Personal experiences in Gatlinburg, TN area
New to Real Estate · Atascadero, CA · Member since 2016 · 90 posts · 13 votes
Personal experiences in Gatlinburg, TN area
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Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votesFirst, I think it is important to define the "Gatlinburg" market, as Gatlinburg is but a small part of the draw in the TN portion of the Smoky Mountains. Starting from the east and moving west, I consider the "Gatlinburg" market to include the following: Hartford, Cosby, Cobbly Nob, Pittman Center, Gatlinburg, Sevierville (portions thereof), Pigeon Forge, Wears Valley, and Townsend.
There are entrances to the National Park in Cosby, Pittman Center, Gatlinburg, and Townsend.
Gatlinburg has traditionally been the epicenter of this entire area. It is the typical four-season mountain town with arts, crafts, fishing, skiing, hiking, t-shirts, and ice cream parlors. Traditionally, and very generally speaking, vacation homes in Gatlinburg are the most desirable for both ownership and guest preference. Gatlinburg rentals have been strong for decades.
Pigeon Forge is also very strong, and these days, the rents in Pigeon Forge probably rival Gatlinburg. But for the same or similar money, I'm buying the Gatlinburg address every time.
Cosby...now this is an interesting area. I bought a 2400 square foot log cabin with 250 feet of frontage on Cosby Creek - a blue ribbon trout stream - for $240K in 2005. The annual rents were around $16,000 per year. But the rents have steadily grown in Cosby and my cabin should easily exceed $50,000 this year. Cosby used to be the "value" area to buy because it is 30 minutes from Gatlinburg. It is more rural and less tourist-y. But Cosby has become a hot STR area. My $240K cabin is probably worth $650K today pretty easily. It would be worth $1 million in Gatlinburg on a river front.
If you are attempting to forecast future rents and house values in the Gatlinburg region, it might be helpful to look at similar mountain towns out west. Vail, Aspen, Breckenridge, Tahoe, Telluride, Taos, Sun Valley. In these markets, the price per square foot for a legit single family cabin is often $2000 per foot or much higher. In Gatlinburg, we are still talking homes in the $300-500 per square foot region. That wouldn't buy you more than a single wide trailer in the mountain towns out west.
There is no reason whatsoever that Gatlinburg will not eventually catch or even surpass the values of the towns out west.
1. Gatlinburg is almost a year-round destination. The mountain towns out west are 6-8 month seasons.
2. There's substantially more entertainment offerings in Gatlinburg, again, year-round.
As high as things have gotten, Gatlinburg is still a bargain-basement place in terms of a decent yield and the promise of long-term appreciation in value.
27 Replies
- 5yCollin HaysBusiness MemberProperty Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
First, I think it is important to define the "Gatlinburg" market, as Gatlinburg is but a small part of the draw in the TN portion of the Smoky Mountains. Starting from the east and moving west, I consider the "Gatlinburg" market to include the following: Hartford, Cosby, Cobbly Nob, Pittman Center, Gatlinburg, Sevierville (portions thereof), Pigeon Forge, Wears Valley, and Townsend.
There are entrances to the National Park in Cosby, Pittman Center, Gatlinburg, and Townsend.
Gatlinburg has traditionally been the epicenter of this entire area. It is the typical four-season mountain town with arts, crafts, fishing, skiing, hiking, t-shirts, and ice cream parlors. Traditionally, and very generally speaking, vacation homes in Gatlinburg are the most desirable for both ownership and guest preference. Gatlinburg rentals have been strong for decades.
Pigeon Forge is also very strong, and these days, the rents in Pigeon Forge probably rival Gatlinburg. But for the same or similar money, I'm buying the Gatlinburg address every time.
Cosby...now this is an interesting area. I bought a 2400 square foot log cabin with 250 feet of frontage on Cosby Creek - a blue ribbon trout stream - for $240K in 2005. The annual rents were around $16,000 per year. But the rents have steadily grown in Cosby and my cabin should easily exceed $50,000 this year. Cosby used to be the "value" area to buy because it is 30 minutes from Gatlinburg. It is more rural and less tourist-y. But Cosby has become a hot STR area. My $240K cabin is probably worth $650K today pretty easily. It would be worth $1 million in Gatlinburg on a river front.
