All Forum Posts by: Matt Mertz

Talk to some local builders.  One thing you'll probably discover is that you can build much cheaper than buying an existing home.

For example, we built our 3500sqft home in the Smokies for ~$285/sqft.  Good luck buying a cabin for that price now.  (We're custom building another now.)

As for the mortgage, one option is a construction loan.  We started by buying the lot with cash and owning it outright.  Then the loan required 20% down but the land value counted.  In our case, the lot was 20% of the construction cost so we didn't need to put any more cash down.  The loan had a one time closing fee and after construction was complete converted into a 30 year mortgage.

Be careful on the mortgage because ours is a 5 year ARM. But we plan on having it paid off in 5 years so it doesn't matter. You can find construction loans with standard 30 year mortgages.

During the construction process, the builder sends invoices to the bank to cover current costs and asks you to approve and then cuts a check to the builder. This process continues until the construction completes.

As for architect, be prepared to pay 10 - 25k depending on the size of the property.  In our case, it was an investment that was well worth it ($25k plan for a $1mil property that we absolutely love).

Focus your energy on vetting the builder.  I've heard so many horror stories about builders being late, delivering the wrong floorplans, shoddy work, etc.  This is the greatest risk in custom construction.

I remember when we first posted on VRBO that the initial payment took a couple of weeks during the verification stage.  After that it was faster.

Get on OwnerRez or another PMS that integrates payments with VRBO.  We have OwnerRez set up with Stripe.  Whenever a guest books thru VRBO, they forward the payment to our Stripe account and we get the funds immediately.  VRBO doesn't handle the transactions.

Similarly, we set up a direct booking site thru OwnerRez and we get those funds immediately as well.

AirBnb still handles payments on their site which is fine by us.

What do you think about UTVs (side by sides, Polaris, Kawasaki, etc) in the Smokies?  I see tons of people driving them around and it would seem like a no brainer to offer one for rent in your cabin if you had a garage.  The guest wouldn't have to pick it up in town.  They could just rent yours on site.  Other than the liability and maintenance, it seems like a great way to add revenue to your cabin, or even increase occupancy in your cabin.  Any thoughts?

We're setting up an MTR now and we're only concerned with the front door lock (Schlage Encode). 

It's the same for STRs.  You can't put a remote lock on every backdoor.  Just worry about the front door and keep the backdoor keys to yourself.

As a backup you can put a physical lockbox on the front porch for the front door (Schlage Encode) deadbolt.

I listened to a podcast recently where the manager was earning 10k a year on renting their own pontoon boat.  A used boat was 15k - 20k.  I was listening for the part that worries me: liability, but he acted like it wasn't an issue with a signed liability waiver and proper insurance.

I have a dedicated bank account for our property and during tax time it's very easy to see all the numbers related to it.

Having one escrow account receiving all the funds for multiple properties seems like a lot of work trying to categorize the different transactions.

I'm interested in one account per property because there are banks out there offering interesting solutions like Relay Bank and Baselane Bank where you can have all your separate accounts at one bank.

Thanks for the input.  I'll talk to my CPA and financial advisor.

David Carr of C&c construction of east TN is outstanding. We built a 3500sqft cabin with him in 2021 and building another small one this year. He may be too busy but worth reaching out. 

Be careful, I've heard more bad than good about building in the Smokies. 

I'm about to get a second property online and wanted to keep the two properties in separate bank accounts.  I use OwnerRez and could probably set up another Stripe account for that property that deposits directly to another bank account (and setup another payout method in Airbnb) but wondering if that's overkill.

Anyone have any advice or resources on this?

Thanks in advance.

OwnerRez/Hostfully - fully featured property management software that handles many aspects of an STR business including direct booking and payment processing.

Hospitable/ (not sure on Guesty) - lite weight channel manager with unified communication and some features. Pretty great if you only have a couple properties and don't intend to grow too large or get too deep into the STR business.