Are the Smokey mountains still a good STR strategy?

Question

Hi all,

just started out and have read and watched a few videos. I’ve been following Robuilt on YT and he mentioned national parks are great. My process would be to buy vacant land, build new, and cash out refi to continue gathering more. Is this still area still profitable and would this strategy of building new be the right way to start out? Thank you

Tyler Solomon · Answer

Absolutely, however I would look into finding a deal that does not require new construction, unless your time horizon is rather long. Much easier to find an existing property and run the numbers as is.

Luke Carl · Answer

As the others have said Buying land and building is not Something I would do.

My cabins are packed as always!

Collin Hays · Answer

Absolutely! It’s all about finding the right deal and figuring out a plan. I just closed on a cabin last month.

John Carbone · Answer

The building new is difficult to do on many levels. If you have a long time horizon then yes. I personally haven’t found a good deal pop up recently. Rentals are strong though in terms of revenue and occupancy levels, issue now is going to be your operating costs.

I also wouldn’t suggest the glamping like robuilt is into. someone tried this here and just last week they were selling their domes/tents…the really expensive ones from pacific domes on Facebook, and they are still available.

Allan Smith · Answer

I don't know how anyone is making money in the Smoky Mountains buying houses at their current prices the past couple years. I've run numbers a few times and I came up with something like 12% cash on cash Roi because the houses are so expensive. I can get better than that with a long-term rental, and then I don't have to worry about all the extra Hassle and risk of not getting enough bookings or good prices due to economy or trends changing.

Collin Hays · Answer

Hmm. I bought one in May of 2021 for $190K that will do $57K this year. Bought another one for $270K two months ago that I think should do $40K a year after I spend about $45K on it. Lots of deals to be had. You've just got to get your hands dirty and dig.

Travis Timmons · Answer

Demand is certainly there. Margins are compressed based on current home values since it is a more mature STR market. There are 63 National Parks and probably half of those get over 1M visitors per year. If you want to look at National Parks, there are others that offer a far better cash on cash return.

Rather than shoe-horning the Smoky Mountains into your investment portfolio, I'd suggest doing something in an area where you have some sort of domain expertise. Where do you vacation? Where have you lived? Those sorts of questions are likely a better guide than asking if the Smoky mountains are good. For the right investor, of course.

We bought a place near a national park because we've been to 35 of them as a family, got a feel for a few markets, and know how to kill it with that crowd (bc we are that crowd).

Michael Baum · Answer

Hey @Mukul Patel, what @John Carbone and @Collin H. said is correct. The area is great for STRs if you can find the right deal.

From what I have heard from many others, 2-3 years is the timeframe to build in the Smokies. Things may have loosened up and Collin and John would know.

If you have the time, it could be a good way to go. Could be possible to bring in builders from out of state? Not sure about the legalities.

Leslie Anne Morris · Answer

Yes! You want to make sure you buy what the majority of travelers are looking to book in the right areas.

John Underwood · Answer

More people visit the Natuonal Park there every year than the visit the Grand Canyon. 10 Million people annually.

As everyone else has said you have to find a property where the numbers work.

Are the Smokey mountains still a good STR strategy?

Are the Smokey mountains still a good STR strategy?

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