Startup costs for STR cabin in Gatlinburg

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Startup costs for STR cabin in Gatlinburg

James Rowe
Cleveland, TN · Member since 2019 · 6 posts · 4 votes

I'm working on my expenses spreadsheet for purchasing my first STR cabin near Gatlinburg. I currently have:

1. $175 Smart lock keypad for remote management of door lock on Amazon

2. Furnishings that may not already be present

3. Utilities start-up fees

4. Initial cleaning fee if needed (may do it myself if possible)

5. Initial maintenance costs to get the place ready to rent (if not ready to go already)

6. Listing/marketing upfront fees (not sure if there are any)?

I don’t know what I don’t know here so please feel free to help me out or tell me if I’m way off track. How much are you guys seeing these things cost? What would you plan for?

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Luke CarlPro Member
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
6y

Well. I'm a guy that does not like spread sheets. They just don't work for me. My brain says "does it make money? Yes? Buy it.No? Don't buy it" But I've got several in your market so I'll do my best to answer your questions! 

Originally posted by @James Rowe:

I'm working on my expenses spreadsheet for purchasing my first STR cabin near Gatlinburg. I currently have:

1. $175 Smart lock keypad for remote management of door lock on Amazon

Could be anywhere from $100 to 300 

2. Furnishings that may not already be present

I've spent anywhere from $0 to $8000 depends on YOU, how much Chip and Joanna you watch, and depends on the property. 

3. Utilities start-up fees

Sevier County Electric will charge you a deposit. It will be 2x the highest electric bill in the past two years. The water will come from a well in the ground. That well could cost you $0 or you may need to replace expensive filters the day after you close. No way to tell. 

4. Initial cleaning fee if needed (may do it myself if possible)

Could be $0 Could be $2500 could be 10k. Depends on what sheets you buy and which cleaner you choose. If you plan to clean this thing yourself you'll never make it. Do you want to be a real estate investor or do you want to be a housekeeper? "Hire fast Fire faster"     Although I assume you mean how much to clean the property the first time? That's not enough to worry about. Maybe $300-400 to clean an empty house. 

5. Initial maintenance costs to get the place ready to rent (if not ready to go already)

There is literally NO way to predict this. 

6. Listing/marketing upfront fees (not sure if there are any)?

Airbnb/VRBO do your marketing for you. 

I don’t know what I don’t know here so please feel free to help me out or tell me if I’m way off track. How much are you guys seeing these things cost? What would you plan for?

As with any home you buy, it's nearly impossible to predict what will break and or when. My advice would be to assess your risk level (I personally love risk. Oh everything terrible can happen in one day? Bring it on). 

Figure you've got the following functions of the house (assuming you've never bought a house before) decide which functions of the house you're worried about breaking and how soon and accommodate for such things. Figure this house is 2-5 bedrooms and in sevier county and is functioning as a short term rental, as is everything in sevier county. 

Roof: 7-8k
HVAC: 4-5k
Well Filters: $0 -3k
Stain: 4-5k
Furniture (Entire house): 8-10k
Appliances (stove/fridge/dishwasher): 3K

I think I've covered all the big ones. 

My business model has NEVER been to worry about such issues. I've always tried to focus every dollar on the next purchase. I now have 24 doors and a freight train of momentum. I've got two new roofs going as we speak. As well as 3 full rehabs. And the 24 door funnel plays for all of these roofs and rehabs and the ball just keeps on rolling into one giant snowman. Life is good. 

One day I'll be Paul Sandhu when I grow up. 

Podcast Guest on Show From Surviving on $30/Day to 30+ Properties Thanks to Blue-Collar Skills
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  • Luke CarlPro Member
    Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
    6y

    Well. I'm a guy that does not like spread sheets. They just don't work for me. My brain says "does it make money? Yes? Buy it.No? Don't buy it" But I've got several in your market so I'll do my best to answer your questions! 

