I have 5 cabins in the market that I self manage. If you don’t self manage you won’t makr cash. It’s easy. I do it in 5 minutes per day from the John.
Purchase prices have gone up significantly since the fires. As they have everywhere in the country.
Occupancy rates remain constant. Which is constantly packed. We’re 90% year round. I’m sure the rest of our Gatlinburg/PigeonForge posse will chime in shortly.
Hey William! The rentals were initially affected for just a few months by the fires (which were almost 2 years ago at this point), but not anymore. What it actually did was drive down supply and drive up demand for cabin rentals. I have sold several cabins in that area in the past few months and rental business (and in turn purchase prices) are booming. Prices are steadily increasing, and the good properties are going for over asking price/multiple offers within a few days BECAUSE of the high rental income cashflow (assuming you don't put the rentals with a crappy PM). If you've got land there you can build on I would say knock yourself out! Go make that money!
From an investment perspective, it's a supply/demand question. The fires squeezed the supply, so demand is up.
I have two cabins in GB/PF and zero trouble renting them. Rarely have an empty night.
I agree with Lucas and Avery. I will add that the cost of building has probably went up so to the demand for builders. When we inquired about building our next cabin instead of purchasing several people told us there was a waiting line for builders.
Thanks everyone that’s a big help. I have a builder that told me it would run me 150 sq ft and he could start right away but he is building a couple more homes as we speak so it would take about 8 months for completion. If you are renting on your own is it difficult if you don’t live In the area? My wife stays at home so she could organize but is it easy finding cleaning people to clean them and to get them the keys when you don’t live in the area? You all have been a tremendous help with your responses so thank you very much!
resources for rebuilding are difficult to get now due to all the active construction, no question. If you are in the City portion of Chalet Village, Ben prepares for delays with inspections during the process as they are overwhelmed.
You can manage yourself, use a local PM, or go with something like EVOLVE. I use the latter and both cabins are already over 60K with about 60% utilization.
@William Denniston I currently have 3 builds going with 2 builders right now in the area. BE CAREFUL on choosing your builder. I interviewed a dozen and after walking through some of their builds I wouldn't let them build a mud pie for me. Costs can go from $135-$160 sq ft depending on your design, foundation, and interior finishings. My most unique design is running $160 sq ft but I still have to furnish it so all in with furnishings is $290K + Land to get operational for a 3 bedroom and for my 5 bedroom (3,100 sq ft) $440K + Land to be operational. If they are saying $150 sq ft and never set foot on your lot then expect problems and run away. My suggestion is if you do not have an excellent view from your lots then sell them and get with @Avery Carl to find you a decent cabin as it would be cheaper in the long run and provide cash flow immediately. If you have a good view then possibly build if the lot isn't very steep as the foundation can run from $20K to $100K+ . The lot is everything in making the decision. If you want to build check with the contractors at NatureCraft or Natural Elements. It just so happens both the guys at these have the same name "Steve".
Chris thanks so much for the advice. I have really only talked to one builder which obviously I need to talk to a few more before I spend the money to have something built. I was talking with my wife about possibly just buying something that is already built but the prices are going up really fast and don’t want to overpay for something in the long run so I keep looking for things that come up for sale. Much appreciated on the info
@William Denniston prices are only going to continue to go up. With all of the short term rental regulations being imposed in major cities, tons of short term rental investors are now looking to move their money to markets such as Gatlinburg/Pigeon Forge where the economy depends on short term rentals, and there is a minuscule chance of regulations on STR's tightening, which is continuing to drive the prices up.
Also, one thing to remember in a competitive market: if the cash-flow numbers work at full price, it's still a good deal. It's important to pay attention to ROI and not get caught up in what price someone else paid for a property, or how much the property cost 10 years ago. Prices may take a dip here and there, but they are not going to go down significantly anytime soon. Obviously, we all want the best deal we can get, but waiting around for another crash that may or may not happen is cash flowing you zero dollars.