Vacation Rentals in the Southeast

14 Replies

After researching the variety of real estate investment options, my wife and I would like to purchase vacation rentals.  We are aware of the risks, but feel that the investment better suits are current needs.

We currently live in Raleigh and have been working with real estate agents in Asheville, Raleigh, and Savannah.  It's been difficult to navigate restrictions and recent legislation.  

Ultimately, we would love to spend $200,000-$300,000 to purchase a condo or apartment.  I am looking for location suggestions and any other advice people are willing to provide.

Those are all up-and-coming markets although the Raleigh-Durham area has already seen dramatic price increases. Have you considered East Tennessee, such as the Gatlinburg-Pigeon Forge area? It has high visitor counts, is almost recession proof (area saw flat or increased traffic during the recession), and while the market has risen you can still  get nice properties with that budget. Plus, it is a year-round area (though Jan/Feb are a little slower than the rest).

Asheville is roughly the same but on the NC side of the Great Smoky Mountains. Attractions are fewer, with Biltmore being the biggest draw, although the Sierra Nevada and Anheuser-Buscher breweries do ok also.

@Chuck Kramer thanks so much for the suggestions.  I will certainly take a look at some properties in the eastern part of Tennessee.  One of the reasons we were targeting cities was we would prefer a condo or apartment.  We have three small children, and the less capital expenditures and maintenance to consider, the better.  Do you feel that there are still condo/apartment options in the Gatlinburg area?

That makes perfect sense. You can find condos and such in E Tenn (Gatlinburg/Pigeon Forge) as well. They tend to be in nice areas with good views and rent pretty well. Just be sure to ask questions about renting them out. There are a few that require you to use their own rental services as opposed to doing your own AirBnB/VRBO rentals; avoid those. 

Many elderly visitors and families with young kids like condos for the pools, flat parking, and easier access. I am guessing you are looking at a 2 or 3 bedroom model, which there are some on the market. Many also have fireplaces too.

Do you have a particular go to strategy for looking for properties in the E. Tennessee area?  Being new I am extremely aware that I am currently monopolizing a lot of real estate agents time (around the southeast).  I would love to do as much legwork as I can, before approaching agents and brokers.  

I have 5 cabins that I self manage in the Gatlinburg Pigeon Forge market and there's zero maintenance that I have to handle. The lawn guy comes every two weeks and does the lawn and I never think about it (if there even is a lawn which most of them don't have because they're on a mountain). If a toilet flapper breaks my handyman fixes it within an hour. When you're managing a vacation rental from afar the maintenance is really no different than a condo. Only I don't have an HOA or neighbors to deal with. Most folks in our market want to stay in a cabin in the woods. And full disclosure you couldn't pay me to stay in a condo but that's personal preference and I completely understand your views are not the same and can respect that.

There are plenty of condos that rent well!! We're 85% occupied on this side of the hill year round and the returns are very nice. And there are little to no restrictions. That paired with the fact that we get 13 million tourist per year makes this area the best option for vacation rentals in the country (that's my opinion) 

Although I must point out, if you're not willing to self manage the returns will be similar or less than a LTR. Self managing will put your  numbers very high but not everyone has the guts or the patience. Including myself - but I do it anyway lol. 

Happy to to hop on a phone call and teach you everything I know. One hour on the phone with me = 80 hours on the phone with VRBO

@David Gaudet My strategy has been pretty simple for the E TN area; I check the MLS every night about 6pm to catch new listings (most seem to go up at the end of the business day), and I have befriended some local agents who keep me informed of off-market and upcoming listings they hear about. The last 2 that I bought were a 5 BDRM SFH for $278K and another for 315K. I put offers in within minutes of going live and presented my financial prequalifications. Offers were accepted within 12 hours in both cases.

You can also find some older listings that are getting a bit "stale" at around 100+ days. At that point, and given the time of year, some owners may be willing to accept substantially less. Before offering, look up the property in the local tax records to see what the owners paid for it and when. After all, you aren't going to get someone to sell it for a loss (probably) so need to know that as well. My 2nd house was listed for $585K in June 2017. I offered $500K in September and it was accepted. They were using a local cabin company and had a really weak looking holiday season so were going to have to carry it for a few months. I noticed they paid $385K for it in 2012, estimated their mortgage payment, and made an offer that would put money in the pocket plus alleviate #10-12K of mortgage payments during THEIR slow season. I then had it listed 1 day after closing and did not have an empty day from Nov 12 to Jan 23.

@Lucas Carl 

I'm assuming you're based in Nashville and self manage from there. That's impressive... I work for a STR property management company here in Nashville. The amount of times I have to make last minute trips to Nashville because of broken A/C units or my favorite, cobwebs on the porch that the guests don't feel comfortable knocking them down is mind boggling. What do you do if you receive a message at midnight expressing that the A/C went out it and is too hot and muggy for them to sleep? Do you send someone out ASAP or give them a partial refund?

