Cleveland, Tennessee Short Term Rental Regulations Guide for Airbnb hosts

Overview: Are Short-Term Rentals Allowed in Cleveland, TN?

Yes, short-term rentals are explicitly allowed in Cleveland, Tennessee. The city has enacted a regulatory framework that permits short-term rental operations while imposing requirements to ensure responsible hosting. Cleveland defines short-term rentals as residential properties partially rented for less than 30 continuous days, including units listed on vacation platforms like Airbnb and Vrbo.

The city has taken a measured approach to STR regulation, focusing on operational standards rather than geographic restrictions. According to Cleveland's Planning Director Robert Varnell, the ordinance "does not regulate where the short-term rentals operate but how they operate." This means investors can operate STRs in most residential zones, provided they meet the city's operational requirements, safety standards, and tax obligations.

The Cleveland City Council passed this regulatory framework on October 23, 2023, with the city planning to contact approximately 80-90 existing STR operators within city limits to ensure compliance.

What do Airbnb hosts actually earn in Cleveland?

Cleveland hosts earn a median $22,592/year with $139 ADR and 53% occupancy.

Top performers pull in $33,601+ per year.

See the full Cleveland market breakdown

How to Start a Short-Term Rental Business in Cleveland, TN

Launching a compliant short-term rental business in Cleveland requires following both state and local requirements. Here's the step-by-step process:

Step 1: Business License Acquisition

Before applying for any STR-specific permits, you'll need to obtain:

Bradley County business license
City of Cleveland business license

These foundational licenses are mandatory prerequisites for all commercial operations in Tennessee.

Step 2: Property Eligibility Assessment

Verify your property's compliance with:

Zoning requirements (most residential zones allow STRs)
Building code standards
Safety requirements (smoke detectors, carbon monoxide alarms, fire extinguishers)

Step 3: Insurance Coverage

Secure liability insurance with minimum coverage of $500,000 unless your listing platform provides equivalent coverage. This is both a state requirement and essential protection for your investment.

Step 4: City STR Permit Application

Submit a formal application to the City of Cleveland for an operating permit. The city will conduct a life-safety inspection as part of this process.

Step 5: Tax Registration

Cleveland hotel/motel tax (4%)
Bradley County lodging tax (7%)
State and local sales tax

Step 6: Operational Setup

Establish systems for:

Guest screening and management
Noise and nuisance prevention
Emergency response procedures
Local contact information posting

Required Documents, Permits, Licenses, and Guidelines

Licenses and Permits

State Requirements:

Tennessee does not issue statewide STR permits, but you must comply with the Tennessee Short-Term Rental Unit Act (SB1086)

Local Requirements:

Bradley County Business License
City of Cleveland Business License
Cleveland STR Operating Permit ($300 fee)
Annual renewal required for all licenses and permits

Required Documentation

Typical application requirements include:

Personal identification (two forms showing proof of residence)
Federal EIN and Social Security Number or ITIN
Proof of ownership or lease agreement
Proof of residency (for owner-occupied properties)
Site plans and floor plans showing all rooms, doors, windows, and safety equipment locations
Insurance certificates evidencing minimum $500,000 liability coverage
Detailed ownership and contact information
Notarized affidavits confirming information accuracy

Safety and Compliance Requirements

Mandatory Safety Equipment:

Fire sprinklers (state requirement)
Smoke alarms in all sleeping areas
Carbon monoxide detectors on every habitable floor
Fire extinguishers (minimum 5-pound capacity)

Building and Safety Compliance:

Life-safety inspection by city officials
Compliance with local building and fire codes
Compliance with health and safety regulations

Specific Regulations for Short-Term Rentals

City-Level Regulations (Cleveland)

Permit Fee: $300 for STR operating permit
Permit Duration: Annual (365 days from issuance)
Inspection Requirement: Life-safety inspection mandatory
Nuisance Prevention: Must ensure no negative impacts on surrounding properties
Local Contact: Must post name and phone number of responsible local party

County-Level Regulations (Bradley County)

Business License: Required for all commercial operations
Lodging Tax: 7% on all short-term rentals
Zoning Compliance: Must comply with county zoning ordinances

State-Level Regulations (Tennessee)

Under the Tennessee Short-Term Rental Unit Act (SB1086):

Insurance Requirement: Minimum $500,000 liability coverage
Safety Equipment: Fire sprinklers, smoke alarms, carbon monoxide alarms
Definition: Residential dwelling rented for less than 30 continuous days
Business License: Required from county and city
Tax Obligations: State and local sales tax, hotel/motel tax

Occupancy Limits:

