Buying STR in Smoky Mountains

[Parul Bhasin]

Hi, I am trying to find STR in smoky's under $200,000 with 2BD and great views. Market is too hot right now so I am ready to wait for a few months to get a good deal. I have heard TN is a better option than NC due to low taxes. Can you recommend good areas within Smoky's that are in my budget?

I am a newbie so any help/recommendations are appreciated. Thanks.

[Ken Boone]

uh nowhere.  sorry man that is just the facts.

[Collin H.]

Quote from @Parul Bhasin:

Hi, I am trying to find STR in smoky's under $200,000 with 2BD and great views. Market is too hot right now so I am ready to wait for a few months to get a good deal. I have heard TN is a better option than NC due to low taxes. Can you recommend good areas within Smoky's that are in my budget?

I am a newbie so any help/recommendations are appreciated. Thanks.

$200K is going to be tough.  I would say $300K is more the low-end of realistic, and that would probably be in Cosby.

That being said, there’s nothing wrong with Cosby whatsoever.  I bought a wonderful property there about 14 months ago that is yielding about 25%, annual rents % to purchase price.  

Cosby is being discovered though:  When I bought my first property there in 2005, there were 20-25 listings for Cosby on VRBO.  Now there are hundreds.  

Good luck in your search!

[Luke Carl]

@Avery Carl what’s a 2 bed with a view today? @Julie McCoy

[John Carbone]

Quote from @Parul Bhasin:

Hi, I am trying to find STR in smoky's under $200,000 with 2BD and great views. Market is too hot right now so I am ready to wait for a few months to get a good deal. I have heard TN is a better option than NC due to low taxes. Can you recommend good areas within Smoky's that are in my budget?

I am a newbie so any help/recommendations are appreciated. Thanks.

Mid 300s now for that, and probably no view. 

[Luke Carl]

@Reagen Natho 

[Wilson Hunter]

I saw a shed that was leaning 45 degrees with half the roof torn off for about $200k. The listing description said "great fixer upper opportunity."

[Reagen Natho]

A 2 bed in the Pigeon Forge/Gatlinburg/Sevierville area is going to roughly run you in the $550-$650k range. With a killer view, you will probably be looking a little north of that. 

I do like what @Collin H. said above. I had a client get a super cute studio cabin in Cosby under contract for around $250k recently. It could be a great place to look, especially if you want a view. 

[Robin Simon]

Quote from @Parul Bhasin:

Hi, I am trying to find STR in smoky's under $200,000 with 2BD and great views. Market is too hot right now so I am ready to wait for a few months to get a good deal. I have heard TN is a better option than NC due to low taxes. Can you recommend good areas within Smoky's that are in my budget?

I am a newbie so any help/recommendations are appreciated. Thanks.

 Yes taxes are important, but you really shouldn't just writeoff North Carolina vs. Tennessee due to "higher taxes".  There is a lot behind the argument that East TN is oversaturated right now, I'd recommend being more openminded by state

[Parul Bhasin]

I found some properties in Whittier,NC. Anyone has STR in the location? Is a good option to consider?

[Collin H.]

Quote from @Reagen Natho:

A 2 bed in the Pigeon Forge/Gatlinburg/Sevierville area is going to roughly run you in the $550-$650k range. With a killer view, you will probably be looking a little north of that. 

I do like what @Collin H. said above. I had a client get a super cute studio cabin in Cosby under contract for around $250k recently. It could be a great place to look, especially if you want a view. 

 Reagen, good info.  For your investors buying in PF/Gatlinburg these days, what is a generally acceptable annual yield?  Meaning annual rents-to-purchase price ratio.  ($50K to $500K being 10%, etc.).  It appears investors are OK with as little as 7 to 8 percent these days on a lot of deals.  

[John Carbone]

Quote from @Reagen Natho:

A 2 bed in the Pigeon Forge/Gatlinburg/Sevierville area is going to roughly run you in the $550-$650k range. With a killer view, you will probably be looking a little north of that. 

I do like what @Collin H. said above. I had a client get a super cute studio cabin in Cosby under contract for around $250k recently. It could be a great place to look, especially if you want a view. 

