Investor · Thousand Oaks, CA · Member since 2019 · 31 posts · 28 votes
Hi
We are in the beginning stages of looking for a STR in the Sevierville area. I would love to hear from those of you that have invested there about what were the most important features to look for in choosing a property. Now that you own your property, what are some of the things that have come up for guests inquiring about renting from you?
Is view important? Number of master bedrooms? Hot tub? Etc.
We just want to make sure we are considering what the guests might be looking for when they go to rent a vacation property in this area.
Hi @Lauren Johnson! @Avery Carl and @Luke Carl are da bomb and will definitely get you hooked up. I've bought three cabins in Sevierville with Avery representing me. Here's what I've learned in the last 15+ months of owning there:
- Stick within 10-15 minutes of the main drag in Pigeon Forge/Gatlinburg (Parkway)
- Well-paved roads with are easy to travel are ideal - beware the single-lane wooded gravel road!
- View is a bonus but isn't as important as you might think. You pay more of a premium for a view in the purchase price than you'll get on the rental side, it seems
- Let your target demographic determine your number of bedrooms. Do you want to host couples, or families, or large groups? They'll all rent well, and your ROI will be roughly the same, but they have different travel patterns and needs. Figure out what you're most comfortable with and let that drive the size of your purchase.
- A hot tub is mandatory
- A fire place is mandatory
- Invest in decent furniture. Whatever the cabin comes with might be garbage - take the time to learn if it is, and spend the money to replace it if necessary.
- There's no such thing as a "turn-key" cabin unless it's a new build. Be prepared for some repairs, though they don't have to be major. It's worth it to replace the old HVAC/water heater/whatever now vs. having to do it while guests are in there unhappy that it broke on their vacation.
Okay that's enough for now! Good luck on your search, you're in good hands!
Hi @Lauren Johnson! @Avery Carl and @Luke Carl are da bomb and will definitely get you hooked up. I've bought three cabins in Sevierville with Avery representing me. Here's what I've learned in the last 15+ months of owning there:
- Stick within 10-15 minutes of the main drag in Pigeon Forge/Gatlinburg (Parkway)
- Well-paved roads with are easy to travel are ideal - beware the single-lane wooded gravel road!
- View is a bonus but isn't as important as you might think. You pay more of a premium for a view in the purchase price than you'll get on the rental side, it seems
- Let your target demographic determine your number of bedrooms. Do you want to host couples, or families, or large groups? They'll all rent well, and your ROI will be roughly the same, but they have different travel patterns and needs. Figure out what you're most comfortable with and let that drive the size of your purchase.
- A hot tub is mandatory
- A fire place is mandatory
- Invest in decent furniture. Whatever the cabin comes with might be garbage - take the time to learn if it is, and spend the money to replace it if necessary.
- There's no such thing as a "turn-key" cabin unless it's a new build. Be prepared for some repairs, though they don't have to be major. It's worth it to replace the old HVAC/water heater/whatever now vs. having to do it while guests are in there unhappy that it broke on their vacation.
Okay that's enough for now! Good luck on your search, you're in good hands!
hello @Lauren Johnson! In the 1/3 year we've had our STR, these things seem to be the most important to our guests:
1. location (folks appreciate being close to Pigeon Forge AND Gatlinburg)
2. cabin-feel (they like the log cabin aesthetic and prefer that over traditional construction materials and styles)
3. hot tub is a must.
4. stocked kitchen... many folks just eat out, but quite a few like to buy groceries and cook, so having the right pots, pans, utensils and spices has won some hearts and minds.
5. view... the better the view the more they'll appreciate the time they spend on the property. whether that's just trees, or a ridge line, or the full majesty of a mountain range.
Good luck in your search! @Avery Carl is a great guide so you're in good hands there.
Sevierville is an awesome place to invest. WE have 5 cabins in different areas. Still seeking that elusive townhome in Gatlinburg.
What I have found to be true is VIEW #1 for resale price.
I do have 2 honeymoon cabins and they have no view but stay rented because of privacy. But Sale price was lower. I LOVE THEM.
Be sure to verify HOA fees and what exactly is included with those. Shared roads, shared wells. Our second cabin we spent 2500 the first year fixing the shared well.
