What to Know Before Buying a Short Term Rental Property in a Busy Tourist Town

Posted by Jason White on

 

The Smoky Mountains have a way of capturing people’s hearts. Maybe it’s the rolling ridgelines, the four distinct seasons, or the fact that this is home to the most visited national park in America. 

Whatever calls you here, it’s easy to understand why so many buyers dream of owning property in Sevierville, Pigeon Forge, or Gatlinburg.

But buying in a busy tourist town is different than purchasing in a traditional neighborhood. The opportunities are big, but so are the details you’ll want to understand before you sign.

Here’s what you need to know before signing on the dotted line.

 

Market Dynamics Are Unique in the Smokies

Home values here follow tourism patterns. When visitor numbers rise, rental demand and property prices tend to follow. 

In slower years, the reverse can happen.

Even if you’re not renting your cabin the local market will still ebb and flow with the tourism season. 

Summer, fall foliage, and the holidays bring peak traffic, while January often feels like a different world.

If you’re buying in the Smokies, expect seasonal swings and plan your long-term strategy with that in mind.

 

Zoning and STR Regulations Matter

It’s not enough to find the perfect home, you also need to make sure it’s legally allowed to operate the way you intend. 

Here’s a closer look at the three main markets:

  • If you plan to own a rental in Sevierville you’ll need to verify that your address is located within the City limits and that it’s in an area that allows Short Term Rentals. Keep in mind, if your home is located in the Medium Density Residential (MDR) zoning district, the City will send a notification to all properties within 100’ of the proposed short-term rental.

 

  • Most areas in Sevier County do allow Short Term Rentals, but you’ll need to apply for a Short-Term Operational Permit (STOP). These permits are tied to the property, not the owner, and they require annual fire and safety inspections. 

 

  • The City of Pigeon Forge has tighter restrictions, especially in R-1 residential zones. Unless a property was already being used as a short-term rental before August 13, 2018 and obtained a valid permit at that time, it cannot be used as an STR in those zones today. It’s essential to check zoning before you make an offer.

 

  • Gatlinburg is known for being one of the most tourist-friendly cities in the Smokies, but that doesn’t mean every property qualifies as a rental. If you see R1A or R2A zoning, tourist rentals are not permitted at all, no exceptions. For properties in approved zones, you’ll need a Tourist Residency Permit, along with annual fire and life-safety inspections.

Always verify zoning, permits, and STR status before you write an offer. The right information upfront can save you from costly mistakes later.

 

Accessibility Is Just as Important as Distance

In the Smokies, “five miles from the Parkway” doesn’t always mean five easy minutes. Steep grades, winding switchbacks, and seasonal traffic can turn a short drive into a long haul – not a huge deal, just something to be aware of. 

When touring properties, ask yourself:

  • Traffic: Will guests be stuck in Parkway gridlock during peak season?
  • Road conditions: Is the driveway steep, narrow, or gravel-only?
  • Weather: Could ice, snow, or rain make access difficult?
  • Parking: Is there room for the amount of cars that the home will sleep?

Accessibility not only affects your rental’s appeal and your own peace of mind as an owner.

Clear directions, paved access when possible, and sufficient parking can make the difference between glowing reviews and frustrated feedback.

When touring properties, don’t just look at the cabin, pay attention to the road that gets you there. A stunning view loses some of its value if guests arrive frazzled, or worse, can’t reach the property at all during leaf season or a snowy weekend.

 

The True Cost of Ownership

The purchase price is only part of the story. Owning in a top tourist destination means budgeting for:

  • Higher property taxes in city limits.
  • Occupancy (“hotel/motel”) taxes on STR income.
  • Insurance premiums that factor in wildfire, flood, and rental use.
  • Maintenance from guest turnover and mountain weather.

Don’t stop at the mortgage payment when running numbers, factor in other costs so that you don’t get surprised! 

 

The Lifestyle Comes With Trade-Offs

One of the biggest draws of Sevierville, Pigeon Forge, and Gatlinburg is the energy. 

These are towns that always have something happening. From car shows on the Parkway, to parades that draw thousands, to live music and seasonal festivals, the Smokies thrive on activity. For many buyers, that vibrancy is exactly what makes owning here so appealing.

But with that energy comes the reality of living, or owning property, in a top-tier tourist destination:

  • During peak fall weekends or the weeks leading up to Christmas, the Parkway can be bumper-to-bumper traffic. Which means a quick grocery run might take twice as long as expected. If you’re renting your property, that also means preparing guests for traffic delays and longer drive times.
  • Staying close to attractions can mean hearing Dollywood’s fireworks in the summer or late-night activity near the Parkway. For some, that’s part of the fun, for others, it’s a dealbreaker.
  • The area has an interesting rhythm. Spring and summer bring family vacations, fall brings leaf-watchers, and winter brings holiday lights and ski season. Your experience of “life in the Smokies” will shift with the calendar, sometimes dramatically.

 

 The key is to decide what kind of Smoky Mountain Property you want:

In the action: Some buyers want to be steps from the Parkway in Gatlinburg or within a five-minute drive of Dollywood. They love the convenience and don’t mind the bustle, it feels alive and exciting.

A peaceful retreat: Others picture a cabin tucked away on a ridge in Wears Valley or up in Chalet Village, where the loudest sounds are the wind in the trees and the occasional black bear passing through.

 

There’s no “right” choice! Just personal preference. Do you want to be in the action or do you prefer a peaceful retreat?

 

The Investment Potential Is Real But Requires Realism

It’s no secret, Pigeon Forge and Gatlinburg are two of the strongest short-term rental (STR) markets in the country. The steady stream of 14+ million annual visitors to the Smokies means demand is consistently high, and cabins here often outperform comparable properties in other vacation markets. 

But strong doesn’t mean foolproof and that’s where new investors might stumble..

Here’s what to keep in mind:

  • Income is seasonal, October’s numbers won’t match February’s so it’s important to look at annual numbers when making decisions. 
  • Location, views, and amenities are what drive bookings.
  • Expenses like cleaning, utilities, and management eat into gross revenue, so plan accordingly. 
  • Local rental data always beats national calculators when running projections.

The opportunity here  is real, but the winners are the buyers who look at all the details! 

 

Work With a Local Who Knows the Terrain

In the Smoky Mountains, the difference between a smart purchase and a costly mistake often comes down to local knowledge. From knowing which neighborhoods get the most repeat bookings to understanding where a “great view” also means a steep driveway, local expertise is priceless.

That’s where local expertise matters. Our team has been guiding buyers in Sevierville, Pigeon Forge, and Gatlinburg since 1996. We’ve not only sold cabins — we’ve owned them, built them, and rented them ourselves. 

We know which details make the difference between a smart investment and an expensive lesson.

Owning property in the Smokies is about more than finding the right cabin, it’s about understanding the rules, the rhythms, and the realities of a market built around 14+ million annual visitors.

From zoning laws to mountain roads, from ownership costs to rental potential—knowing what you’re walking into is what makes ownership here rewarding instead of stressful.

The good news? You don’t have to figure it out alone. 

If the Smokies are calling your name, we’d be honored to help you navigate the process with the knowledge and care we’ve built over nearly three decades in these mountains.