5 Broken Bow cabins for sale: none of them cash flow at the asking price

Attorney · 10451 Mill Run Cir #755 Owings Mills, MD 21117 · Member since 2024 · 806 posts · 291 votes

Quote from @Rati Meskhishvili:

After running Smoky Mountain cabins tests, I ran the same tests on Broken Bow / Hochatown. I went through the Redfin listings, found the ones that state their revenue, and picked 5 across the price range. The revenue is what each listing claims (but I couldn't verify them).

My assumptions for these tests were following:

25% down payment at 6.75% interest rate with 30 years of term
20% management fee
5% platform fee
5% maintenance and CapEx reserve each
45% occupancy (AirDNA has the market at around 44%) except Cabin B at the 90% occupancy (as this was the number listing claimed)
2.5 night average stay
0.88% property tax from the price

The results were following:

Cabin A: At asking price of USD 480k stated gross revenue was USD 72k (15% from asking price) and cash flow of USD -6.6k per year. My calculated break-even price was USD 381k
Cabin B: At asking price of USD 545k stated gross revenue was USD 80k (14.7% from asking price) and cash flow of USD -13.4k per year. My calculated break-even price was USD 346k
Cabin C: At asking price of USD 749k stated gross revenue was USD 110k (14.7% from asking price) and cash flow of USD -7.2k per year. My calculated break-even price was USD 642k
Cabin D: At asking price of USD 850k stated gross revenue was USD 64k (7.6% from asking price) and cash flow of USD -40.9k per year. My calculated break-even price was USD 241k
Cabin E: At asking price of USD 1.289 mln stated gross revenue was USD 140k (10.9% from asking price) and cash flow of USD -22k per year. My calculated break-even price was USD 962k

So none out of 5 bring in positive cash flow, compared with 1 out of 5 in the Smokies. Cabins A, C, and E would need 51%-58% occupancy to break even. and Cabins B and D don't break even at any occupancy.

What surprises me is that in my last thread Andrew Steffens said he looks for about 14% gross revenue on higher priced homes, and 15%-16% around USD 400k. Cabin A is right at 15% and still loses money. I think, short stays (more cleanings) and property taxx are why, but I would like to hear if I am wrong.

Self-managing turns Cabins A, B, C, and E positive (USD 2.6k - USD 14.8k range a year). But Cabin D loses either way. Bought with cash, they return only 1%-4.7%.

I would like to ask two questions to people who know this market:

Current tax bills on these listings are very low, some under USD 1k. I assumed they get reassessed after a sale (at 0.88%). Is that what really happens? Even at the current bills all 5 still lose money, but the gap is big.
AirROI shows supply up about 30% in a year. Are owners here seeing revenue drop?

(I used AI tools to help run the numbers)

@Rati Meskhishvili, I think you're right to question the property tax numbers, especially when the current bills are much lower than what you're estimating. From what I understand, Oklahoma can reassess property values after a transfer, so I wouldn't rely on the seller's current tax bill when running the numbers. As for the growing number of cabins, I'd want to compare actual revenue from similar properties over the past couple of years before assuming the market is still performing the same way.

I'm a real estate attorney and broker based in Maryland, and I work with investors on property purchases and transactions. For example, when someone is buying an investment property, I think it's important to look beyond the seller's numbers and verify expenses that may change after closing, including taxes, insurance, and any restrictions affecting how the property can be used.

I appreciate you sharing such a detailed analysis, @Rati Meskhishvili! It's a good reminder that even properties with strong revenue can struggle to generate positive cash flow. Happy to stay connected!

[email protected]240-266-0291

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Andrew SteffensBusiness Member

Tampa, FL · Member since 2022 · 4k+ posts · 3k+ votes

3d

Another good read! I wanted to correct one thing, I start around those stated yields as a possible breakeven number. Obviously taxes, insurance, management costs, utilities etc do vary from market to market. Let me know if you would like to do one in Tampa I can show you some recent sales :D

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John RacinePro Member

Rental Property Investor · Casselberry, FL · Member since 2008 · 229 posts · 115 votes

3d

Rati, I don't know Broken Bow, so I'll leave the tax and supply questions to locals. Diana covered the reassessment side. I do have a few thoughts on the model itself.

Disclosure: I co-host STRs for other owners.

