Short‑Term Rentals In Hixson: Investor Guide

Thinking about an Airbnb or Vrbo in Hixson but unsure how the rules work block by block? You are not alone. Hixson falls mostly inside Chattanooga city limits, with some parcels in unincorporated Hamilton County, and those lines change the playbook for your returns. In this guide, you will learn how to confirm where an STR is allowed, the difference between homestay and absentee permits, what to expect with registration and taxes, and how to underwrite your deal with a compliance‑first lens. Let’s dive in.

Start with jurisdiction

Before you model revenue, confirm exactly where the parcel sits.

• Many Hixson addresses are inside Chattanooga city limits, but some are in unincorporated Hamilton County.
• City and county rules differ. Your permit path, inspections, and long‑term risk profile depend on this first answer.
• If there is any doubt, use city and county GIS tools or call planning and zoning staff to confirm in writing.

Tip: Save the jurisdiction confirmation to your file. Lenders, insurers, and future buyers will ask for it.

Homestay vs absentee STRs

Chattanooga typically separates STRs into two types. Your underwriting, insurance, and exit options shift based on which applies.

Homestay (owner‑occupied)

• The dwelling is your primary residence, and you are present for part of the stay or live on site between rentals.
• Generally easier to permit in many residential zones, with fewer restrictions and lower fees.
• Still requires proper STR‑specific insurance or endorsements.

Absentee (non‑owner occupied)

• The property is not your primary residence.
• Often limited to certain zoning districts or may need a conditional or special permit. Some areas can prohibit or cap these.
• Carries higher regulatory risk, more scrutiny, and potentially higher operating complexity.

Underwriting takeaway: Treat absentee STRs as a higher‑risk asset class. Model added time and cost to obtain approvals and a greater chance of enforcement actions.

Where STRs are allowed

Eligibility depends on zoning and any overlay layers for the parcel.

• In Chattanooga, owner‑occupied homestays are generally permitted in many residential districts with registration and safety compliance.
• Non‑owner STRs are more restricted and may be allowed only in specific residential, mixed‑use, or commercial districts, sometimes by special approval.
• Overlay, historic, or neighborhood plans in Hixson can add parking, design, or use limits.

Verify zoning in four steps

1. Look up the property on the City of Chattanooga parcel and zoning map to confirm the zoning code.
2. Match that zoning to the Unified Development Code and STR ordinance to see what is allowed for homestay vs absentee.
3. Check for overlays or neighborhood provisions that change the rules on your specific block.
4. If your plan is absentee, ask planning staff for a written interpretation before you commit capital.

Registration and renewal

Expect a permit or registration process if the property is inside Chattanooga.

• Typical application items include owner and emergency contacts, a 24‑hour local manager, a parking plan, and proof that the homestay is a primary residence if you apply as owner‑occupied.
• You may need to show basic life‑safety compliance such as smoke and carbon monoxide alarms and a fire extinguisher. Some jurisdictions inspect before issuing a permit.
• Renewals are usually annual. Budget for renewal fees and keep your contact information current to avoid lapses.

Documents to collect early

• Current or prior STR registration number for the address, if any
• Copy of the application and permit, plus renewal history
• Proof of primary residence for homestays, if applicable
• Local manager agreement and 24/7 phone number

Life safety, occupancy, and parking

Most STR programs require simple but important safeguards.

• Life safety: Working smoke detectors, carbon monoxide detectors where applicable, and at least one fire extinguisher. Keep receipts and device locations documented.
• Occupancy limits: Many cities cap guests by bedroom count or square footage. Confirm the rule that applies to your permit type.
• Parking: Off‑street spaces may be required. If the driveway is narrow or on a busy street, you may need a written plan that limits curbside parking.

Practical note: Obtain any inspection reports and place them in your diligence file. They help with insurance and resale.

Taxes and business licensing

Plan for tax and license compliance from day one.

• Sales and lodging taxes: Register with the Tennessee Department of Revenue to collect and remit applicable state and local taxes on short stays.
• City business tax: Some locations require a local business license or tax account in addition to the STR permit.
• Underwriting: Ask for 12 to 24 months of tax returns or remittance confirmations on existing listings to verify revenue and compliance.

Platform compliance

Major platforms increasingly require a valid local registration number to list legally.

• Unregistered listings risk deactivation.
• If you are buying an operating STR, confirm the listing shows a local registration number and that it matches city records.

Underwriting tip: Screenshots of live listings and payout histories should be part of your closing file.

Enforcement and penalties

Understand how enforcement works so you can model downside scenarios.

• Complaints trigger investigations, inspections, and potential fines.
• Penalties can include daily fines, a stop‑use order, and suspension or revocation of your permit.
• Platforms may remove your listing if you cannot prove compliance.
• Unpaid taxes and fines can become liens that affect title.

Model for downtime. A suspension can halt bookings immediately. Build a cash cushion and a plan to cure violations fast.

Compliance‑first underwriting checklist

Use this checklist for any Hixson STR target. Save each item as a PDF in your deal folder.