Maximum Occupancy: Generally limited to 2 guests per bedroom + 4 additional guests (maximum 12 total)
Age Requirements: Principal renters must be 21+ years of age
Rental Restrictions: Cannot rent to more than one party at a time

Operational Requirements:

Noise Compliance: Must abide by applicable noise restrictions
Waste Management: Must comply with waste management provisions
Parking: Must provide appropriate parking spaces
RV/Trailer Restrictions: No recreational vehicles, buses, or trailers visible on street or property

Tax Obligations

Cleveland Hotel/Motel Tax: 4% (approved May 2023, expected to generate ~$460,000 annually) Bradley County Lodging Tax: 7% Combined Lodging Tax: 11% total State and Local Sales Tax: Approximately 9.25%-9.75% Income Tax: Federal and state income tax applies to rental income

Contact Information for Local Authority

City of Cleveland - Planning Department

Director: Robert Varnell
Phone: 423-472-5041 (Cleveland Daily Banner contact)
Website: clevelandtn.gov
Address: 2075 N. Ocoee St., STE B, Cleveland, TN 37311

Bradley County Government

Phone: 423-728-7100
Website: bradleycountytn.gov

Tennessee Department of Revenue

Website: tn.gov/revenue
STR Information: tn.gov/revenue/for-businesses/for-hospitality-industry/short-term-rental-units.html

Source Pages and References

Cleveland Daily Banner - STR Tax Article: Short-term rentals in Cleveland subject to hotel/motel tax
StaySTRa Market Analysis: Cleveland, Tennessee Short-Term Rental Market Overview
Tennessee State Legislation: Tennessee Short-Term Rental Unit Act (SB1086)
iGMS State Regulations: Airbnb Regulations by State
SummerOS State Guide: Tennessee Short Term Rental Laws

Important Notes for Investors:

Regulations can change; always verify current requirements with city officials
Consider consulting with local legal counsel specializing in STR regulations
Factor the 11% combined lodging tax into your financial projections
Ensure your property insurance covers commercial short-term rental operations
Consider hiring a local property manager familiar with Cleveland regulations

This guide provides a comprehensive foundation for navigating Cleveland's STR regulatory environment. Success in this market requires thorough compliance with all applicable regulations while maintaining professional guest relations and community standards.

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Ask the AI Advisor about Cleveland

Cleveland, Tennessee is the county seat of Bradley County, set in the rolling foothills of the Appalachians in the southeastern corner of the state. With an estimated population of around 47,000, it has the feel of a sizeable small town while still functioning as the commercial and civic hub for the surrounding region. Cleveland is best known as a gateway to outdoor recreation in the Cherokee National Forest and along the Ocoee and Hiwassee rivers, and it carries an additional layer of identity as the home of Lee University, a private liberal arts college that gives the town a notable college-town rhythm. The city sits about 30 miles northeast of Chattanooga, roughly a 35- to 40-minute drive via I-75, putting the attractions of a mid-sized city within easy reach while keeping Cleveland in a quieter, more scenic setting.

One of the biggest draws in the area is the Ocoee River, located roughly 20 to 30 minutes east of Cleveland. The Ocoee is one of the most popular whitewater rafting destinations in the Southeast, and it famously hosted the slalom events during the 1996 Summer Olympics. The river draws rafters, kayakers, and spectators from across the region during the spring and summer release season, and the surrounding gorge scenery makes it a year-round draw for hikers and mountain bikers as well.

Just south of the city, Red Clay State Park preserves the site of the last seat of Cherokee government east of the Mississippi River before the forced removal of the Cherokee people on the Trail of Tears. The park, about a 15-minute drive from downtown Cleveland, includes a reconstructed council house, walking trails, and interpretive exhibits that explain the political and cultural history of the Cherokee Nation in the years leading up to removal. It is the only state park in Tennessee situated on the historical homeland of the Cherokee.

To the east, the Cherokee National Forest sprawls across more than 650,000 acres of the southern Appalachians, with multiple access points within about 30 minutes of Cleveland. Visitors come for hiking, waterfalls, trout fishing, and scenic drives along routes like the Cherohala Skyway, which connects Tennessee and North Carolina through some of the most remote terrain in the region. Together with the Ocoee and the Hiwassee rivers, the forest gives Cleveland an unusually rich outdoor offering for a town of its size.

Cleveland is a compelling base for short-term rentals because it pairs a calm, walkable downtown and a steady university population with quick access to some of the most distinctive outdoor and historical attractions in eastern Tennessee. Travelers who want whitewater rafting, mountain scenery, and Cherokee history can reach all of it in under an hour, while Chattanooga's restaurants, museums, and the Tennessee Aquarium are close enough for a day trip. That combination of small-town comfort and big-region access makes Cleveland well suited to guests looking for variety in a single stay.