If you're wondering about your next big investment, consider vacation rentals in Chattanooga. Vacation rentals provide a reliable source of income, can be used for personal vacations, and will appreciate in value throughout the years.
However, don't think that you can just start renting out a property without doing any paperwork or due diligence. Many cities regard short-term rentals as a business, so you'll need to go through the proper channels. Otherwise, you may find yourself facing a lawsuit or worse.
Here are some legal considerations for vacation rentals in Chattanooga.
How to Own a Vacation Rental
Whether you're a new owner of the property or you've had it for a while, there are some rules you have to follow before you can use it for vacation rentals.
One of the primary requirements is that you receive a short-term vacation rental (STVR) permit. This permit allows for rental periods of less than 30 days. You must provide detailed information regarding your property when you apply for one.
With the permit in hand, you can start renting out your property as long as you follow the laws in your area and the area is properly zoned.
Laws on Vacation Rentals
It's important to understand vacation rental laws in Tennessee to avoid legal trouble later on in your operations.
For example, short-term rentals must comply with health and safety regulations. That means they must have items such as fire extinguishers, carbon monoxide detectors, and other safety equipment. The property also needs to adhere to building codes.
As a property owner, you'll need to perform regular maintenance to make sure everything complies with those rules.
Zoning Regulations
Since short-term rentals operate as a business, zoning laws may limit where they can exist. Even though they're also residences, certain residential zones may prohibit short-term rentals. Meanwhile, commercial zones might allow them with fewer restrictions.
Always confirm that the property location permits this type of rental before you invest in one.
Business Licenses
In Tennessee, vacation rental owners will also need to get a business license in addition to the STVR permit. This license involves registering with the Tennessee Department of Revenue and paying a fee. The only stipulation is that your annual taxable gross earnings must meet or surpass a certain amount.
That amount will depend on local regulations and your specific circumstances. Even if you only rent out your property for a couple of months a year, you may still require a business license.
Know the Legal Considerations for Vacation Rentals
The legal considerations for vacation rentals are arguably much more important than the potential profit you can make. You don't want to invest a lot of your time and money into a property only for the city to shut it down or deliver a lawsuit.
PMI Scenic City can help manage your property and figure out how you can use it. Our office is part of a nearly 20-year-old franchise that specializes in all aspects of property management. Schedule a consultation today to learn more about how we can help.