If you are attempting to forecast future rents and house values in the Gatlinburg region, it might be helpful to look at similar mountain towns out west. Vail, Aspen, Breckenridge, Tahoe, Telluride, Taos, Sun Valley. In these markets, the price per square foot for a legit single family cabin is often $2000 per foot or much higher. In Gatlinburg, we are still talking homes in the $300-500 per square foot region. That wouldn't buy you more than a single wide trailer in the mountain towns out west.
There is no reason whatsoever that Gatlinburg will not eventually catch or even surpass the values of the towns out west.
1. Gatlinburg is almost a year-round destination. The mountain towns out west are 6-8 month seasons.
2. There's substantially more entertainment offerings in Gatlinburg, again, year-round.
As high as things have gotten, Gatlinburg is still a bargain-basement place in terms of a decent yield and the promise of long-term appreciation in value. - Property Manager · Pigeon Forge · Member since 2016 · 199 posts · 208 votes5y
@Collin Hays did a way more thorough job answering this than I would have. Haha!
Prices are going up nationwide not just in the PF/G area. Rates are definitely up from pre-pandemic but so is my Big Mac and cable bill. Will the increases stick? Will purchase prices go down? Nobody knows for sure.
But purchase prices are still way below what they are in CO and you can easily get good cash flow from cabins even IF rental rates go down next year. (They're still going up now) - Investor · Flowery Branch, GA · Member since 2019 · 413 posts · 412 votes5y
@Sean Harris I can’t speak to your actual question as I’ve only owned there for just over a year, but my prediction is income in this market will level off and settle into a easy gradual growth up to the point that @Collin Hays is talking about. People are moving to the southeast US in droves after the pandemic and mostly from more expensive markets. They will continue to go on vacation, but instead of going to the Rockies a certain percentage will come to the Smokies. It’s a numbers game.
Also this area continues to add attractions. Check out on Google what the Eastern band of Cherokee Indians just broke ground on in Sevierville for more info.
- Member since 2019 · 16 posts · 9 votes5y
@Sean Harris the numbers are real. I’ve tracked it for years and finally started buying land over the last 18 mths. $25k+ gross rent per bedroom. View and amenities. Framing on my first build is nearly complete abs we just broke ground in build 2. Planning to sell build 2 as I just acquired 100 acres we will develop into 20+ premium lots. Any interest in discussing the the area or my build we will sell let me know.
All of the above plus coupled with the statistical fact of how many visitors come to see the GSMNP each year say that it will continue to be a consistent area for a LONG time to come. Visitors to most major national parks seem to generally increase year over year, but if you look at places like Yosemite, Grand Canyon, Rocky Mountain - their yearly visitor stats don't even compare with the visitors to the GSMNP. You can google these stats and see for yourself. Another stat I have seen but I can't quite remember how accurate I am stating this - is that something like 50% of the US population is within an 8 hour drive of the GSMNP so that makes it even more accessible than other places where you have to fly to. So all those people coming to the GSMNP need a place to stay and a LOT of them choose the Pigeon Forge, Gatlinburg area and will continue to for years to come.
- Property Manager · Pigeon Forge · Member since 2016 · 199 posts · 208 votes5y
Originally posted by @Josh Helvie:
@Sean Harris the numbers are real. I’ve tracked it for years and finally started buying land over the last 18 mths. $25k+ gross rent per bedroom. View and amenities. Framing on my first build is nearly complete abs we just broke ground in build 2. Planning to sell build 2 as I just acquired 100 acres we will develop into 20+ premium lots. Any interest in discussing the the area or my build we will sell let me know.
Good luck with the labor to make it happen. You will be on a gold mine if you have a good team.
And you're way underestimating revenues. My 1BRs all crack 60k gross. - Member since 2019 · 16 posts · 9 votes5y
@Justin Anderson already underway. We will have the lots offered soon with incredible views. The 2 builds are going great with a modern look and indoor pools. Yes, I try not to overplay the numbers but you are correct….they are MUCH better than I stated.
- 5yRyan MoyerBusiness MemberProperty Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 996 posts · 1k+ votes
Originally posted by @Collin Hays:
Cosby...now this is an interesting area. I bought a 2400 square foot log cabin with 250 feet of frontage on Cosby Creek - a blue ribbon trout stream - for $240K in 2005. The annual rents were around $16,000 per year. But the rents have steadily grown in Cosby and my cabin should easily exceed $50,000 this year. Cosby used to be the "value" area to buy because it is 30 minutes from Gatlinburg. It is more rural and less tourist-y. But Cosby has become a hot STR area. My $240K cabin is probably worth $650K today pretty easily. It would be worth $1 million in Gatlinburg on a river front.
