Stars in the Smokies still viable investment?

Question

I'm interested in STR's in the smokies (Gatlinburg, Pigeon Forge, Sevierville areas).

I'd like to hear from any other investors in this area currently. Is the smokies still a viable area to invest in STR's as of January 2022 considering the average house price? Or is it better to just keep it on the radar for now and wait for the market to (hopefully) cool? What's a realistic ROI for the area right now? I know that can be very variable depending on things such as location, size and management.

I believe the smokies will always be a good vacation rental area for occupancy, but the current market there doesn't seem to make sense from a cashflow perspective at the moment.

I look forward to hearing from anybody that would like to chime in.

Edit: Autocorrect is the worst, title should be "STR's in the Smokies still viable investment?"

Collin Hays · Answer

I try not to look at macro trends when making a very micro investment decision.  You can make a great deal in the worst STR market in the U.S., or a horrible deal in the hottest market.

I found two fantastic deals in the smokies in 2021.  Will there be more such deals in 2022,23, or 24?  Who knows.I talked to a gentleman recently who said “well I don’t really want to wait very long…I’d like to buy something now.”

Well ok then…you’re probably getting ready to make a very poor deal for yourself.  But at least you’ll do so soon!

Collin Hays · Answer

Kyle, “insane” is a relative term.  If you look at prices in other mountain resorts. Vail, Tahoe, Telluride, etc.  The Smokies are still in the bargain basement.

Now, are you going to score the same deal and yield that you could have 3 years ago? Nope.  But that doesn’t mean it’s expensive , relatively speaking.

Luke Carl · Answer

I’m only buy stars near Jupiter

Joshua Strickland · Answer

Makes sense to me. I’m starting another build in March so I believe in it.

I think there are some interesting characteristics between the Smokies and the national housing market. Smokies had a fire in 2016 that destroyed the supply. Housing market had Covid and builders stop building. Now that demand is back, both are booming. It should take years before building catches up with demand in both the national housing market and the Smokies. Add in the influx of people moving to the southeast which doesn’t seem to be slowing down and you have the makings of a great market.

But what about recession? We’ll if there is another recession the Smokies are still more affordable than flying to Hawaii or Aspen, going to Disney, or many other vacations.

Joshua Strickland · Answer

@Kyle Marcrum Be careful what you wish for with new construction. Developers doing spec builds are selling them as fast as they come on the market and at double the cost to build per square foot. Not blaming them or saying they aren't worth it. If you buy land and are lucky enough to find a builder for your own design you will have an insane amount of equity once its completed, but the building process is challenging to say the least.

John Underwood · Answer

I've been looking and making offers but haven't got anything yet.

Haven't had much realtor help. They just want to put me on a list to get automated listings. Not very helpful.

Need an off market deal on a cabin or land so I can get rolling.

Ryan Moyer · Answer

Wait...you typed all of that out on your phone?

Jabbar Adesada · Answer

@Kyle Marcrum

RUN AWAY NO DEALS HERE haha bought Oct. 2021 pretty happy so far

Wilson Hunter · Answer

Ditto Collin’s post. You’re not buying the whole market, you’re buying one cabin, and I’m confident it’s still an incredible area to find an awesome STR. From what I can see there’s no easy mode market for STRs anywhere in the US right now unless you have a low bar for return.

Kyle Marcrum · Answer

@Collin H. I agree with you, you should never jump into something before you've done the research to make sure it makes sense from a number perspective, that's just asking to get burnt.

From what I've been seeing the asking price for a lot of these properties has gotten INSANE to the point where a two or three bed cabin wouldn't be able to cashflow well at current prices.

I love the smokies area and I'm actively searching for opportunities in the area. @Joshua Strickland may have the right idea and the way to go at the moment is new construction.

Stars in the Smokies still viable investment?

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