    Originally posted by @James Rowe:

    I'm working on my expenses spreadsheet for purchasing my first STR cabin near Gatlinburg. I currently have:

    1. $175 Smart lock keypad for remote management of door lock on Amazon

    Could be anywhere from $100 to 300 

    2. Furnishings that may not already be present

    I've spent anywhere from $0 to $8000 depends on YOU, how much Chip and Joanna you watch, and depends on the property. 

    3. Utilities start-up fees

    Sevier County Electric will charge you a deposit. It will be 2x the highest electric bill in the past two years. The water will come from a well in the ground. That well could cost you $0 or you may need to replace expensive filters the day after you close. No way to tell. 

    4. Initial cleaning fee if needed (may do it myself if possible)

    Could be $0 Could be $2500 could be 10k. Depends on what sheets you buy and which cleaner you choose. If you plan to clean this thing yourself you'll never make it. Do you want to be a real estate investor or do you want to be a housekeeper? "Hire fast Fire faster"     Although I assume you mean how much to clean the property the first time? That's not enough to worry about. Maybe $300-400 to clean an empty house. 

    5. Initial maintenance costs to get the place ready to rent (if not ready to go already)

    There is literally NO way to predict this. 

    6. Listing/marketing upfront fees (not sure if there are any)?

    Airbnb/VRBO do your marketing for you. 

    I don’t know what I don’t know here so please feel free to help me out or tell me if I’m way off track. How much are you guys seeing these things cost? What would you plan for?

    As with any home you buy, it's nearly impossible to predict what will break and or when. My advice would be to assess your risk level (I personally love risk. Oh everything terrible can happen in one day? Bring it on). 

    Figure you've got the following functions of the house (assuming you've never bought a house before) decide which functions of the house you're worried about breaking and how soon and accommodate for such things. Figure this house is 2-5 bedrooms and in sevier county and is functioning as a short term rental, as is everything in sevier county. 

    Roof: 7-8k
    HVAC: 4-5k
    Well Filters: $0 -3k
    Stain: 4-5k
    Furniture (Entire house): 8-10k
    Appliances (stove/fridge/dishwasher): 3K

    I think I've covered all the big ones. 

    My business model has NEVER been to worry about such issues. I've always tried to focus every dollar on the next purchase. I now have 24 doors and a freight train of momentum. I've got two new roofs going as we speak. As well as 3 full rehabs. And the 24 door funnel plays for all of these roofs and rehabs and the ball just keeps on rolling into one giant snowman. Life is good. 

    One day I'll be Paul Sandhu when I grow up. 

    Podcast Guest on Show From Surviving on $30/Day to 30+ Properties Thanks to Blue-Collar Skills
    7Reply
  • Ken Boone
    Investor · Greenville, SC · Member since 2015 · 1k+ posts · 1k+ votes
    6y

    I have 3 STRs in the Pigeon Forge market.  1 was new construction and 2 were existing cabins when I purchased them.  The average startup costs for me was in the 15k range.  I pretty much tell my friends expect 12 to 15k in getting the cabin to where you want it for rentals.  Once you take over the cabin there will be other unexpected items you will need to purchase no matter if the cabin is new or old.  I think my friend didn't believe me until he got his cabin.  He does now! ;)  Of course this all depends on what you put in to your cabins.  You could come in less and you might come in more.  Anyway at this point 15k is my startup budget.  I plan for that number.  These costs will vary depending on the size of the cabin as well.  I have 2 two bedroom pool cabins and then the other is a 3 bedroom with an amazing mtn view.  If it is new construction the number is going to depend on the builder.   The builders up there are definitely not equal although they will all claim their cabins are all "rental ready".  Some provide all of the outdoor furniture and some do now.  Think about a 3 level cabin with 3 decks.  Need to put stuff on it.   Even the builder doesn't you need to  and the costs can vary greatly here depending on if you buy wood furniture or poly furniture.  Lots of variables depending on how you want to set it up.  

    I'm sure there will be other opinions on it but I hope this helps.