I think kind of what the OP is asking is how does that $50k this year compare to 2018 and 2019 before the pandemic? Was the 2021 increase pretty inline with prior years or was it a big outlier jump?
If 2018 was $42k and 2019 was $45k and 2021 was $50k then that seems a lot more sustainable long-term than if 2018 was $23k and 2019 was $24k and 2021 was $50k+.
In general there have been a ton of posts here talking about current house prices compared to how well they will cash flow with 2020/2021 rental rates/occupancy, but not much info on how current house prices would cash flow if rental rates return to a little higher than 2018/2019 levels, or even how 2020/2021 levels compare to 2018/2019 levels.
I haven't actually owned in TN, but I was looking back in 2019 and I remember a lot of houses that people projected to do "upwards of $65k" selling for $900,000 now. I would assume at $900,000 they are doing a lot more than $65k now but who knows how sustainable that is long-term.
Cosmic Vacations4.9175 Reviews - 5yCollin HaysBusiness MemberProperty Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
Originally posted by @Ryan Moyer:
Originally posted by @Collin Hays:
Cosby...now this is an interesting area. I bought a 2400 square foot log cabin with 250 feet of frontage on Cosby Creek - a blue ribbon trout stream - for $240K in 2005. The annual rents were around $16,000 per year. But the rents have steadily grown in Cosby and my cabin should easily exceed $50,000 this year. Cosby used to be the "value" area to buy because it is 30 minutes from Gatlinburg. It is more rural and less tourist-y. But Cosby has become a hot STR area. My $240K cabin is probably worth $650K today pretty easily. It would be worth $1 million in Gatlinburg on a river front.
I think kind of what the OP is asking is how does that $50k this year compare to 2018 and 2019 before the pandemic? Was the 2021 increase pretty inline with prior years or was it a big outlier jump?
If 2018 was $42k and 2019 was $45k and 2021 was $50k then that seems a lot more sustainable long-term than if 2018 was $23k and 2019 was $24k and 2021 was $50k+.
Makes sense. I didn't read the question that way. In other words, did the pandemic create pent-up demand and a temporary market imbalance that is subject to correction/normalization? The answer would be "yes, almost certainly."
However, in the Great Smoky Mountains area, the trend has been trending upward for decades, and while a one or two-year extra bump will normalize, the trend upward will continue.
Gatlinburg is the Vail of the southeast, and the big money is jumping into the game. Look for decent cabins to cost $1 million or more someday soon.
- 5yRyan MoyerBusiness MemberProperty Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 996 posts · 1k+ votes
Originally posted by @Collin Hays:
If you are attempting to forecast future rents and house values in the Gatlinburg region, it might be helpful to look at similar mountain towns out west. Vail, Aspen, Breckenridge, Tahoe, Telluride, Taos, Sun Valley. In these markets, the price per square foot for a legit single family cabin is often $2000 per foot or much higher. In Gatlinburg, we are still talking homes in the $300-500 per square foot region. That wouldn't buy you more than a single wide trailer in the mountain towns out west.
There is no reason whatsoever that Gatlinburg will not eventually catch or even surpass the values of the towns out west.
1. Gatlinburg is almost a year-round destination. The mountain towns out west are 6-8 month seasons.
2. There's substantially more entertainment offerings in Gatlinburg, again, year-round.
As high as things have gotten, Gatlinburg is still a bargain-basement place in terms of a decent yield and the promise of long-term appreciation in value.I think the major difference between those towns and the Gatlinburg area is that people buying in those towns want a house for themselves even more desperately than they want a house to rent out. As such, land in those areas is worth a ton too, whereas land in Gatlinburg has barely appreciated with the market because if it's not something people can rent out, people don't really want it.
Short term rental demand in Jackson, WY could die out overnight and a home there wouldn't lose a penny of value. If everyone goes back to hotels and international travel tomorrow and short term rental demand in the Smokies returns to pre-covid levels, the cabin values could drop massively.
