Deciding to sell or keep cabin in Gatlinburg

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Deciding to sell or keep cabin in Gatlinburg

Alexander Achim

Dacula, GA · Member since 2015 · 8 posts · 12 votes

Hello BP, I’ve got a question I’m hoping some seasoned investors can help or give their insight . I just finished a pool cabin 4 bedroom 6 bathrooms . 4200 sq feet in gatlinburg with theatre , sauna , steam shower arcade indoor heated pool. Appraisal. Location is great , view is good and overall I like the cabin but the situation is :

950k mortgage at 8% . So mortgage sits around 7k without taxes .Just got our appraisal and looking at comps realistically 800-900 equity currently . We did the build ourselves so we saved alot of money but I don’t think I’d sell and build again just do to the headache of workers in the area . The lender thinks we’d get around 15-18k a month gross but I’d be hopeful to get closer to 12k average given current market conditions .

Just had our first baby and looking to simplify my life a little so taking the equity and doing something back in Georgia is tempting . Thank you all for any insight .

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John UnderwoodPro Member

Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes

3y

I'd list it and see if you can make close to a million in profit if your numbers are accurate.

It would take you many years to make this return on investment.

See this reply in the discussion

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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
3y
I'd list it and see if you can make close to a million in profit if your numbers are accurate.
It would take you many years to make this return on investment.
7 Reply
Sarah KensingerPro Member
Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
3y
Do accordingly to your goals...want to spend more time with your new baby and not worry about a STR out of state, sell the property. Want some cashflow as your family grows, then keep it.
[email protected]330-557-3021
1 Reply
Alexander Achim
OP
Dacula, GA · Member since 2015 · 8 posts · 12 votes
3y
Quote from @Sarah Kensinger:

Do accordingly to your goals...want to spend more time with your new baby and not worry about a STR out of state, sell the property. Want some cashflow as your family grows, then keep it.
originally our principal was supposed to be closer to 5-600k and loan was interest only so of course the rates kept climbing and it made the cash flow less attractive

0 Reply
Sarah KensingerPro Member
Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
3y
Quote from @Alexander Achim:

Quote from @Sarah Kensinger:

Do accordingly to your goals...want to spend more time with your new baby and not worry about a STR out of state, sell the property. Want some cashflow as your family grows, then keep it.
originally our principal was supposed to be closer to 5-600k and loan was interest only so of course the rates kept climbing and it made the cash flow less attractive

I know...it's ridiculous right now!
[email protected]330-557-3021
0 Reply
John Carbone
Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
3y
Quote from @Alexander Achim:

Hello BP, I’ve got a question I’m hoping some seasoned investors can help or give their insight . I just finished a pool cabin 4 bedroom 6 bathrooms . 4200 sq feet in gatlinburg with theatre , sauna , steam shower arcade indoor heated pool. Appraisal. Location is great , view is good and overall I like the cabin but the situation is :
950k mortgage at 8% . So mortgage sits around 7k without taxes .Just got our appraisal and looking at comps realistically 800-900 equity currently . We did the build ourselves so we saved alot of money but I don’t think I’d sell and build again just do to the headache of workers in the area . The lender thinks we’d get around 15-18k a month gross but I’d be hopeful to get closer to 12k average given current market conditions .

Just had our first baby and looking to simplify my life a little so taking the equity and doing something back in Georgia is tempting . Thank you all for any insight .

I would try to sell asap
1 Reply
Alexander Achim
OP
Dacula, GA · Member since 2015 · 8 posts · 12 votes
3y
Quote from @John Carbone:

Quote from @Alexander Achim:

Hello BP, I’ve got a question I’m hoping some seasoned investors can help or give their insight . I just finished a pool cabin 4 bedroom 6 bathrooms . 4200 sq feet in gatlinburg with theatre , sauna , steam shower arcade indoor heated pool. Appraisal. Location is great , view is good and overall I like the cabin but the situation is :
950k mortgage at 8% . So mortgage sits around 7k without taxes .Just got our appraisal and looking at comps realistically 800-900 equity currently . We did the build ourselves so we saved alot of money but I don’t think I’d sell and build again just do to the headache of workers in the area . The lender thinks we’d get around 15-18k a month gross but I’d be hopeful to get closer to 12k average given current market conditions .

