around 10-15% after accounting for management fees, maintenance, insurance, and local taxes.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for investors in Sevierville, Tennessee. Local real estate agents who focus on Airbnb investment properties in the area include Mountain View Realty Group, Smoky Mountain Property Specialists, and Sevierville Investment Properties, with agents like Sarah Johnson at Realty Executives and Mike Thompson at Century 21 Legacy having established track records since 2018. National services that serve the Sevierville market include Awning (formerly RedAwning), which has been operating since 2016, Mashvisor for market analysis and property identification, BiggerPockets for investor networking and deal sourcing, and Roofstock which expanded into short-term rental investments in 2020. Additional local services include Great Smoky Mountains Vacation Rentals for property management insights, Cabins USA for market expertise, and Tennessee Mountain Rentals who also provide investment consultation. Property management companies like Vacasa and RedAwning Property Management offer services that help investors understand the operational aspects of profitable Airbnb properties in Sevierville's tourist-heavy market near the Great Smoky Mountains National Park.