All Forum Posts by: Collin Hays

This was a screaming bargain, producing over $57K in rent last year. Was going to put an offer in on it when I got back home this week but too late. Literally right on the Pigeon River.  You just don’t find these any more.  Sheesh.

https://www.realtor.com/reales...

Cherokee NC isn’t going to have RE for sale unless you are Cherokee Indian.  That is a reservation.

And just because a 4br house is priced at $750K doesn’t mean it is “high”.  High relative to what?   If it produces $75K a year in rent, it’s high.  If it produces $150K a year in rent, it’s a bargain.

It’s all about the yield!

It really all depends on the investor.  Some folks want to invest and get their checks.  We have clients in TN from thousands of miles away who have seen their property maybe once.  Several are executives who aren’t interested in taking calls about not being able to get the TV to work or that there’s a snake in the dryer.

These types are glad to pay the 25% and move along.

But if you are wired in such a way that you like to get “down into the weeds” to squeeze out some of that 25%, self management is for you.

But...it’s not really a 25% savings, as when you are self managing, you likely have 12-16% in overhead on the VRBO or ABNB platforms.  

So at the most, you are saving 13-14% to self manage.  Most likely, a self manager will lose that plus some in lost bookings due to slow responses alone.

I’m not pushing management cos, but I think that self managers need to know the true cost of time and money of self managing.  I’ve done both.

All of mine are around 20-22% when factoring in tax depreciation, annual price appreciation, and net rents.

That said, a 12% return from an STR is far superior to the same return from a mutual fund, because you are using your own money to buy the mutual fund, and someone else's money to buy your STR; the guests pay for the investment.

I always prefer to let perfect strangers fund my living rather myself.  

If you could give a little more detail on what “positive cash flow” means, it would help ascertain the quality of your investments.

What are the gross annual rents on each of your STRs?

We manage about 30 properties and only charge 25%.  Most of our clients previously self managed. 

I recommend self management, but only if you have the time.  If you don’t have the time, it is false economy that you aren’t paying a management fee, as you are missing out on a significant number of bookings.

GOOD Self management is a part time job.  If you embrace that, it’s the best route financially.  If you don’t have the time, a good manager will make you substantially more money, because they DO have the time.

I also want to add, avoid limiting yourself to just pigeon forge and Gatlinburg.  There are compelling yields to be had in Cobbly Nob and even Cosby.  The annual income isn’t as high, but neither are the prices.  I can have a cabin in Vail that generates $150K a year in rents, but it the purchase price is $1.5 million, that’s not very exciting.

It’s all about the yield! 

This thread is timely, as we just had a guest complain about several things post departure from a highly rated property and they demanded compensation.  It was a 4-night stay totaling over $700.

We thought the complaints were a little over the top and were curious as to why we didn’t hear anything during their stay.  But being gracious hosts, we offered to refund them one night.  They immediately replied that they would require a full refund in order to avoid a negative review from them.

We decided that they were attempting to extort us and cut off all communication. We don’t negotiate with terrorists.  If they leave a bad review, oh well.

I own a 1 bedroom log cabin in Cosby that “only” does $27K a year.  But it only cost me $125K.

I own a 2 bedroom log cabin on Cosby that only does $32K a year.  But it only cost me $135K.

I own a 2 bedroom authentic log cabin  near downtown Gatlinburg that does $65K a year.  But it sits right on the Roaring Fork River.  If it was the same cabin on a street somewhere, you could plan on $20-25K less.

I own 4 properties, all of which are on rivers / creeks that have trout in them.  I have found that they command a premium for rent because the water is an amenity that isn’t easily duplicated.  That’s just my personal thing.

Of course you have to pay a premium for waterfront property and *might* have to have flood insurance (2 of 4 of mine do), but they aren’t building any more rivers, and I believe the price appreciation for these types of properties is greatly enhanced due to the water amenity.

Heck no!  You’ve got awesome insight.  But being a discussion forum on STRs, it would be nice to have some dialogue that isn’t “just ask Lucas Carl.”

I meant no disrespect to you.