Return Expectations for Gatlinburg/Pigeon Forge/Wears Valley

Knoxville, Tennessee
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Return Expectations for Gatlinburg/Pigeon Forge/Wears Valley

Sonya White
Investor · Knoxville · Member since 2022 · 2 posts · 2 votes

Hi All

I'm a new investor in the Smoky Mountains so any advice and recommendations are greatly appreciated.   What types of returns are people seeing with the current prices and interest rates in the Smoky Mountains? 

I'm wondering if my expectations are too high given the market conditions.  I'm hoping to cash flow between $20,000- $30,000 and cash on cash return of around 15%.  I'm having a difficult time finding anything that fits this without offering sellers significantly less, which would probably offend the sellers.    I'm looking at cabins with 2 beds/2 baths in the $600,000-800,000 price range with a 25% down payment.  Is this an unrealistic expectation?  To see these types of returns do I need to look at bigger cabins and in a different price range?

I will be self-managing because I will be using the short-term rental exception for tax purposes as my husband has a W-2 job.  

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Leora Merrell
Rental Property Investor · Member since 2019 · 276 posts · 235 votes
3y

I have five 2 bedroom cabins in the Smokies. Please don’t pay anywhere near $650-800k for one that size. You can find bigger for that price. It might take time but don’t buy one just because you feel the need to get in asap. 

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  • Brandon Gale
    Rental Property Investor · Worcester, MA · Member since 2018 · 131 posts · 135 votes
    3y

    I haven't had an STR for a full year but have spent a lot of time analyzing a bunch of Smoky mountain STRs, and have owned one for about 2 months now. $20k-$30k sounds a bit high for a 2 bed, but every scenario is different, if you have very high value amenities (movie theatre, amazing views, indoor pool, etc.) you may be able to hit those numbers, but you would really have to stick out as one of the best listings in the area.

    If you can get up to the $700k-$800k range in the Smokies you should be able to find a nice 3 or 4 bed, maybe even with a view. For reference, I recently closed on a newly renovated (in the last year) 4 bed cabin about 5 min from Dollywood with a killer view for $750k, it needed about $10k to finish up the renovation, but was well worth it in my eyes for the location and view.

    1Reply
  • Nicole Balsamo
    Member since 2023 · 40 posts · 17 votes
    3y

    I don't invest in the Smokies specifically so I can't add any personal anecdotes, but happy to drop a resource! I use Rabbu's free tools for stuff like this — you can use their Airbnb calculator to get a revenue estimate and then plug the purchase price into their calculator to get some rough return stats. It also gives you some insight into nearby competition and how they're performing too.

    0Reply
  • Sonya White
    OP
    Investor · Knoxville · Member since 2022 · 2 posts · 2 votes
    3y

    That sounds like a great place!! I'm definitely open to more bedrooms and going up in price if the returns are there.

    0Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    3y

    That is alot to pay for 2 bedroom cabin. You should be able to find something bigger for that much. Bigger will typically cash flow better.

    Try and find something with a view, it makes a difference.

    1Reply
  • Leslie Anne Morris
    Real Estate Agent · Smoky Mountains, TN · Member since 2022 · 1k+ posts · 984 votes
    3y

    I think this is totally doable based on how you've laid it out.  I have buyers preapproved and waiting for the right deal to hit the market.  Mountain views are where the money is OR an ultra special property (think something very unique, different or highly remodeled).

    0Reply
  • Alfath AhmedBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
    3y
    Quote from @Sonya White:

    Hi All

    I'm a new investor in the Smoky Mountains so any advice and recommendations are greatly appreciated.   What types of returns are people seeing with the current prices and interest rates in the Smoky Mountains? 

    I'm wondering if my expectations are too high given the market conditions.  I'm hoping to cash flow between $20,000- $30,000 and cash on cash return of around 15%.  I'm having a difficult time finding anything that fits this without offering sellers significantly less, which would probably offend the sellers.    I'm looking at cabins with 2 beds/2 baths in the $600,000-800,000 price range with a 25% down payment.  Is this an unrealistic expectation?  To see these types of returns do I need to look at bigger cabins and in a different price range?

    I will be self-managing because I will be using the short-term rental exception for tax purposes as my husband has a W-2 job.  

    I looked into the Smoky mountains for a whole year. I wanted to use a vacation loan 10% down to purchase an AirBNB property there; however, the number's never made sense. 

    I made a lot more money investing in short-term and mid-term rentals in the Columbus market near hospitals. Columbus is a strong growing city with a pool of outside investor money coming in. If you have any questions about the Columbus market, I would be happy to help you!
    [email protected]614-802-5698
    ReafCo | Ahmed Group 530 Reviews
    WebsiteView Page
    0Reply
  • Leora Merrell
    Rental Property Investor · Member since 2019 · 276 posts · 235 votes
    3y

    I have five 2 bedroom cabins in the Smokies. Please don’t pay anywhere near $650-800k for one that size. You can find bigger for that price. It might take time but don’t buy one just because you feel the need to get in asap. 