1) Short stays probably aren't what's sinking these, at least not in your model. Cleaning isn't in your expense list. On my listings and the ones I manage, the cleaning fee is a pass-through: the guest pays what the cleaner charges. The catch is the seller's number. At a 2.5-night average stay, cleaning fees can be a big part of the "gross revenue" a listing claims. If those fees are in there, the revenue the owner actually keeps is lower than it looks, and the deals are worse than your test shows.

2) What is the 5% platform fee budgeted for? Airbnb and VRBO fees are significantly higher than that, so I'm wondering if it's a local marketing or booking service. If it is, and the 45% occupancy reflects only that channel, adding Airbnb, VRBO and others would raise your fee line. It could also bring in more bookings and more revenue, so I'd model both sides before writing these off.

3) Building on Diana's point about verifying revenue: I'd ask each seller for actual payout reports, then check them against comparable cabins in PriceLabs Market Dashboards or whatever data source you trust. A claimed 90% occupancy on Cabin B is the first one I'd want to see proof of.

4) Before assuming nightly is the only play, see whether longer stays exist there. In my markets, I check Airbnb for 30+ day competition and Furnished Finder for real mid-term demand before I convert a unit. A cabin market may not have much of it, but it's a quick check, and fewer turnovers change the math.

Your managed vs. self-managed result is the real takeaway. At a 20% fee, these need either a lower price or an owner who is hands-on.

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Rati Meskhishvili
OP
Tbilisi, Georgia (country) · Member since 2026 · 27 posts · 7 votes
2d
@John Racine Thank you very much! These are very good points!
Let me follow up on them:
1 - Cleaning cost is included in the model, I just did not list it. The guest's cleaning fee is counted in the gross revenue, and the same amount goes out to the cleaner, so it nets to zero. That's actually why I think short stays matter here - the fees make the gross look bigger without adding any profit. At 2.5-night stays, about USD 9.9k of Cabin A's 72k is cleaning cost, so the rent part is about 12.9% of the price, not 15%. For Cabin B it is about 15.8k of its 80k, so that comes to about 11.8%.
2 - The 5% was my rough blend for booking fees. If a cabin is on Airbnb's 15.5% host-only fee, it gets worse, not better: about USD 6k a year more for Cabin A.
3 - Agree. Payout reports are the first thing I would ask for, especially for Cabin B's 90%.
4 - That's a good idea, I have not checked mid-term demand there. It's weekend market far from big employers, so I would guess there is not much, but it is a quick check.
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John RacinePro Member
Rental Property Investor · Casselberry, FL · Member since 2008 · 229 posts · 115 votes
2d
@Rati Meskhishvili makes sense, and taking the cleaning out of gross is the right way to compare them. Under 13% on the rent portion is a lot thinner than the 15% headline.
One more thing for your fee line: remember Airbnb now takes its 15.5% host-only fee on all fees, including cleaning, not just the nightly rate. With 2.5-night stays and cleaning making up that much of gross, it adds up. If you end up buying one, consider adding a surcharge through your PMS or pricing platform to cover it.
Agreed on mid-term. A weekend cabin market far from big employers probably won't have much. It's still a quick check before you rule it out, because if even a couple of winter months could go to 30+ day guests, that cuts turnovers in the slowest stretch.
Curious what the sellers say when you ask for payout reports.
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Rati Meskhishvili
OP
Tbilisi, Georgia (country) · Member since 2026 · 27 posts · 7 votes
1d
@John Racine It's a good point that the 15.5% is taken on the cleaning fee too, I'll keep that in mind. To be clear, I am not buying any of these. I am running listings through the same test to see how each market looks, So I will not be asking these sellers for payout reports. But anyone who is serious about one of them should.
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Rati Meskhishvili

OP

Tbilisi, Georgia (country) · Member since 2026 · 27 posts · 7 votes

2d

@Andrew Steffens Thanks for correcting me! I had that wrong. As a break-even number it makes even more sense - Cabin A is at 15% and still about USD 6.6k short a year, and the cleaning fees and the higher property tax explain most of that gap.

@Diana Khan Thanks! That's what I assumed about the tax. Good to know it holds for Oklahoma.

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5 Broken Bow cabins for sale: none of them cash flow at the asking price

5 Broken Bow cabins for sale: none of them cash flow at the asking price

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