I remember reading another one of your posts a few months back explaining why you chose the Gatlinburg/Pigeon Forge area, because the economy  in that area revolves around tourism so you know you won't be royally screwed over by regulations or the recession. That being said, do you see yourself investing anywhere else in Tennessee, Nashville or Knoxville perhaps? 

Once I got in to the STR business I knew I wanted to stay here, not only because it's a gold mine but I think the idea of owning Vacation Rentals is rad!

While I would love to buy my first STR in the Pigeon Forge area it is too rich for my blood at this point in my life. I have been thinking of buying a property in Clarksville and marketing it more as a corporate or military rental and if that didn't pan out I would LTR individual rooms to APSU students. Would you think this is a solid idea or more of a "wouldn't touch it with a ten-foot pole?"

Originally posted by @Waylen Herdman :

@Lucas Carl 

I'm assuming you're based in Nashville and self manage from there. That's impressive... I work for a STR property management company here in Nashville. The amount of times I have to make last minute trips to Nashville because of broken A/C units or my favorite, cobwebs on the porch that the guests don't feel comfortable knocking them down is mind boggling. What do you do if you receive a message at midnight expressing that the A/C went out it and is too hot and muggy for them to sleep? Do you send someone out ASAP or give them a partial refund?

If an AC goes out in the middle of the night I call my middle of the night AC guy and get it fixed within the hour and my or may not offer a refund depending on the situation and that particular guest. Are they throwing a fit or are they happy I had it fixed so quick? Either way I'll give them something. 

I remember reading another one of your posts a few months back explaining why you chose the Gatlinburg/Pigeon Forge area, because the economy  in that area revolves around tourism so you know you won't be royally screwed over by regulations or the recession. That being said, do you see yourself investing anywhere else in Tennessee, Nashville or Knoxville perhaps? 

I have properties in Nashville and Chattanooga on top of my PF Gatlinburg properties. I do not do short term in these markets and have no interest in it. Self managing a VR is not for everyone. I find, for me, it's not worth it financially to not self manage. There's too many moving parts. With a property manager you're likely to make the same net income as a decent SFH LTR in a different market so why not just go after the SFH LTR? I use the heavy cash flow to support my business as a whole and contribute to down payments on LTRs. If I were to get a 6th VR I'd feel I'd need a 20th VR and I'd need to start hiring lots of folks to avoid using a PM. And that's just not the direction I see things going for me right now. 

The beauty of real estate is that there are unlimited options as to how you run your business and one of these options is going to work for the unlimited number of different types of investors!  I should also note my business model changes over time with each property I purchase and could change as soon as tomorrow. Constant evolution and education is the key! 

You said you're working FOR a PM. Which means it is probably your JOB to run to nashville and get paid to do these jobs or oversee them. I pay people to do things like that for me. Just as the owner of the properties you're helping out is paying you. Only my people work for me directly. And it gets easier to find people to work for you the more properties you own.

Once I got in to the STR business I knew I wanted to stay here, not only because it's a gold mine but I think the idea of owning Vacation Rentals is rad!

Again.... it's not for everyone. No one asks me questions about my LTRs because there are thousands of people that are better at it and have more of them than I do. Everyone wants to know how I'm making it in VRS. 

While I would love to buy my first STR in the Pigeon Forge area it is too rich for my blood at this point in my life. 

You said you're in Nahsville. Purchase prices are way higher in Nashville than they are in the Pigeon Forge Gatlinburg Wears Valley market. 


I have been thinking of buying a property in Clarksville and marketing it more as a corporate or military rental and if that didn't pan out I would LTR individual rooms to APSU students. Would you think this is a solid idea or more of a "wouldn't touch it with a ten-foot pole?"



I looked heavily into the Clarksville market. It wasn't for me. But that doesn't mean it can't be for you!!! It sounds like you're on the young side or just starting out. Keep saving up your pennies for a down payment and read one non fiction book per week and you'll be very wealthy. 
Best of luck I hope I helped sorry about the formatting it wouldn't do what I wanted. 

@Lucas Carl Ryan here from the Atlanta, Ga area. Being in Nashville, have you looked much into the Blueridge area? Area sees high traffic as well and has good VR's( I seem to notice).  

As I'm sure you're well aware at this point, Asheville city limits is mostly a no-go when it comes to STR. You'll want to look outside the city limits to avoid their restrictions.

Some areas of note: Marshall, Black Mountain, Hendersonville, Brevard, Connestee Falls, Canton, and Mills River. Lake Toxaway, Cashiers, and Sapphire are nice as well.

There are some "condotel" listings in Asheville, though that is very limited.

You said you already had someone working with you in Asheville area. If you ever need someone else in this area let me know.