Feedback on my cashflow model for the Smokies ?

[Saranya Sundararajan]

Smokies Cash Flow Model

We are looking to buy a 3bedroom in the Smokies and this is the model we came up with. Occupancy rates + Average Daily Rate - taken from Airdna 2019 data + assessing the airbnb/vrbo listings rate for these months

Can the experts/pundits as someone called it here, tell us if this is realistic , too conservative, too optimistic? I know it is property dependent but trying to guage if this a conservative estimate or not?

[Ken Boone]

@Saranya Sundararajan So there are a few numbers that may be a little off such as PMI. If you are putting 20% down you shouldn't have to carry PMI. 80k for a 3 bedroom is definitely doable. I have a 3 bedroom that did that pre-covid, and went up over 110k during covid. Don't think it's gonna do that this year, not quite sure where it will land. It does have a fantastic 270 degree view. Having said all that, your numbers look pretty good. Looks like you have been very thorough in your analysis. You might not need to spend all that much on furniture if you are purchasing an existing cabin.

But your numbers show why I am down on purchasing in that market right now for me, unless I find a deal. What you have listed is not a deal, it seems to be market rate. $400/mo cash flow on a 700k investment, carrying that much debt does not interest me. It might you though as we all have different reasons for investing. Basically you are taking on a second job for $400/mo carrying that much debt. Is that worth it to you? It might be. Perhaps you are happy to use this to learn, happy to have a 2nd home for family use and who knows why else. My point is for me that is a slim margin for an STR. Purchase prices are through the roof compared to what they have been, there is less demand and more supply, interest rates up, all of which are contributing to these slim margins. 3-4 years ago everything was a slam dunk. Not so today. I was there last week for the whole week. We are talking about spring break there, and except for Friday, traffic was waaaayy down compared to how it has been in years past.