I have learned that Real Estate from CA is much more strict with disclosures and verified home information requirements then in TN. So be sure to check all the information Yourself going in first.
Best of luck... our community of investors keeps growing!!!
Hi @Lauren Johnson! @Avery Carl and @Luke Carl are da bomb and will definitely get you hooked up. I've bought three cabins in Sevierville with Avery representing me. Here's what I've learned in the last 15+ months of owning there:
- Stick within 10-15 minutes of the main drag in Pigeon Forge/Gatlinburg (Parkway)
- Well-paved roads with are easy to travel are ideal - beware the single-lane wooded gravel road!
- View is a bonus but isn't as important as you might think. You pay more of a premium for a view in the purchase price than you'll get on the rental side, it seems
- Let your target demographic determine your number of bedrooms. Do you want to host couples, or families, or large groups? They'll all rent well, and your ROI will be roughly the same, but they have different travel patterns and needs. Figure out what you're most comfortable with and let that drive the size of your purchase.
- A hot tub is mandatory
- A fire place is mandatory
- Invest in decent furniture. Whatever the cabin comes with might be garbage - take the time to learn if it is, and spend the money to replace it if necessary.
- There's no such thing as a "turn-key" cabin unless it's a new build. Be prepared for some repairs, though they don't have to be major. It's worth it to replace the old HVAC/water heater/whatever now vs. having to do it while guests are in there unhappy that it broke on their vacation.
Okay that's enough for now! Good luck on your search, you're in good hands!
@Julie McCoy @Richard Lee & everyone else: curious your opinion about optimal home size (# bedrooms, # bathrooms, sq ft, etc) to purchase in East Tennessee (Gatlinburg, Pigeon Forge, Sevier County, etc)
@Eric P. whatever size you want my man! Depends greatly on your budget and goals. Keep in mind 10% down is generally not an issue. Would you rather have 5 one bedrooms or one 5 bedroom? Totally up to you. They’ll all maintain 80% or better occupancy.
Why don’t you give Avery a call she sold every single person on this thread all of their cabins.
@Eric P. Listen to ^^^ the Reverend @Luke Carl. He'll tell you to keep your wheels spinning and your women grinning, even though he's unsure about a P-51 Mustang.
@Luke Carl When you say 10% down I assume you are talking about mortgage down payment. Is that true? if so at what rate and terms? Is it a local bank or a special loan for STR properties.
@Ray Thorsen second home loan. Conventional. Lowest rates in the biz. If you qualify. Google “second home rider” property must be 65 miles from your primary can’t put a lease on it etc.
I am not a licensed loan person. I just read a LOT of books.
@Ray Thorsen what @Luke Carl said. Truly depends on what you want out of it - your ROI is going to be similar regardless of size, but think about what demographics you want to cater to, how many properties you want to manage, etc.
Not to throw a wrench in things, but I would proceed with caution regarding 10% down. First, it makes it so you are highly leveraged. If the cash flow margin isn't a large sum now make sure to keep ample reserves for future downturns.
Second, a standard Fannie/Freddie second home rider (where you can do 10% down and receive a lower interest rate in comparison to an investment loan) states the following which must be signed and is attached at the end of the deed of trust:
"Occupancy. Borrow shall occupy, and shall only use, the Property as Borrower's second home. Borrower shall keep the Property available for Borrower's exclusive use and enjoyment at all times, and shall not subject the Property to any timesharing or other shared ownership arrangement or to any rental pool or agreement that requires Borrower either to rent the Property or give a management firm or any other person control over the occupancy or use of the Property:"
"Borrower's Loan Application. Borrower shall be in default if, during the Loan application process, Borrower or any persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materially false, misleading, or inaccurate statements to Lender (or failed to provide Lender with material information) in connection with the Loan. Material representations include, but are not limited to, representations concerning Borrower's occupancy of the Property as Borrower's second home."
So I would proceed with caution putting 10% down. Especially with the current market conditions. Granted, I have never seen a lender in our area call the note on a borrower when they are using the property as an overnight rental cabin when the loan was as a "second home". As long as the borrower is paying the loan it doesn't seem to be worth the trouble for banks to track and enforce. However, it really is bordering on mortgage fraud in my opinion. Especially with multiple properties in the same market designated as "second homes". Is it "likely" you'll be caught? I'd say no. But if it was ever enforced I sure wouldn't want to be in that position.