    3Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    6y

    It really depends on how turnkey the property is and what you want to change. Does this property come furnished? If so are you ok with the furnishings at least to get started?

    you need little things like coffee pot, iron/ironing board, can opener, corkscrew. The list just goes on and on. You need a good inventory of what you have to know what you may need.

    0Reply
  • James Rowe
    OP
    Cleveland, TN · Member since 2019 · 6 posts · 4 votes
    6y

    @Lucas Carl thanks for the info, just trying to have a rough idea of what kind of cash I’ll need to get going. I don’t have much capital laying around and I’ll most likely be working with a partner so I’d like to have a good ball park figure of what is needed to get off the ground. I know a lot will be dependent on the deal. I’m trying to learn what is commonly needed upfront for most cabins in general, aside from lending costs.

    0Reply
  • Paul Sandhu
    Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    6y

    It's been my thought that the most appropriate luxury for a vacation home in Gatlinburg is a Gatlin gun.  Mount it on the back porch and have a shooting range if there is enough acreage.  You can use old cars, appliances, mannequins, furniture, etc.  

    The cost for a Gatlin gun is probably $30-$50k.  Make your tenants provide their own ammo.  Most Gatlin guns are chambered for a centerfire rifle cartridge, and that's probably overkill for the backyard.  If you could get a .22 mini-Gatlin gun that would be perfect.  You could even mount it on the back of a 4x4 and do driving/shooting tours.

    1Reply
  • Julie McCoy
    Real Estate Agent · Sevierville, TN · Member since 2015 · 1k+ posts · 1k+ votes
    6y

    @James Rowe I've probably spent about $5-15k on each cabin after close.  First one was most expensive, needed new air compressor, new stain, and all new furniture, ~$15k (1BR + loft).  Next one I replaced the HVAC, the kitchen appliances, a little furniture.  Probably just under $10k.  Third one I replaced the roof but didn't do much else.  $6k  Currently working on a fixer that will probably run about $15-20k by the time it's all said and done, but that's fine, it probably had that much equity in it when I closed and it'll have more after I'm done.  (I caught a unicorn)  

    1Reply
  • Mark Reitman
    Rental Property Investor · Chicago, IL · Member since 2018 · 53 posts · 54 votes
    6y

    Hey @James Rowe, here's a checklist I use:

    https://docs.google.com/spreadsheets/d/13yRo15uhzVS6Luk0YIBQZG16Tcm1b2V4NfCDetcP7ek/edit#gid=0

    You can get a sense of cost by adding up whatever you need or want to offer. As others mentioned, expect some deferred maintenance too. It seems most cabins typically need something (or will), some you find during an inspection, others you hear from guests, and then you need to be prepared to repair it ASAP.

    1Reply
  • Leora Merrell
    Rental Property Investor · Member since 2019 · 276 posts · 235 votes
    6y

    I close on a brand new build next week. Between furnishings (2 bedroom), stocking kitchen and bathrooms, outdoor furniture and hot tub, I’ll be around $25k.

    1Reply
  • Tim Schroeder
    Rental Property Investor · Castle Rock, CO · Member since 2017 · 335 posts · 387 votes
    6y

    I've bought three, already furnished, and still spent $8-12k each to get them up and running. Sold #2 a couple weeks ago. I JUST TODAY arrived back home from getting #3 up and running. Exhausted but loved every minute.

    0Reply
  • Tim Schroeder
    Rental Property Investor · Castle Rock, CO · Member since 2017 · 335 posts · 387 votes
    6y

    I love spreadsheets, but @Luke Carl makes a good point. If the deal is good and the *ongoing* cash-flow numbers make sense, then it doesn't matter what you spend to get it ready. Within reason of course. I'm not talking spending crazy numbers. What I mean is if it's already a rental with most of the basics in place, it shouldn't matter if you spend 3k or 25k, if it cash flows sufficiently. And if it doesn't cash flow enough to handle that, then don't do it.