That's not to say any of this will happen. Odds are probably good that home values in the Smokies have found a new floor and will only go up from here. But people shouldn't be misled that there isn't some risk to that. The big risk is not only the sheer number of additional people looking to do driving vacations right now after being couped up during covid, but also the class of vacationer in the area. It's not just occupancy in the smokies that is ballooning right now it is average daily rate as well, and it's worth considering if a simple 4br no frills cabin will keep renting for $1k/night after the travelers who would typically be doing their summer trip overseas and spending $6k on family plane tickets alone return to that type of travel. For that type of traveler $1k/night and no plane costs is probably a cheap vacation. For the typical pre-covid Gatlinburg area traveler that probably wasn't. So we're not just getting more travelers right now, we're getting wealthier travelers too.
Again, no guarantees in either direction, and it's probably still a great investment. But it's something to think about at least.
Cosmic Vacations4.9175 Reviews @Ryan Moyer Yea I don't think the idea that folks are going to go back to hotels is going to happen much with my rentals in the Pigeon Forge area. What COVID did was force people out of fear to flee from hotels and they felt safe staying in a cabin with just their family. These are people who never considered staying at a cabin before. They just always went to hotels. Now after staying in a cabin for the first time, these folks are like, dude why did we ever stay in a hotel? They now have been exposed to all the advantages and amenities in these cabins. These people saw the value of the rental cabins for their family and going back to a hotel stay is just not gonna be the same. I think a majority of these people have changed their mindset. That is basically what we have been told from first time cabin guests during this past year and so I don't expect to lose a lot of guests to hotels once everything settles down. Also, if cabin prices drop, that has no bearing on the ADR. Again, number of visitors to the Smokies increases in general year after year. These folks need somewhere to stay. Cabin prices affect the investors, but the supply and demand as well as the amenity level of the cabins is what will drive the ADR.
- Member since 2019 · 16 posts · 9 votes5y
Some friends that live full time in Gatlinburg said the Wears Valley area is considering traffic “alternatives” due to congestion. Apparently the Smokey’s are on pace to shatter attendance records. We believe in the area so much we’ve gone all in and don’t believe for one second we’ve seen the top. Cash flow! Exclusivecabins.com
@Luke Carl what’s better then working with drunk entitled people on vacation. LoL
I’ve always used a management company but I get your point.
Thinking about switching my approach possibly to self-management in the although they more I think about it the less appealing it is as I don’t want another j-o-b!
What’s your take on the continued upward movement of prices in Gatlinburg area?
Nice cabins are going 300-400/sq ft. How are investors profiting with a mortgage and overhead?Just saw one this morning with multiple offers after being on the market a few hours… it’s 610k with no view and in a poa where they don’t even own the land!
@Ryan Moyer some good points. Supply and demand. It’s all economics. No one knows what’s going to happen next. From an investment perspective I’m find this area challenging to make a move as the sale price is at a place where after expenses it seems very little to chew on. Spoke to an agent today who says owners were paying 35% management fee! For me, 25% is max bit after mortgage payment and expenses I’m not seeing how’s your of these places are a wise investment…
Am I missing something?
- 4yCollin HaysBusiness MemberProperty Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
Originally posted by @Jeff Gold:
@Ryan Moyer some good points. Supply and demand. It’s all economics. No one knows what’s going to happen next. From an investment perspective I’m find this area challenging to make a move as the sale price is at a place where after expenses it seems very little to chew on. Spoke to an agent today who says owners were paying 35% management fee! For me, 25% is max bit after mortgage payment and expenses I’m not seeing how’s your of these places are a wise investment…
Am I missing something?
My company charges 25%. But of course you can do it yourself, as long as you have TIE: Time, interest, and energy to self-manage. If you don't have TIE, you need to find a good property manager.
About a year ago, we took on a client who is quite a high-profile attorney in Philadelphia. I don't know how much he bills out per hour, but safe to say it's way more than the money he would save by self-managing. We have tripled his annual rents, because we have TIE and he didn't. Then again, we'd better have TIE, because we are getting PAID to have it!
Calculate the value of your time. If you make a lot more doing other things besides self-managing, don't self manage. But if you have TIE, self-managing is the way to go.
@Collin Hays good points. And this is why I will likely never self-manage.
- New to Real Estate · Member since 2020 · 220 posts · 107 votes4y
Many investors and CEOs are getting into the STR game citing current trends among Gen Z'ers etc. Houses and condos are the vacation destination of the future and I'm sure the hotel chains feel the heat.
