Whether a cabin can legally rent by the night is the first question in any Smoky Mountain deal. The answer depends on which side of a city limit the cabin sits, and a mailing address will not tell you. Much of the land with a Sevierville or Gatlinburg address is in unincorporated Sevier County.
This is a summary for investors, not legal advice. Rules change, so confirm the current requirements with the city or county for the specific parcel.
Why your lender asks
A DSCR loan on a cabin is sized on short-term rental income. If the cabin cannot lawfully operate as a short-term rental, that income cannot be counted, and the loan falls back to long-term rent, which is usually far lower.
The four jurisdictions
| Where the cabin is | Who regulates it | What to expect |
|---|---|---|
| City of Gatlinburg | The city | An annual Tourist Residency Permit. Zoning decides where overnight rental is allowed |
| City of Pigeon Forge | The city | A city permit. Zoning limits where overnight rental is allowed, and large cabins meet stricter building standards |
| City of Sevierville | The city | An annual operational permit, with a life-safety inspection by the fire department |
| Outside the city limits | Sevier County | An annual short-term rental unit permit with a yearly fire inspection, required since January 1, 2024 |
Unincorporated Sevier County
The county program is run by the Fire Marshal’s Office. Each rental address needs its own permit and passes a life-safety inspection every year, covering smoke alarms, carbon monoxide detectors, escape routes and electrical safety. The base fee is $250 a year for a cabin that sleeps 12 or fewer. Cabins that sleep 13 or more pay $250 plus $25 for each occupant.
Large cabins
Occupancy is where plans go wrong. Cabins that sleep 13 or more face stricter fire code and often need sprinklers. If you are buying a large cabin, ask for its permit and inspection record. If you are building one, settle the occupancy with the fire marshal before the plans are final.
Covenants and associations
A permit from the city or county does not override private restrictions. Subdivision covenants and owners’ associations can limit or ban nightly rentals. Read them before you make an offer.
What happens when a cabin is sold
Tennessee’s short-term rental law protects some existing rentals from later local restrictions, but that protection generally ends when the property is sold or transferred. Do not assume the seller’s right to rent passes to you. Ask the city or county what a new owner needs.
A checklist before you offer
- Is the parcel inside a city limit or in the county?
- Does its zoning allow overnight rental?
- Do the covenants allow it?
- Is there a current permit, and when was the last fire inspection?
- How many people is the cabin approved to sleep?
- Does the septic permit match the bedroom count?
When those answers are in hand, send us the address and the numbers. See how we lend on rental cabins on the DSCR rental loans page.