I agree! I referred my sister on that one. The roi should be great on it! Collin turned me on to Cosby a few years ago. 

[Reagen Natho]

@John Carbone is Jennifer your sister?! 

[John Carbone]

Quote from @Reagen Natho:

@John Carbone is Jennifer your sister?! 

Yes she is. 

[Reagen Natho]

Quote from @John Carbone:

Quote from @Reagen Natho:

@John Carbone is Jennifer your sister?! 

Yes she is. 

So awesome! I LOVE that little cabin. I’m so happy y’all found it. I may be their first guest. 😂 I want to run away from my kids and spend the weekend relaxing in the porch, listening to the river. They’re gonna kill it. 

[Reagen Natho]

Quote from @Collin H.:

Quote from @Reagen Natho:

A 2 bed in the Pigeon Forge/Gatlinburg/Sevierville area is going to roughly run you in the $550-$650k range. With a killer view, you will probably be looking a little north of that. 

I do like what @Collin H. said above. I had a client get a super cute studio cabin in Cosby under contract for around $250k recently. It could be a great place to look, especially if you want a view. 

 Reagen, good info.  For your investors buying in PF/Gatlinburg these days, what is a generally acceptable annual yield?  Meaning annual rents-to-purchase price ratio.  ($50K to $500K being 10%, etc.).  It appears investors are OK with as little as 7 to 8 percent these days on a lot of deals.  

That's a very personal decision that has to make sense to the investor and their numbers. People invest for so many different reasons... I had a guy I talked to the other day that paid in over $100k in taxes last year. He'd rather put that $100k into an investment property that will be paid for by someone else and cashflow a bit on top of it. 

[John Carbone]

Quote from @Robin Simon:

Quote from @Parul Bhasin:

Hi, I am trying to find STR in smoky's under $200,000 with 2BD and great views. Market is too hot right now so I am ready to wait for a few months to get a good deal. I have heard TN is a better option than NC due to low taxes. Can you recommend good areas within Smoky's that are in my budget?

I am a newbie so any help/recommendations are appreciated. Thanks.

 Yes taxes are important, but you really shouldn't just writeoff North Carolina vs. Tennessee due to "higher taxes".  There is a lot behind the argument that East TN is oversaturated right now, I'd recommend being more openminded by state

East Tennessee gets the tourists though and it always has. I think places like Bryson city are getting over saturated and there’s just not enough demand. 

[John Carbone]

@Collin H.is the Cosby whale. 

[Collin H.]

Quote from @John Carbone:

@Collin H.is the Cosby whale. 

Ha.  You're funny John.  We actually own and manage cabins throughout the entire area, but certainly the Cosby cabins do well.  On a yield basis, every bit as well as Gatlinburg.  

[Collin H.]

Quote from @Reagen Natho:

Quote from @Collin H.:

Quote from @Reagen Natho:

A 2 bed in the Pigeon Forge/Gatlinburg/Sevierville area is going to roughly run you in the $550-$650k range. With a killer view, you will probably be looking a little north of that. 

I do like what @Collin H. said above. I had a client get a super cute studio cabin in Cosby under contract for around $250k recently. It could be a great place to look, especially if you want a view. 

 Reagen, good info.  For your investors buying in PF/Gatlinburg these days, what is a generally acceptable annual yield?  Meaning annual rents-to-purchase price ratio.  ($50K to $500K being 10%, etc.).  It appears investors are OK with as little as 7 to 8 percent these days on a lot of deals.  

That's a very personal decision that has to make sense to the investor and their numbers. People invest for so many different reasons... I had a guy I talked to the other day that paid in over $100k in taxes last year. He'd rather put that $100k into an investment property that will be paid for by someone else and cashflow a bit on top of it. 

We see the same.  Even if you aren't making a dime of positive cash flow, the big money is that someone else is paying off a significant asset for you, that is appreciating over time.  Far too many get caught up in the monthly income side of things and focus on that exclusively.  

My first cabin, purchased in 2005, I was negative cash flow for years, yet it still turned out to be a terrific investment over the long term.  Someone else paid it off, and it tripled in value while they were doing so.  Heck of a return.  

