I'm curious if there are any STR investors in Blue Ridge, GA willing to share their experience(s)? We love the area, but not sure how the occupancy and return compares to other markets such as Gatlinburg.
@Mike H.@Billie Young I have been doing the same research myself. We are hopefully (fingers crossed) going to have an accepted offer on an off-market deal in Franklin, NC. I was looking at a few of the North GA and Western NC mountain towns.
I think it will boil down to what are your goals, what kind of property you are able to purchase, and how you manage/market it. From talking with many owners in the various areas in and around Blue Ridge (Epworth, Mineral Bluff, Morganton, Cherry Log, etc.), you could keep it full up to 90% of the year. A few owners indicated they have been at 320-330 days rented for several years. However, that is certainly not the norm. I think you could reasonably expect 60% occupied if you price it right, maybe higher.
My go/no-go was break even (net 0 cash flow) under the following assumptions: 50% occupied at market rent (based on comparable properties) including 15% of gross rents to maintenance/cap-ex (at 100% occupancy) and utility costs. Another rule of thumb is 2% the purchase price to maintenance. My estimate of 15% always ended up being higher, but hey, what's it going to hurt to be more conservative. Do keep in mind, we are not approaching this from a purely investment standpoint. There will be some personal use. I did also check long term rental rates to make sure it could work from that standpoint if needed. Every additional booking/income above these assumptions is just gravy.
Hi Billie, I'm starting to get knee deep in research myself. We are approaching closing on sale of an investment property and are looking to 1031 in to an airbnb cabin in Blue Ridge. We live in ATL so Blue Ridge seems to be the place to do it. Around an hour away. I'll connect with you and see if you want to chat...
@Mike H.@Billie Young I have been doing the same research myself. We are hopefully (fingers crossed) going to have an accepted offer on an off-market deal in Franklin, NC. I was looking at a few of the North GA and Western NC mountain towns.
I think it will boil down to what are your goals, what kind of property you are able to purchase, and how you manage/market it. From talking with many owners in the various areas in and around Blue Ridge (Epworth, Mineral Bluff, Morganton, Cherry Log, etc.), you could keep it full up to 90% of the year. A few owners indicated they have been at 320-330 days rented for several years. However, that is certainly not the norm. I think you could reasonably expect 60% occupied if you price it right, maybe higher.
My go/no-go was break even (net 0 cash flow) under the following assumptions: 50% occupied at market rent (based on comparable properties) including 15% of gross rents to maintenance/cap-ex (at 100% occupancy) and utility costs. Another rule of thumb is 2% the purchase price to maintenance. My estimate of 15% always ended up being higher, but hey, what's it going to hurt to be more conservative. Do keep in mind, we are not approaching this from a purely investment standpoint. There will be some personal use. I did also check long term rental rates to make sure it could work from that standpoint if needed. Every additional booking/income above these assumptions is just gravy.
Cool! We actually just went up to an Airbnb in Cashiers at the beginning of November. Real close to Franklin. We are looking for cash flow mostly. And proximity to Atlanta. Our 1031 is at 550k. So i need to find one or two properties in that range. I love NC, but i'm worried it might be a little to far from me. We are ITP.
I can’t really speak to properties in that range and you may have difficulty finding two in that range. Our max was 320k, which knocks out a lot of Blue Ridge.
We’re in East Cobb so blue ridge is about 1.5 hours away. Lucky for us, the property in Franklin is only 2.25 hours.
If you’re going for cash flow, are you going to self manage? If not, you may have a very tough time unless you will not have a mortgage.
Most of the management companies up there take 25-40%.
When i said blue ridge i mean the area not the city. Although i am considering a blue ridge city airbnb if the numbers work. My ideal place in the blue ridge area would be on the toccoa river. or with a nice mountain view. something that i could charge a little more for per night. and get better occupancy.