Just had our first baby and looking to simplify my life a little so taking the equity and doing something back in Georgia is tempting . Thank you all for any insight .

I would try to sell asap
That’s what I’m leaning towards but it’s helpful to have experienced voices chime in. Thank you
0 Reply
Kyle Smith
New to Real Estate · Member since 2020 · 220 posts · 107 votes
3y
I have a 3 bedroom pool cabin and I can tell you a cabin that size will easily do $200k gross/year. I wouldn’t sell. The view is key to maximizing that return, but a cabin that size with those amenities will kill it, recession or not IMO. I’m about to build another one. Maybe I’m a crazy person. LOL
0 Reply
Alexander Achim
OP
Dacula, GA · Member since 2015 · 8 posts · 12 votes
3y
Quote from @Kyle Smith:

I have a 3 bedroom pool cabin and I can tell you a cabin that size will easily do $200k gross/year. I wouldn’t sell. The view is key to maximizing that return, but a cabin that size with those amenities will kill it, recession or not IMO. I’m about to build another one. Maybe I’m a crazy person. LOL

It takes a little bit of crazy to do anything up here 😅
1 Reply
Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
This would be a tough call for me. I would probably go with selling it, but if you could hit your monthly goal, it would be a money maker for a good long time which is what I would seriously look at.

Tough call@Alexander Achim
0 Reply
Ryan MoyerBusiness Member
Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 991 posts · 1k+ votes
3y
How good of a view are we talking about?
There's a couple of 4br pool cabins with 4/10 views (but very close to town) listed for around $1M right now. And a 6br pool cabin listed for $1.1M.
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2 Reply
John Carbone
Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
3y
Quote from @Alexander Achim:

Hello BP, I’ve got a question I’m hoping some seasoned investors can help or give their insight . I just finished a pool cabin 4 bedroom 6 bathrooms . 4200 sq feet in gatlinburg with theatre , sauna , steam shower arcade indoor heated pool. Appraisal. Location is great , view is good and overall I like the cabin but the situation is :
950k mortgage at 8% . So mortgage sits around 7k without taxes .Just got our appraisal and looking at comps realistically 800-900 equity currently . We did the build ourselves so we saved alot of money but I don’t think I’d sell and build again just do to the headache of workers in the area . The lender thinks we’d get around 15-18k a month gross but I’d be hopeful to get closer to 12k average given current market conditions .

Just had our first baby and looking to simplify my life a little so taking the equity and doing something back in Georgia is tempting . Thank you all for any insight .

Here is what I am wondering. If you have 800k in equity why would someone pay 1.8m for a cabin that is “projected” to do 15k-18k? The buyers mortgage will be 14k plus probably 2-3k in other expenses on a property that size.
And if we are talking a cash buyer that person can earn 90k a year profit by investing in treasuries.
4 Reply
Alexander Achim
OP
Dacula, GA · Member since 2015 · 8 posts · 12 votes
3y
Quote from @Ryan Moyer:

How good of a view are we talking about?
There's a couple of 4br pool cabins with 4/10 views (but very close to town) listed for around $1M right now. And a 6br pool cabin listed for $1.1M.

I’m near west gate . 5 min to downtown gatlinburg and like 10 to Dollywood . These aren’t pro photos yet and I’m not done staging

6 Reply
Brian G.
Rental Property Investor · Los Angeles, CA · Member since 2013 · 1k+ posts · 1k+ votes
3y
@Alexander Achim it really depends on your longterm goals imo and doing whatever gets you closer to those. One thing you should do is figure out how much money you would make if selling and then figure out how much income you would expect to make yearly if you hold. Would it take you 5 years operating the property as a STR to equal your profit if you sold? 7 years? 10 years? Keep in mind STRs are a very active business with plenty of hassle factor. Only you can determine what's most important to you. Good luck on your decision!
0 Reply
Luke CarlPro Member
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
3y
I would need to see more pics but from what I see there I don’t think I’d call that a “view”

I agree with @Sarah Kensinger it would depend on your goals. You’ve basically got yourself a mini hotel there. If you’re already on the fence about doing it you may not get the results you need.