[Max L.]

Quote from @Parul Bhasin:

I found some properties in Whittier,NC. Anyone has STR in the location? Is a good option to consider?

Whittier is small. I own in a town close-by and have actually stayed in a STR in Whittier. Not much to do in Whittier, however its a short drive to Bryson City/Cherokee. Instead of broad brush "is this a good investment" I suggest you do a deep dive into the STR's already in the area and compare their rates to what your total investment will be after the property is ready to rent. There will be a small window to raise the daily rate during the month of October during peak fall colors, but that's about it for the year.

It's also noteworthy to actually look into where these mountain properties are on a map. Just because a home has a "Whittier" address doesn't mean its anywhere close to the attractions short term renters seek. Sometimes homes can be 1hr+ away from the town shown on its mailing address due to the topography of the land. 

Good luck!

[Jonathan Stevens]

I purchased a 2bd 2ba in Sevierville about 3 miles from Dollywood. I paid 425k in October 2021 and I still had to put about 50k in updates and furnishings to get it listed. Not sure what you will find for 200k unless its a condo. 

[Dale Summons]

@Collin H. These are the stories that drive so many. I often think about those who purchased in say DC 20 yrs ago....i mean, my goodness. The appreciation is off the charts. Massive gains

[Mitch Davidson]

@Parul Bhasin: As @Max L. said, you really need to look at this property on a map. Hopefully your agent will be brutally honest about the location. There are some spots of Bryson City, Almond, Whittier, Webster, etc. that are 30+ minutes from anything your guests will want or need, and to make it worse up very twisty roads.

Also, if you won't be able to be on site a lot of the initial setup of the home, and if you don't have the time or patience for that phase to go much longer than normal, I would look at other markets instead. In these towns, I can speak from experience, the few contractors you can find are booked far out, often don't really need your business, and are typically found only by word of mouth.

For that reason, you might find that photos of listings in this particular market on average don't look as great as a market where more help is available. STR owners seem to often have to settle for a little less wow factor due to lack of help. On the flip side, if you can put your own hands into the work and make the wow factor happen yourself, you may find it a little easier to stand out compared to some other markets.

[Gopalakrishna Bhat]

I recently came on vacation to Gatlinburg, TN, and fell in love with the place. I spent 2 days with first-day spending around Anakeesta, Skywalk, eating, walking, and the next day on the mountains doing some trekking. Did a couple of trails till dusk and returned to the hotel.

I am interested in buying an STR in Sevierville/ Pigeon Forge / Gatlinburg surroundings. How much would it cost for 3 bedrooms/2.5 baths? What are the returns on STR? How is the STR in winter during the months of Dec to March? If there is no short-term rentals during winter, how does the owner take the keys?

Trying to figure out the details and educate myself. Any help would be appreciated. 

Thanks

[Collin H.]

Quote from @Gopalakrishna Bhat:

I recently came on vacation to Gatlinburg, TN, and fell in love with the place. I spent 2 days with first-day spending around Anakeesta, Skywalk, eating, walking, and the next day on the mountains doing some trekking. Did a couple of trails till dusk and returned to the hotel.

I am interested in buying an STR in Sevierville/ Pigeon Forge / Gatlinburg surroundings. How much would it cost for 3 bedrooms/2.5 baths? What are the returns on STR? How is the STR in winter during the months of Dec to March? If there is no short-term rentals during winter, how does the owner take the keys?

Trying to figure out the details and educate myself. Any help would be appreciated. 

Thanks

 Your story sounds a lot like mine from way back in 2005. The Gatlinburg area is really terrific.  There will be realtors chime in as to prices, and I would recommend that you contact them.  At a minimum, it is realistic that you can buy a property that will completely cash flow, meaning all of the expenses, including your mortgage, management fees, etc., can be taken care of with the rental income.  That means that someone else (your guests) are doing your investing and building your nest egg.  There are not many places in the U.S. that can truly claim that.  

There is also the potential for profit over and above your expenses, but usually only if you self manage.  You are effectively signing up for a part time job, but many do it very effectively and enjoy the experience.