As far as Gat/PF is concerned, I'm a little hesitant to think cabin prices will remain this high after the COVID spike is over. It's very difficult to make the numbers work right now unless you are paying cash and even then ROI is questionable at these cabin prices. Run your numbers on 2019 gross incomes and add 10-15k to reflect past growth trends and inflation.
On another note, I think a lot of investors are going luxury pool cabins right now. This assures better cash flow and when the numbers drop they will be positioned to cash flow even during recession years. I’m building a cabin in Gatlinburg as we speak and I’m making it as luxury as I can afford. Existing 3 bedroom cabins with a view are pricing in the $1mm range now. My thoughts. @Kyle Smith thank you for sharing your thoughts. Yes I’ve been noticing lots of “pool” homes going up. Are they just small pools in a room like a big jacuzzi?
- New to Real Estate · Member since 2020 · 220 posts · 107 votes4y
@jeff gold they are typically building them with approx 20x12 or 17x9 pools.
- Member since 2021 · 4 posts · 2 votes4y
@Collin Hays I’m an attorney and am considering self-managing STRs to learn more firsthand and increase my return. Your point about hourly rates and value of one’s time and trusting professionals and industry experts is certainly fair, but it also assumes an attorney directly receives 100% of his or her hourly rate, which is not true (particularly in larger firms with the highest rates). And, at some point, when a lawyer has worked a ton of hours in a billable year, there is a diminishing return on the extra time worked. Plus, I suspect some lawyers wouldn’t mind a break from legal work and enjoy investing time and learning other areas even if the return on ones time isn’t as high (not unlike a hobby in some respects). :)
- Investor · Greenville, SC · Member since 2020 · 210 posts · 302 votes4y
I don’t know @Collin Hays personally, but from following him on Bigger Pockets I’d say he’s a rare and valuable resource as a property manager in the Smokies. 95% of PMs in the area do not know what they are doing, but I’m fairly confident from what Collin says on these forums that he could be well worth it for a newbie.
There are wildly varying opinions on PM vs self-manage, and some of the best content creators on STRs push the idea that it’s easy to self-manage remotely. I self-manage from Virginia, and I love it, but it ain’t easy, and it takes serious ongoing effort to optimize everything. I have no clue how people do it effectively without ever visiting the area.
Even though there are literally thousands of cabins in the Smokies I can count on two hands - perhaps plus two feet - how many self-managers I believe are hitting home runs based on my Airbnb competitive analysis deep dive.
- 4yCollin HaysBusiness MemberProperty Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
Originally posted by @Edward S. Sarnowski:
@Collin Hays I’m an attorney and am considering self-managing STRs to learn more firsthand and increase my return. Your point about hourly rates and value of one’s time and trusting professionals and industry experts is certainly fair, but it also assumes an attorney directly receives 100% of his or her hourly rate, which is not true (particularly in larger firms with the highest rates). And, at some point, when a lawyer has worked a ton of hours in a billable year, there is a diminishing return on the extra time worked. Plus, I suspect some lawyers wouldn’t mind a break from legal work and enjoy investing time and learning other areas even if the return on ones time isn’t as high (not unlike a hobby in some respects). :)
Edward, if you have TIE (Time, Interest, and Energy), then self managing is for you, regardless of your profession or income. Go get 'em!
- 4yCollin HaysBusiness MemberProperty Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
Originally posted by @Wilson Hunter:
I don’t know @Collin Hays personally, but from following him on Bigger Pockets I’d say he’s a rare and valuable resource as a property manager in the Smokies. 95% of PMs in the area do not know what they are doing, but I’m fairly confident from what Collin says on these forums that he could be well worth it for a newbie.
There are wildly varying opinions on PM vs self-manage, and some of the best content creators on STRs push the idea that it’s easy to self-manage remotely. I self-manage from Virginia, and I love it, but it ain’t easy, and it takes serious ongoing effort to optimize everything. I have no clue how people do it effectively without ever visiting the area.
Even though there are literally thousands of cabins in the Smokies I can count on two hands - perhaps plus two feet - how many self-managers I believe are hitting home runs based on my Airbnb competitive analysis deep dive.
Wilson, thank you for the compliments. I just try to call it like I see it. You are spot on that it does take time and effort to do a good job self-managing. It all comes back to Time, Interest, and Energy. If you have these three things - all three things - then self managing is a winner winner chicken dinner!
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