All Forum Posts by: Ken Boone

Been doing it for a few years now with multiple properties.  The main items - need to find local cleaner and backup and good handyman and backup - people you can trust.  They will be your eyes and ears.  Keep in mind, they will make mistakes, forget things sometimes, just like we would if we did that job every day.  So just expect that some things will happen and it will just be a cost of doing business.  I like visiting mine however, they are very hard to get into because they are booked non stop.  Depending on what is going on in my life, I decide whether or not I want to visit to perhaps do a repair or I can choose to pay a handyman to do it.  If I pay a handyman it is completely hands off.  BTW.. I make that decision not based on how much it is going to cost, because most repair costs are negligible compared to the income it generates.  I make that decision based on IF I want to do it.  For instance I will be heading up soon to change out a deck railing to an updated style.  Most folks would probably pay some one to do it but I shut the cabin down for 2 days so I can enjoy it and do the project myself because I want to.  Not because I have to.

After trustworthy cleaner and handyman with backups - you need to set up a few things to help you out. - i.e. digital door locks, wifi controlled thermostats, ring camera on the exterior entrance.  Those kinds of things.

I recommend doing it.

 Congrats man!  That is exciting.  I have one in Wears Valley as well and I love it.

Go see David at Arcade Headquarters in Sevierville.  He is the best!

Uh you tell them to take it or you get new house cleaners.

@Kyler J Sloan This is an investment forum. People come to this forum specifically for STR investment advice and strategies. Usually with the premise that they are trying to maximize cash flow. So that is how most people are going to respond to these posts with these topics. Again, as I said if you just want this property mainly for your own use and you want to use it as a side hustle to generate some extra cash then that is great. No problems with that at all. If that makes you happy by all means do it. I really mean that.

However, if you are seeking advice on this being a great investment STR (which you may not be)- it is not. The reason so many people tried to make an offer on this is because of the buying frenzy for STRs that has been going on over the last couple years. Lots of bidders doesn't make it a good investment during this buying frenzy.

Look sure there is liability like others have said - but insurance can help you with that. It's all the headache man that comes with this place. Two years ago, my HOA had about .2 miles of the road paved, which was the last .2 miles up to one of my cabins. The cost was 80k. The price has gone up since. So paving the road is an expensive option. It's the bad reviews and irate guests and the 11pm phone calls from guests that are going to drive you crazy.

A good investment should give you a good return on your money with little stress, little work, etc..  This is most definitely not the case with this property.  I promise you - you will be constantly working on this road.    Again, now you stated you won't rent it when you are there.  If that is the case, you are also cutting down cash flow - the more we learn about this place the less opportunity for cash flow we find.  

So we get back to this - if you want this property because you want it and you just want to try to earn some side cash to help pay for it that's great.  If you are buying it for a great investment - its not - there are far better properties for STRs.  

But the more I hear about this I am thinking you are just trying to validate can you do airbnb with this property. The answer is yes no problem. Will it be a great cash flowing STR - dunno. Will it have a bunch of headaches - absolutely. Is this a great investment - no there are far better ones out there.

You want to get to the bottom of why it is a bad idea - again this is coming from the perspective of whether or not this is a good investment.

#1 - Far better cash flowing properties available that won't have all the headaches that this one will have.

#2 - You are right in the sense that what makes this one unique is it's view - but to get the higher rental rates that has to be combined with other things - amenities - accessibility to name a few.  This is lacking in accessibility.

#3 - You don't fully understand the issues with guests driving up these roads.  My mountain top cabin has wide freshly paved roads and I still get comments that guests were scared to death coming up the road (even though my daughter's Toyota Prius can get up it without going into lower gear).  With your road being gravel and one lane wide, some guests are going to freak out.  Like someone else said on your jeep post.  They will crap when they see it.  Guests crapping means unhappy guests - no review or bad review.  Bad reviews reflect poorly on future booking potential.

#4 - The road will take a lot of maintenance - Maintenance costs money - More money spent on expenses lowers ROI.