The interest rates are typically 75 to 100 basis points higher for an investment loan for an overnight rental cabin in comparison to a second home loans. So if people are fraudulently misrepresenting the use of the property there very well may come a day the banks do actually care.
As far as @Lauren Johnson's original questions. Yes, a view is definitely one of the features/amenities that creates a desirable rental and will have a positive impact on the gross rental income. It is a timeless feature that will always be popular. It isn't necessary for a successful rental, but it sure does set a good foundation and enables a property to be on the path to being a successful investment.
As far as number of master bedrooms that's a difficult question. You can be successful with any bedroom size or category in our market. It is more dependent on the individual cabin itself. There are numerous cabins in each bedroom category that are both successes and failures. I haven't seen any data directly relating to a certain bedroom count being a better ROI. There are more one and two bedroom cabins available than larger cabins. But the market demand for that size is also higher.
Hot tubs and pool tables (or other game related tables such as foosball, air hockey, or arcades) are a "base" amenity for our market and nearly every single cabin will have them.
There are literally dozens more factors that influence an overnight rental cabin in Sevier County. Please feel free to reach out if you have any questions!
Thanks for all of your input everyone! We are under contract on a property with @Avery Carl. Thanks @Luke Carl for all of your information. I know I will be calling you a lot! Also, thanks @Julie McCoy and @Rhonda Blue for your warm welcome and all the info. This is a great group of people and I look forward to this next adventure!
@Lauren Johnson Congratulations on your purchase. We bought a 2/2 in Oct from @Avery Carl and like @Julie McCoy said, prepare to upgrade what looks like a turn-key. We have privacy like @Rhonda Blue mentions and our guests do love that, but most mention the general mountain views, the hot-tub and its access to the tourist stuff and the SMNP. @Luke Carl said there is a market large enough for the variety of demands guests seek and you're going to have a good ROI no matter what IF you buy a good deal and if you self-manage with great hospitality.
I'm wondering about cleaning costs on a 2/2. We have quotes ranging from $40 - $85. What are those of you hosting pay?
@Jay Fradd she said she’s already got an agent dude no reason to mention “reaching out”
@Lauren Johnson every single person on this forum that owns a cabin except the incomparable @Chuck Kramer used the same agent as you. You’re in great hands just trust her.
@Jay Fradd this is a topic for a different thread but I see nothing wrong with short terming a second home and I have been doing so for years. Putting a lease on it is probably not a good idea. No reason not to do 10% unless the numbers don’t work
@Jay Fradd If you look at some of my older posts, you'll see the mention of having 3M talent in this segment of the real estate world. What's 3M talent, you ask?
Seems like your totally covered then by .... Your agent.... they should be able to answer your questions! Especially if other Bigger Pocket responders are not allowed to respond to your requests for information.
That being said. This is an open forum and Isn't owned by one agent over another. The main post didn't show that Lauren had another agent and even if she does maybe as an investor she has concerns. This is an open forum.
There are many many agents in the Sevierville, Gatlinburg, Pigeon Forge area. WHO live here and work here locally. Tons of investors also.... and even though most do not participate in posts because of aggressive personalities... There are great investments to be had here! Let's all try to Spread the love for E TN investing!!
Like the OP, we are also considering a cabin in this area. Does anyone recommend a STR property manager or can this be accomplished with technology and a more partner relationship with a cleaning crew? Where are people's cap rates coming in and what are people paying for a property manager?
Best advice about managing,. Is not to use a company like evolve or vacasa, because they have very mixed reviews and often only do the easy online stuff not the on the ground stuff.
also using a property management company can be expensive and they're not always good at what they do and it may even be hard to find them.
In my opinion, the best of the have short-term rentals not far for you, because they're a lot of issues in the beginning you cannot imagine. It's a lot easier to take care of especially in the beginning such as maintenance things you did not notice.
In either case, I think the best thing to do is to use property management system such as guesty or ownerreservations.com or others like that with good reviews.
there's a ton of things you should learn before deciding to be a short-term rental owner. Zoning, code, channels, insurance, marketing, and many other things. People make it sound easy, it is the opposite. The competition is a lot more fierce than you can possibly imagine. Don't trust the books