All Forum Posts by: Tim Schroeder

I understand your desire to have someone to "Take care of things". But are you willing to give away 30-40% of gross income for that peace of mind?  I manage two properties from 1500 miles away. Many people around here manage 5 or more.

On Monday a guest texted me and said the gas fireplace wouldn't work. (It's been getting worse for months and so this came as no surprise). I texted the maintenance guy, he swung by and looked at it and sent me pics (it's trashed -- controls and valves are melted beyond repair). Guest was pleased and impressed at the fast response. I went on the local Facebook cabin owners group and searched for "fireplace repair". Called the guy everyone raved about. Gave him a unique electronic door code, which I deleted the following day. Two days later I have a new gas fireplace that I haven't seen. With luck, I will never see it. Well, actually I watched him bring it in on my security cam but you get the idea. He emailed me the bill, which I paid through Paypal, then copied the receipt to Dropbox which I'll give it to my accountant next year.

All on my Smartphone: Three texts, a Facebook search, a door code app, security cam app, Paypal app, Dropbox app. I did it all from my desk at my day job. 

This property grossed about $110,000 the first year. Am I going to pay a PM $44,000 to do that for me?  No. Freaking. Way.

To be fair, it's sometimes a PITA. People call with stupid questions. They complain about stupid things, like leaves on the porch or how I should provide instructions for the remote controls. Sometimes you want to scream IT'S A CABIN IN THE MOUNTAINS YOU IDIOT -- LEAVES ARE PART OF THE DEAL!!  One guest complained that I didn't have an egg slicer. An egg slicer!?!?!  I had to google it to see what it was. I get about one "issue" a month. 

But for an extra $44,000 I can put up with a lot of dumb questions.

40*8=320+250=570 upfront.

190/mo for cable drops to 50/mo for just internet. That's 140 savings.

570/140 = 4.07 months breakeven.

After breakeven, annual savings is 1680. Call it two round-trip flights to Hawaii plus beer money.

Now you're a Ninja!

I spend $191/month for 8 TV's - cable & internet. HBO included. I actually tried to switch to streaming only. Bought a bunch of Roku sticks at $40 each, but you need very good signal and half the rooms in my cabin didn't get a good enough signal so I returned them. In cases like this: 3 floors, wood walls/floors/doors, you pretty much have to install a mesh network like Google Mesh for $250. Add the 8 Roku sticks and the initial investment would have been $570. Internet-only is at least $50 so my savings is $140/mo with a 4-month payback of the investment. When I get time, I plan to switch -- I just didn't have the mesh network ready at the time.

Here is a link to the spreadsheet and raw data

https://www.dropbox.com/s/njmdhj390hfbxtd/Book1.xl...

Ooops, formatting isn't working

This graph is interesting too.  Notice that while US house prices were tanking during the recession (or should I say causing the recession), and Pigeon Forge's lodging revenue as a whole suffered, cabin revenues were not hard hit, nor was Gatlinburg. This does not show housing price drops -- we know those were bad -- but it illustrates that rental revenue was not as hard hit as sale prices. Having said that, there were plenty of foreclosures going on so perhaps the moral of the story is make sure you have a SOLID cash flow and can ride it out.

This graph is for visitors to the national park, and says nothing about the real estate market or rental & occupancy rates. But it's a good indicator people didn't just stay home during the recession. Source: here

Thanks @Chuck Kramer I liked what you had to say since I have a couple of cabins in that area and worry sometimes about what the next recession will do to me. But my cash flow is very positive and I think I can ride it out. It's worth reiterating though for the Original Poster that converting to LTR in the Smoky Mountains is just not possible. You make your way with STR or walk, there is no fallback to LTR. So, make sure your cash flow is solid enough to handle a downturn.

No, I bought two vacation rentals in the Great Smoky Mountains, that are doing very well.

 Sure, there can always be decreases. But Colorado Springs is home to no less than FOUR military bases, and the Air Force Academy. So it's not likely you'd see the elimination of it all.