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

SHORT-TERM RENTALS ARE PROHIBITED IN COLLIERVILLE, TN. Collierville has explicitly banned short-term rental properties, with the only exception being bed and breakfast establishments. This prohibition applies to all forms of short-term rentals, including those operated through platforms like Airbnb, VRBO, and HomeAway.

The town defined short-term rentals as "an existing dwelling or unit used for transient occupancy" for periods less than 30 days, covering various property types including mobile homes, attached or detached dwellings, townhouses, and modular homes. The prohibition was implemented through Ordinance 2017-10, which amended the town's zoning ordinance to specifically prohibit short-term rentals.

How to Start a Short-Term Rental Business in This Market

As of the most recent available information, it is not possible to start a new short-term rental business within Collierville town limits. The prohibition remains in effect, and any attempts to operate an STR would be illegal.

For investors specifically interested in Collierville, the options are extremely limited:

1. Consider Bed and Breakfast Operations: Bed and breakfasts are the only lodging exception to the STR prohibition. However, these require different licensing, operational requirements, and zoning considerations.

2. Look at Adjacent Markets: Since Collierville proper prohibits STRs, investors might consider nearby areas in Shelby County or adjacent municipalities that allow STRs (such as Memphis, which regulates but permits STRs).

3. Long-Term Rental Strategy: Given the STR prohibition, the traditional rental market in Collierville may present opportunities for long-term investment properties.

Required Documents, Permits, Licenses, and Guidelines

For Short-Term Rentals: NONE - STRs are prohibited

For Bed and Breakfast Operations (if considering this alternative):

• Business license from Collierville
• Shelby County business license
• Bed and breakfast specific permits (requirements would need to be obtained from town authorities)
• Compliance with zoning requirements for commercial lodging
• Insurance requirements specific to hospitality operations
• Health department permits if serving food
• Fire safety certifications

For Traditional Long-Term Rentals:

• Standard rental property requirements apply
• Property management licenses if applicable
• Standard landlord-tenant compliance documentation

Specific Regulations for Short-Term Rentals

Collierville Municipal Regulations

Prohibition Status: STRs are explicitly prohibited under Ordinance 2017-10, which amended Title XV, Chapter 151 of the Town Code of Ordinances.

Definitions Affected:

• Short-term rental defined as rental for less than 30 days
• Applies to various dwelling types: single-family, multi-family, mobile homes, townhouses, modular homes
• Transient occupancy is the key regulatory trigger

Enforcement:

• Town has demonstrated active enforcement, with operators receiving cease and desist letters
• Existing operators were given until September 2017 to wind down operations
• Regular monitoring of STR platforms to identify violations

Bed and Breakfast Exception:

• Bed and breakfast establishments are explicitly exempt from the prohibition
• These must comply with separate regulatory framework for hospitality businesses
• Would be subject to commercial zoning requirements and specific B&B regulations

Shelby County Level

No county-specific STR regulations provided in the sources. County regulations would apply to unincorporated areas of Shelby County, but Collierville is an incorporated municipality with its own zoning authority.

Tennessee State-Level Regulations

While Collierville has chosen to prohibit STRs entirely, Tennessee maintains statewide regulations under the Tennessee Short-Term Rental Unit Act (SB1086) that would apply in jurisdictions that allow STRs:

State Requirements:

• Minimum $500,000 liability insurance (unless marketplace provides equivalent coverage)
• Fire sprinklers, smoke alarms, and carbon monoxide alarms required
• Compliance with health and safety regulations

State-Level Tax Obligations (for reference in permitted jurisdictions):

• County and city room/hotel occupancy taxes (rates vary by location)
• State and local sales taxes (typically 9.25%-9.75% combined)
• Income tax obligations on STR revenue
• Property tax requirements

Licensing Requirements in Permitted Areas:

• City and county business licenses required
• Local STR permits/licenses in most Tennessee cities
• Annual renewal requirements
• Various documentation including proof of ownership, insurance, and safety compliance

Contact Information

Town of Collierville Development Department

• Planning Division: Contact through town website
• Address: 500 Poplar View Parkway, Collierville, TN 38017
• Phone: (901) 457-2300

Key Departments for Regulatory Inquiry:

• Planning Division: Handles zoning questions and development applications
• Building and Codes Division: Code compliance and permit questions
• Town Administrator's Office: Policy and ordinance interpretation

For State-Level Tennessee STR Information:

• Tennessee Department of Revenue: General tax and licensing information
• Tennessee Secretary of State Business Division: Business registration

Important Considerations for Investors

Market Implications:

• The STR prohibition creates a unique market dynamic where traditional short-term rental investment strategies cannot be deployed within Collierville proper
• Adjacent markets (Memphis, unincorporated Shelby County) may present investment opportunities
• The prohibition may affect property values and rental market dynamics in Collierville

Compliance Risks:

• Operating an STR in Collierville would result in immediate code violations
• Potential fines, legal action, and forced cessation of operations
• Risk to investment capital if purchasing property with intent to operate STR

Alternative Strategies:

• Consider bed and breakfast establishment (different regulatory framework)
• Focus on long-term rental properties within Collierville
• Explore adjacent markets in Shelby County that permit STRs
• Consider hospitality-related businesses that might be permitted under different zoning classifications

Source References

1. Town takes step to prohibit short-term rental properties - Collierville Independent

2. Summary of Recent Changes - Collierville Planning Department

3. Tennessee Short Term Rental Laws - Summer

4. Airbnbs are over for Collierville - Commercial Appeal

Disclaimer: This guide is based on available information through 2025. Regulatory environments can change, and investors should verify current regulations directly with Collierville authorities before making any investment decisions. The prohibition on STRs in Collierville represents one of the most restrictive regulatory environments in the Tennessee market, and investors should carefully consider this constraint when evaluating opportunities in this jurisdiction.