My goal is to cash flow and if I can use it personally then great. We are working on deals in other markets but it’s hard to get something in the Smokies right now. I want to buy however many STRs it takes to create a nice six figure income. I will manage myself.
My biggest concern with blue ridge is cleaning companies and handy man services.
I didn’t realize that occupancy was in the 90% range! That’s very promising!
Question to all of the ATL investors on this thread: Why does the proximity of the rental cabin to ATL make a difference for you all?
Is it because you plan on using the cabin for personal use as well as an investment, or are you planning on fixing maintenance/repair issues yourselves, or something else all together?
I live in ATL as well and have 2 STRs in Gatlinburg that have been performing extremely well so just curious.
@Jason Fitzwater for me, it was personal use (limited) and the ability to go up on a weekend and tackle smaller projects. I will have a handyman for small repairs, but I still like to do some things myself.
Not related to it being too far away, I did not really enjoy the Gatlinburg/Pigeon Forge area so much. Nothing wrong with it and I know for many, it is a great income producer. Just not for me.
@Billie Young like I said, the 90% is NOT the norm... some of these owners are skilled marketers, agents, etc. I would assume much, much lower than that.
Question to all of the ATL investors on this thread: Why does the proximity of the rental cabin to ATL make a difference for you all?
Is it because you plan on using the cabin for personal use as well as an investment, or are you planning on fixing maintenance/repair issues yourselves, or something else all together?
I live in ATL as well and have 2 STRs in Gatlinburg that have been performing extremely well so just curious.
Thanks.
Hi Jason,
Want to be close for both some personal use and being able to do some work myself. Yeah i know Gatlinburg is a great market. I am considering it for sure. I think it might be a sweet spot for my price range.
Overall I'm a bit nervous though. Just moved to Atlanta. Doing a 1031 exchange and buying a personal house. Talking well over 1m in real estate purchases in the next two months. See so many real estate investors saying don't buy right now. It is what it is i guess. i can afford it. i am buying long term holds etc.
I don't have North Georgia mountains experience but I do have metro Atlanta (Kennesaw) Airbnb and vacation in Florida Airbnb experience and I'm looking to expand into the north Georgia mountains Ellijay or Blue Ridge I also just purchased a membership in the Northeast Georgia MLS so I have access to those properties as well. I'm currently developing a mobile home lot for resale in Ellijay. Let me know if I can be of any help to anyone pulling comps etc.
Thanks guys, I've rented in Blue Ridge area many times and it's a great spot for sure. Good luck!
Thank you Jason! Curious why you chose Gatlinburg? As we both live in the same place. I'm guessing because it is probably more of a sure thing with higher occupancy and more cleaners/handyman companies etc? Tons of year round tourism?
@Mike H. I didn't really look at any other markets. I did a ton of research and knew it was a great investment & cash flow market and very STR friendly. Also, I personally knew people having success in that area so I was a little more comfortable jumping in on the first one. Although, we went under contract the day before Dollywood shut down and I'd be lying if I said I wasn't more than a little nervous! No regrets though and it's been so good we closed on a second one a month ago.
And yeah, having 12 million annual visitors to that area helps also. :)
I am an agent in Northwest GA (Dalton is my home-base). We own a cabin in Ellijay that stays booked as much as I want it, but I'd caution that 90% is an unrealistic number just from the cleaning services standpoint. Not easy to find cleaning companies that are trustworthy and can deliver the fast turnaround that you need to be able to re-lease the cabin same day. Our check out is at 10a, and most of the time, we have to book an empty night in between the stays to make sure the crew has enough time/schedule to get it ready for the following day at 3p check-in. We have very little vacancy other than the night in-between guests, but that's a lot of nights over the course of the year.
@Eric H Clark We self manage our STRs for really for two reasons... greater cash flow and tax savings. Self managing takes a little effort and some time, but reward far outweighs the effort for us.
If you are okay with the trade-off of paying 20-30% in management fees with less tax savings for a more passive investment, then management companies may be a good option for you.