    4Reply
  • Leora Merrell
    Rental Property Investor · Member since 2019 · 276 posts · 235 votes
    3y

    I should clarify that mine clash flow incredibly well. But the most I paid for one of mine was $360k in 2021 and all of mine were brand new when I bought. But I would NEVER advise anyone pay the price you put in your post. Either wait for prices to come down (which I believe they will and already are) or go bigger in size. 

    2Reply
  • Brooklyn McCarty
    Investor · Member since 2022 · 1k+ posts · 754 votes
    3y

    I think this sounds reasonable. 

    I have made several purchases in The Smokies with Avery Carl’s team/The Short Term Shop. Their agents are excellent. 

    2Reply
  • Brian G.
    Rental Property Investor · Los Angeles, CA · Member since 2013 · 1k+ posts · 1k+ votes
    3y

    @Sonya White with current valuations and rates you really need to select the right type of property and look for a way to add value. This is not an easy time to get cashflow in the Smoky’s but it can be done. Good luck!

    0Reply
  • Wilson Hunter
    Investor · Greenville, SC · Member since 2020 · 210 posts · 302 votes
    3y

    Don’t pay more than 550 for 2BR in this market

    3Reply
  • Collin HaysBusiness Member
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    3y

    Deals can still be had in the Smokies, but it will require you to find a property underperforming, and with a cause that you can readily fix.  Maybe a property needs trees cleared for a good view; maybe the owner has allowed the furnishings to become old and worn-out; maybe it has been mismanaged.  

    All of my purchases except one have been from self-managers.  I can usually find one or two crazy things they are doing to significantly drag down returns that are easily remedied: 

    One guy I bought from wouldn’t rent to anyone from Florida or Ohio because of he had something damaged in the past from guests of FL and OH.  Another cabin, they required a $500 damage deposit for every guest.  

    One strategy I’ve used is to go on VRBO and just start contacting owners through the communication portal and ask them if they want to sell.  You’ll be shocked at how many owners are fed up and ready to sell.

    Good luck !




    [email protected]806-672-7102
    SMOKY MOUNTAIN FALLS INC.51 Review
    WebsiteView Page
    4Reply
  • Saranya Sundararajan
    Member since 2023 · 42 posts · 15 votes
    3y
    Quote from @Collin Hays:

    Deals can still be had in the Smokies, but it will require you to find a property underperforming, and with a cause that you can readily fix.  Maybe a property needs trees cleared for a good view; maybe the owner has allowed the furnishings to become old and worn-out; maybe it has been mismanaged.  

    All of my purchases except one have been from self-managers.  I can usually find one or two crazy things they are doing to significantly drag down returns that are easily remedied: 

    One guy I bought from wouldn’t rent to anyone from Florida or Ohio because of he had something damaged in the past from guests of FL and OH.  Another cabin, they required a $500 damage deposit for every guest.  

    One strategy I’ve used is to go on VRBO and just start contacting owners through the communication portal and ask them if they want to sell.  You’ll be shocked at how many owners are fed up and ready to sell.

    Good luck !





     would you consider a 2Bed + 1 loft as a 3 bedroom or a 2 bedroom? 

    1Reply
  • Collin HaysBusiness Member
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    3y
    Quote from @Saranya Sundararajan:
    Quote from @Collin Hays:

    Deals can still be had in the Smokies, but it will require you to find a property underperforming, and with a cause that you can readily fix.  Maybe a property needs trees cleared for a good view; maybe the owner has allowed the furnishings to become old and worn-out; maybe it has been mismanaged.  

    All of my purchases except one have been from self-managers.  I can usually find one or two crazy things they are doing to significantly drag down returns that are easily remedied: 

    One guy I bought from wouldn’t rent to anyone from Florida or Ohio because of he had something damaged in the past from guests of FL and OH.  Another cabin, they required a $500 damage deposit for every guest.  

    One strategy I’ve used is to go on VRBO and just start contacting owners through the communication portal and ask them if they want to sell.  You’ll be shocked at how many owners are fed up and ready to sell.

    Good luck !





     would you consider a 2Bed + 1 loft as a 3 bedroom or a 2 bedroom? 


     If the loft is set up as a bedroom, it is a loft bedroom and should be indicated as such.  Not a big deal.

    [email protected]806-672-7102
    SMOKY MOUNTAIN FALLS INC.51 Review
    WebsiteView Page
    0Reply
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