All Forum Posts by: Collin Hays

That is correct.  A rental history isn't that important to me if I know what the surrounding houses do. Cabins are grossly mismanaged all the time, by management companies and owners alike.  I own a management co., and will put our performance against a solo owner any day of the week.  

 Thanks Luke.  They wanted to do that fake rock stuff and I thought it would look like a homemade bar of soap, so I just ordered a bunch of rock.  Same for the fireplace.

Ken our cabins are not on stilts.  They are all above Zone X flood plain except for the two small cabins in Cosby.  There have been some massive floods since we have owned them, but never have had water in the house.  When we rebuilt in Gatlinburg, we were required by gatlinburg to raise her foundation 6 feet, which removed it from flood plain.

Ken, I have only bought properties on rivers/creeks where kids can swim, fish, and tube.  All of my cabins, there is literally a small river in the back yard.  They are extremely hard properties to find, because they aren't making any more rivers, but those are the only properties I am interested in for my purposes. 

I also want to add that I think Cosby is a value play right now in the Smokies.  Yields are very strong, and prices are significantly less than Gatlinburg.  It's a 30 minute drive.   I bought two small cabins on a river in Cosby in 2012 for $260K and everyone thought I was nuts.  Well those two cabins do in the high $50s combined per year.  I also have a much larger cabin there that I paid $240K for (way overpaid back then) in 2005, that does anywhere from $38-43 a year.  Cosby is a gem for rentals.

"Deals to be had" is a relative term. It's all about yield. I don't buy anything with the reasonable potential of an annual yield of gross rents less than 15% of the price paid for the property. I really prefer 18%. Those yields are obviously becoming increasingly difficult to find in the Smokies. However, rents-to-price in the 12% range seem to be very common. I am guessing that's still a hell of a lot better than most other STR markets in the country.

If I was looking to score a really good yield in the Smokies, I think my strategy right now would be to find a really good, unique place to build.  I had a cabin on the Roaring Fork River in Gatlinburg that burned to the ground in the Gatlinburg fires.  I was able to rebuild a super deluxe log cabin with every amenity for about $330K, and it's doing around $60-63K a year - so that's in that 18-19% range.  I wouldn't part with the cabin for almost any amount, because I can't turn around and replace that income very easily, and its value will continue to climb, given its unique location.

There are obviously thousands of cabins in the Smokies.  Many, however, are just houses, and their price appreciation potential is more limited.  If you can find really unique properties or settings - on water, amazing views, historical value, etc., you can not only have a respectable yield, but enjoy significant price appreciation.

Our numbers for May are going to be approximately what they were last May, and June has the potential to beat last June.  I think everyone was ready to get out of the house!  This is for the Gatlinburg area.

 3 bedroom, and Saturday to Saturday only.

Three nights minimum for holidays.  We also have a Smoky Mountains cabin that is strictly weekly rentals from Memorial through Labor Day.  It rents every week all summer.  We made an exception this year due to the possibility of shorter days due to Chinese virus, but will be back to that hopefully next summer.

The whole craze of STRs as a viable alternative investment for Joe Public has made finding good deals (at least my definition) in the Gatlinburg market exceedingly difficult.  There was a time that you could find properties that would yield 18-20% without too much problem. That isn’t the case any more:  Everyone who owns property knows what they’ve got and what it’s worth.  

The potential arbitrage opportunity in gatlinburg is gone.  It is unlikely I will buy more there as a result.