Condo Caution in the Smokies

[Collin Hays]

I had an inquiry today from someone interested in buying a condominium in the Pigeon Forge area to rent out. I am going to put this as bluntly as possible:  Condominiums in the Smokies are not good investments. They are a commodity, and owners are competing directly against hotels in this space, so rents are ultra low. And because there are so many, demand is ultra low, except in the busiest of months.  

There is almost no scenario where a condo would ever positive cash flow while servicing debt, and very little positive cash flow with no debt.

If your budget only allows for a condo, find a better place to put your money to work.  

[Andrew Steffens]

This is true in most markets. Beach condos can perform well but it is more competitive than SFR. The issue I see most is the cashflow gets crushed by HOA fees and the added headaches of having them tweaking rules etc. It is not impossible here (have a great gulf front penthouse being listed this week), but generally speaking it is not the way to go in most markets I have ever looked at.