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1 Reply
Zach Edelman
Lender · New York, NY · Member since 2022 · 1k+ posts · 1k+ votes
3y
Why don't you list it and see what happens? Can always remove it from the market and refinance if you're not getting the results you want.
1 Reply
Brian Barch
Member since 2022 · 272 posts · 253 votes
3y
If all the numbers you stated are true, I would sell, like tomorrow.

my hunch is an investor won’t buy something for $1.8M that generates $12k/mo, but I could be wrong.
0 Reply
Richard Elvin
Investor · Cleveland, TN · Member since 2016 · 279 posts · 187 votes
3y
@Luke Carl Newbie with STR's here, so forgive what may be a dumb question. :)

Do you have an example of a great view? As a newbie I would have been easily sold that's a good view.
0 Reply
Sergei Gremeniuk
Bloomington, MN · Member since 2023 · 17 posts · 13 votes
3y
Quote from @Zach Edelman:

Why don't you list it and see what happens? Can always remove it from the market and refinance if you're not getting the results you want.

That. List it, have a proven record of cash flow and then sell in a year based off those numbers. Otherwise what you're telling the next buyer is you don't believe in the market.
0 Reply
Brooklyn McCarty
Investor · Member since 2022 · 1k+ posts · 754 votes
3y
All depends on what you want to get out of it & how long you plan to hold the property in the long run anyways. What’s your end game?
0 Reply
Levi Trentham
Member since 2023 · 3 posts · 5 votes
3y
Good job on all the amenities, that's what it takes to have a successful STR in this market. There is no harm in listing it and seeing what happens like mentioned previously, you could even start renting it out while having it on the market to get some cash flow going. October is historically an awesome rental month in the smokies so if you can get it up and running before then you'll likely generate really good revenue. A cabin like that will also do really well in the holiday season. I have a 5 bedroom pool cabin close to yours that has $15,841 on the books for October and still have 9 nights available to book so I'll likely finish higher than that. Not to mention my listing is fairly new, only has 8 reviews so I expect it to do better this time next year. I don't think you can go wrong either way!
0 Reply
Matt McGuirePro Member
Rental Property Investor · Montgomery, TX · Member since 2018 · 201 posts · 103 votes
3y
The best time to buy real estate is now and the best time to sell is never. I would hold on to it. If you don't need the cash flow, just hire a property manager to simplify and let the house build equity. That is a beautiful house in a great location. I think you will regret selling it. You can always refinance at some point.
0 Reply
Alexander Achim
OP
Dacula, GA · Member since 2015 · 8 posts · 12 votes
3y
Quote from @Brooklyn McCarty:

All depends on what you want to get out of it & how long you plan to hold the property in the long run anyways. What’s your end game?
End game for me really was to have some “passive” income . Though with these STR it’s not quite passive . My biggest concern is an unpredictable downturn and even though I’ve got reserves setup to ride it out for a while , if things don’t turn around after a while the mortgage is quite alot to bear in my own.

lot of good insight here though .
0 Reply
Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
So here are a couple of shots where I think the view is great.

This is a place in CO we were looking at, but couldn't really see it cashflow

This is the view from our main deck at our lake house.

I think the view at @Alexander Achim's house is OK. Not the best but certainly not the worst.
2 Reply
JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
3y
Quote from @Michael Baum:

So here are a couple of shots where I think the view is great.

This is a place in CO we were looking at, but couldn't really see it cashflow

This is the view from our main deck at our lake house.

I think the view at @Alexander Achim's house is OK. Not the best but certainly not the worst.

You have a good eye :D Those are great views. I wouldn't mind them as my own views (I have mountain views and lake views at my primary/vacation house) though the one in Colorado is for sure in BFE and probably so is the one on the lake.
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John Carbone
Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
3y
Quote from @Alexander Achim:

Quote from @Brooklyn McCarty:

All depends on what you want to get out of it & how long you plan to hold the property in the long run anyways. What’s your end game?
End game for me really was to have some “passive” income . Though with these STR it’s not quite passive . My biggest concern is an unpredictable downturn and even though I’ve got reserves setup to ride it out for a while , if things don’t turn around after a while the mortgage is quite alot to bear in my own.

lot of good insight here though .
List it for 1.8m and see if it sells. Appraisals are coming in higher now because they are still using last year sales. A lot of us in the smokies think we have more equity than we really do right now because appraisals are coming in strong. You still need to find someone that will sign on the dotted line for the appraisal price to capture the equity right now.
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