Originally posted by @Michael C.:
Originally posted by @Collin Hays:
Originally posted by @Jay Hinrichs:
Originally posted by @Lynnette E.:
Originally posted by @Jay Hinrichs:
Originally posted by @Collin Hays:
Originally posted by @Justin Anderson:
@Collin Hays is spot on here... You need to figure out what your numbers work for you and see if you can find a deal in that price range. If you self-manage well vs use a property manager, that saves you 20 or 30% right off the top.
I would NEVER trust the numbers from existing owners as being what you'd get. They're probably selling because they don't know how to manage their listing well and aren't getting a good enough return. A good STR manager will keep occupancy at 90% and be constantly tweaking rates to max out earnings. Just imagine a bell curve of earnings and where the buyer and the seller are likely to be. I'd expect a seller to likely be on the left side of the curve and an active manager to be on the right side of the curve. That difference is probably another 20 or 30% to your bottom line as well.
Also, be careful of Airdna. It said my 1BR cabin should make 35k when it made 60k. And my 7BR should make 120k when it made 210k. (Numbers are from memory, but it's in the right ballpark)
Agreed, except for the 20-30% savings "right off the top" for self managing. We just took on a self-managing client, an attorney who lives in Cleveland, on January 1. His cabin near Gatlinburg did $19,000 last year. He was really concerned about "giving up" 25 percent, even though he admitted that he was spending more time on the property than he wanted. I told him I'd give him a free, six month test drive with us to see how it went.
We've already got $26,000 in bookings for 2021 for that cabin, and it's not even March.
So how much was he really saving by self-managing?
Penny wise, pound foolish. Pay good people to do their job, and you do yours. You'll make more money in the end.
OK you guys piqued my interest.. looks like you can buy lots for 20k to 100k why not just build new. Instead of paying for them by the income approach
Its kind of a unique area. Hardly anyone lives there and its very competitive to find people to do work. Might take a while to find people wanting to build a house and they will want top $ for the build.
sounds like an opportunity then.. I mean quick zillow search show 10 plus lots on the market and showed 300 a foot for exiting homes got to figure in todays market you can build for 150 a foot.. for instead of 600k you can be all in at 400k or so ? thats worth waiting a year for rinse repeat.
I rebuilt in Gatlinburg in 2018 for around $230 psf. I would assume it’s much higher than that today. But I think you should go for it!
Hi Collin, I hope you had a nice weekend. I'm curious what are you seeing now for new construction on a per square foot basis - we just got quote $340/sqft for a 2,500 cabin w an indoor pool. Seems extremely high based on what you did in 2018, albeit lumber/materials cost have significantly increased with covid19
Michael, it's hard to compare apples and oranges on construction costs. My cabin is a true log home, with yellow pine logs I had shipped in from British Columbia. So the materials are very high, and the labor is very cumbersome. There is no drywall to drop in an outlet here and there - all of that sort of thing has to be carefully planned. I went with top of the line windows - Andersen wood sash casement windows - so I dropped about $30K just on some windows. I also had a lot of site work that had to be done since the lot was sitting on the Roaring Fork River. Higher end stainless appliances, high end granite, stone fireplace, etc. Nothing was on the cheap. If I was building the same home today, I'm figuring it would be $500 a foot pretty easily, as timber has gone through the roof (pun intended). $600 might be closer.
As it sits in today's market, it's probably a 1 $ million home, given all of that plus the location.