• Jurisdiction and zoning
  • Confirm Chattanooga city limits vs unincorporated Hamilton County.
  • Confirm zoning district and any overlay or historic designation.
• Permits and registration
  • Copy of current or prior STR permit, with type noted: homestay vs absentee.
  • Permit expiration date and renewal record.
• Taxes and licensing
  • Proof of registration with the Tennessee Department of Revenue for sales and lodging taxes.
  • Proof of tax remittances for the last 12 to 24 months.
  • City business license or local tax account in good standing.
• Safety, inspections, insurance
  • Life‑safety checklist or inspection report.
  • Insurance policy or endorsement that covers STR use and adequate liability limits.
• Operations
  • Local manager name and 24/7 contact number.
  • Parking plan and trash plan suited to the property.
• Legal and neighborhood constraints
  • HOA or POA covenants and any enforcement letters.
  • Open code cases, prior warnings, unpaid fines, or liens.
  • Any caps or density limits that could affect long‑term operation.
• Financial evidence
  • Prior 12 to 24 months of revenue and occupancy data.
  • ADR assumptions with sensitivity to off‑season and regulatory downtime.
• Title and transferability
  • Title search for municipal or tax liens.
  • Whether any special permits are transferable after sale.
• Lender and insurance acceptance
  • Lender approval for STR use and any covenants.
  • Insurance exclusions reviewed and addressed.
• Contingencies
  • Shutdown plan and reserve target for at least 3 months of revenue loss.
  • Exit plan to convert to long‑term rental if needed.

Step‑by‑step diligence workflow

1. Confirm jurisdiction and zoning with city or county staff.
2. Pull the city STR registry to see if the address holds an active permit.
3. Request the seller’s permit, tax registration, remittance proof, inspection report, and 12 to 24 months of STR statements.
4. Order a title and lien search that checks for municipal fines and tax liens.
5. Obtain HOA documents and a written statement on STR rules.
6. Validate that the platform listing shows a registration number and matches city records.
7. Meet the local manager and review parking and trash plans. If possible, visit during a turnover.
8. Stress‑test your pro forma for a 30 to 90 day downtime after a violation.

Pro forma modeling tips

• Conservative ADR: Use trailing actuals and discount for seasonality and potential regulatory pauses.
• Occupancy: Cap at a realistic level for your submarket, then run a downside case.
• Expenses: Add platform fees, local manager cost, increased utilities, higher insurance premiums, and turnover maintenance.
• Compliance costs: Include permit fees, inspection fees if any, and annual renewals.
• Reserves: Hold at least one quarter of gross revenue for unexpected repairs or enforcement downtime.

Red flags to pause a deal

• Permit type does not match how the property operates.
• Seller cannot produce proof of tax registration and remittances.
• HOA covenants restrict STRs, or the neighborhood cap is reached.
• Prior violations, unpaid fines, or evidence of platform deactivation.
• Zoning or overlays that clearly prohibit absentee STR use on the parcel.

How local guidance adds value

A knowledgeable local advisor helps you map parcel‑level rules to a clear investment plan. That means verifying jurisdiction and zoning up front, collecting the right compliance documents from the seller, and coordinating with planning staff when the rules are nuanced. With experienced transaction management, you can avoid costly surprises and move from offer to permit renewal with confidence.

If you are weighing a homestay vs absentee strategy in Hixson, want help pressure‑testing a pro forma, or need an introduction to a reliable local manager, let’s talk. Connect with Jane Armstrong to review your target address, confirm compliance steps, and align your acquisition with your goals. Request a Free Home Valuation to benchmark exit scenarios and long‑term value.

FAQs

What counts as a homestay in Chattanooga?

• A homestay is typically an owner‑occupied rental where the dwelling is your primary residence and you are present for part of the guest stay or live on site between rentals.

Are absentee short‑term rentals allowed in Hixson?

• Absentee STRs can be more limited. They are often allowed only in certain zoning districts or by special approval, and some areas may cap or prohibit them. Verify parcel zoning before you buy.

Do I need an inspection for a Hixson STR?

• Many programs require basic life‑safety compliance such as smoke and carbon monoxide alarms and a fire extinguisher. Some jurisdictions inspect before issuing a permit or during renewal.

What taxes apply to short‑term rentals in Tennessee?

• You must register to collect and remit state sales tax and any applicable local lodging or hotel taxes. Keep proof of registration and remittances for 12 to 24 months.

How are STR rules enforced in Chattanooga?

• Enforcement is often complaint‑driven. Penalties can include fines, stop‑use orders, and permit suspension or revocation. Platforms may remove noncompliant listings.

What should I request from a seller of an operating STR?

• Ask for the STR permit, renewal history, tax registration and remittance proof, inspection reports, insurance policy with STR coverage, and 12 to 24 months of booking and payout data.

How do overlays affect Hixson STRs?

• Overlay or historic districts can add use, design, and parking limits that change what is allowed on your specific parcel. Always check overlays in addition to base zoning.