    1Reply
  • Ruth Blue
    Realtor · Pigeon Forge, TN · Member since 2018 · 230 posts · 111 votes
    6y

    My mom @Rhonda Blue has 6 cabins and start up costs were from 5k normally up to 10k if it needed to be stained. We are under contract on my first one as partners and we expect our startup to be right around 5k. We need to add an oven, washer/dryer unit, linens, and personal touches. Hope that helps! 

    2Reply
  • Maria King
    Investor · Tampa Bay Florida · Member since 2019 · 18 posts · 4 votes
    6y

    Hello all,

    Those of you self managing, how do you send your rental agreement? do your guests fill it out and sign it or do you pre-populate it for them? 

    Thanks,

    Maria

    0Reply
  • John LaVecchia
    Contractor · Mooresville, NC · Member since 2017 · 67 posts · 5 votes
    6y

    @James Rowe I'm currently working with a STR developer. I'm helping a buyer purchase one of his STRs in Charlotte and I know he is in the process of building a STR neighborhood in Gatlinburg. He's super helpful and knows his numbers. If your interested I would be happy to connect you two!

    0Reply
  • Ruth Blue
    Realtor · Pigeon Forge, TN · Member since 2018 · 230 posts · 111 votes
    6y
    Originally posted by @Maria King:

    Hello all,

    Those of you self managing, how do you send your rental agreement? do your guests fill it out and sign it or do you pre-populate it for them? 

    Thanks,

    Maria

    WE have our rental agreement in our cabins in a cabin manual. It says in the welcome letter they are required to read it and by staying at our cabins have agreed to the rental agreement. 

    0Reply
  • Tracy Wood
    Southaven, MS · Member since 2024 · 3 posts · 1 vote
    1y

    @Luke Carl @Ken Boone @John Underwood @Julie McCoy @Mark Reitman @Ruth Blue@rhondablue

    Hi there! Curious if anyone on this thread is still active? My hubby and I are currently discussing taking the first steps towards buying a STR cabin in the Pigeon Forge/Gatlinburg area and I would love to pick the brains of those of you who are experienced!

    0Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    1y

    Many of us are.

    We own a 6 BR cabin in Wears Valley. 

    0Reply
  • Mark Reitman
    Rental Property Investor · Chicago, IL · Member since 2018 · 53 posts · 54 votes
    1y

    We are out of the Pigeon Forge/Gatlinburg area and in other markets now. 

    0Reply
  • Collin HaysBusiness Member
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    1y
    Quote from @James Rowe:

    I'm working on my expenses spreadsheet for purchasing my first STR cabin near Gatlinburg. I currently have:

    1. $175 Smart lock keypad for remote management of door lock on Amazon

    2. Furnishings that may not already be present

    3. Utilities start-up fees

    4. Initial cleaning fee if needed (may do it myself if possible)

    5. Initial maintenance costs to get the place ready to rent (if not ready to go already)

    6. Listing/marketing upfront fees (not sure if there are any)?

    I don’t know what I don’t know here so please feel free to help me out or tell me if I’m way off track. How much are you guys seeing these things cost? What would you plan for?

    *

    [email protected]806-672-7102
    SMOKY MOUNTAIN FALLS INC.51 Review
    WebsiteView Page
    0Reply
  • Collin HaysBusiness Member
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    1y
    Quote from @Tracy Wood:

    @Luke Carl @Ken Boone @John Underwood @Julie McCoy @Mark Reitman @Ruth Blue@rhondablue

    Hi there! Curious if anyone on this thread is still active? My hubby and I are currently discussing taking the first steps towards buying a STR cabin in the Pigeon Forge/Gatlinburg area and I would love to pick the brains of those of you who are experienced!


    Feel free to PM me.  I own property there, as well as a small property management company. I've been investing there for 19 years now. Been through the ups and downs.

    [email protected]806-672-7102
    SMOKY MOUNTAIN FALLS INC.51 Review
    WebsiteView Page
    0Reply
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