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Updated over 2 years ago on . Most recent reply

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Amber Krueger
  • Rental Property Investor
  • Madison, WI
9
Votes |
19
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STR in Gatlinburg/ Pigeon Forge/ Sevierville

Amber Krueger
  • Rental Property Investor
  • Madison, WI
Posted

I'm heading to the Gatlinburg/Pigeon Forge/ Sevierville area next week and am going to look at short term rentals while I'm there. I've listened to Avery Carl and reached out to a realtor with the Short Term Shop to set up some showings. I'm wondering if the market is saturated or if there is anything coming down the pipeline that would make it difficult to rent short term. I have a STR in Upper Michigan that is going well. Something in TN would be much higher risk in the possibility of an economic down turn due to the price point and mortgage payment. I look forward to getting down there and learning more! Any advice/experience is appreciated!

Most Popular Reply

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Collin Hays
#1 Short-Term & Vacation Rental Discussions Contributor
  • Property Manager
  • Gatlinburg, TN
3,415
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2,434
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Collin Hays
#1 Short-Term & Vacation Rental Discussions Contributor
  • Property Manager
  • Gatlinburg, TN
Replied

I have no idea about the Short Term Shop in particular, but I would definitely be consulting with folks - probably more than one -  that have been through the ups and downs in the Smokies.  The last 4 to 5 years aren't representative of reality.  It's been a massive bull market.  The Smokies are a wonderful place to invest long term, but I am talking to folks several times per week now that are in deep water; they simply didn't make deals that work when the rental market is more normal. 

It seems that everyone intended to plan for a downturn, but far underestimated the depth of the downturn when even a modest oversupply combined with decreased demand takes hold:  A decline in demand isn't necessarily linear with a decline in rents.  If there are 2000 cabins and 2100 guests looking for those cabins, rents rise substantially - there is a 5% undersupply.  Rents go up a lot more than 5% in that scenario - try 20-30%!  That is where we have been for several years.

The same is true in reverse.  Let's say supply of cabins has increased by 10% - up to 2200 cabins now - but demand has normalized - to perhaps 1800 guests looking for those cabins, you've now got competition among cabins to get those 1800 guests booked.  This is where we are approaching.  MANY cabins are sitting empty right now.  Huge cabins are sitting empty even offering $300 a night, that were renting for $600-800 a night just a year ago.  That's the truth.  Go to VRBO and take a look for yourself.

I am not a RE professional but am happy to give you my unbiased take on any property that you are looking at. I've been investing the Smokies since 2005.  My number is in my profile.  

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SMOKY MOUNTAIN FALLS INC.

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