#5 - You will have guest stranded - more headache - more cost to help situation - lowers ROI and guest satisfaction.

#6 - You might find it hard to find contractors to work up there.

#7 - Don't know how you can effectively rent it just when you are not there?  You need to open up your calendar for bookings.  Will you know a year out when you will be there or when you won't be there?   What happens if you need to be there but its already booked?

#8 - Back to the road - you get a washout from a summer rain storm and guests can't get up there. Then you can't get someone to fix it for a couple of days.  You can have all the people lined up ahead of time - but things happen.  Then more headache.

I am sure there are a few that I am missing, but with the exception of #7, I can find STR properties in that region that will produce great cash flow and not have to deal with items 1-6, and 8. So given that, the only reason to purchase that property would be for personal interest and not necessarily an investment.

Again, just trying like others to give you sound advice.  What you do with it is solely up to you.

@Peter Amendola In the end, neither option is wrong.  You just have to go with what you are more comfortable with.

@Peter Amendola So this is one of those questions that is different for each person.  On my first, I actually put more down, I was more nervous and wanted a lower monthly payment and less debt.  Since then, I have put down the minimum.  To grow your portfolio you need cash for down payments.  So like you said if you put less down, you have more cash ready for the next one. In hindsight I wish I would have done my first one that way.  I am not concerned with how much interest I will pay over time, because, my properties create enough cash flow that it just doesn't matter that much to me, plus the interest offsets the gains some for taxes.  I don't think this changes if you are going to LTR.  Now having said that, that is just my thoughts on it, and there are several different thoughts on this and some might suggest going with the second option for equally good reasons.

@Peter Amendola Wish you the best man!

@Kyler J Sloan Ok man. This is getting to be like the jeep thread now when all the details start coming out. Again, I still don't know if you already bought this property or are in the process. It would make a nice private cabin for someone. If you are trying to have a great cash flowing STR - not being mean here - just trying to give you advice - your plan stinks dude. Just trying to be blunt with you.

One of your big deals is privacy - Now we find out you will be there most weekends.  Well there goes the privacy factor cause you will need to disclose this info.  No way I am taking my wife and girls to a secluded cabin on a mountain top with not very good access and have someone else that I know nothing about there.  On the weekends no less which should be 100% booked through the year on a normal basis.  This type of airbnb scenario is not this market.  That strategy is one for the cities dude not the smokies.

Again not if there is an issue - when there is an issue would be the correct term - there will be issues.

Your intuition is flat wrong. This property with that road and you living there on the weekend makes this a BAD STR choice for the Smokies. Just about all the great views in that area will have steep roads and switchbacks. But there are plenty that are PAVED with guard rails and maintained - not one lane gravel that you have to maintain.

So again, if the main use is for your personal use and you just want to try and make a few extra bucks great.  But it is hard to tell what you are trying to accomplish.  Your heading says new to real estate and you started this post with not familiar with the roads in the TN mtns, yet you don't sound like you want to take seriously what anyone says.  I have helped a number of people with property up there and the thing is to mentor someone, someone has to be able to hear what others are saying.

It sounds like you want the property and jeep for yourself and you are trying to figure out a way to have someone else pay for those things and if that is the case - thats great more power to you.  You don't really sound like someone who is looking for investment advice.  I really do wish you the best with this property.  Just trying to provide you with good advice if you have not purchased the property yet.

@Peter Amendola So your question about what drives up daily rates - first of all you have to compare apples to apples here. So yes more beds brings the rates up.. i.e. typically a 3 bedroom STR will have a higher rate than a 2 bedroom STR. Now comparing say 2 bed STRs in your area - amenities is the main driver. In my location I have primary 2 bedroom cabins and I have them loaded with amenities. I perform as well or better than most 4 bedroom cabins in my area because of the amenities. You are in the keys man! So aside from the options I have thrown out as far as what to have in the property, you can also look at other things, providing fishing poles and tackle, providing snorkling gear, providing paddle boards, etc.. Now if you do the paddle board thing, may want to check with your insurance company just to be safe with that.