Buying 1st Short Term Rental in The Great Smokey Mountains!

[Alan Bostick]

Hey guys! I am looking to buy my first STR in the Smokey Mountains in Tennessee this spring/ early summer, and am looking for some input from experienced owners in the area. I will be investing with an active equity partner with a price range of 400-600k. I have read and am currently re-reading the BP book on STRS.

Could you shout out some lenders that are familiar with lending on STRs? What are some of the terms I can expect being first time STR investor?

What kind of reserves are lenders looking for in a property 400-600k range? 

What average price for insurance are you experiencing right now? 

What are some mistakes you made while starting up your first STR?

Can you recommend companies to get furniture and commercial bedding that work well for you? (Is it traditional for cabins in the Smokey’s to be sold furnished?)

While this is not an all inclusive list of the questions I have, What questions have I not asked that I should be asking? (You don’t know until you know, you know?) 

I appreciate any and all information! 

[Collin Hays]

Quote from @Alan Bostick:

Hey guys! I am looking to buy my first STR in the Smokey Mountains in Tennessee this spring/ early summer, and am looking for some input from experienced owners in the area. I will be investing with an active equity partner with a price range of 400-600k. I have read and am currently re-reading the BP book on STRS.

Could you shout out some lenders that are familiar with lending on STRs? What are some of the terms I can expect being first time STR investor?

What kind of reserves are lenders looking for in a property 400-600k range? 

What average price for insurance are you experiencing right now? 

What are some mistakes you made while starting up your first STR?

Can you recommend companies to get furniture and commercial bedding that work well for you? (Is it traditional for cabins in the Smokey’s to be sold furnished?)

While this is not an all inclusive list of the questions I have, What questions have I not asked that I should be asking? (You don’t know until you know, you know?) 

I appreciate any and all information! 

 Congratulations!  

A few thoughts:

1.  Most STRs are sold fully furnished.

2.  Don’t be surprised if a bunch of it needs replacing.

3.  There are several furniture stores in the area that cater to STRs.

4.  We tend to furnish our properties with functional antiques, log beds, and hickory or other hardwood dining sets.  A lot of this can be found on Facebook marketplace for way less than new.  We only use leather in the living areas.

5.  Figure spending 1.5% of the purchase price on things that need repair that you didn’t know about.

6. Reserve 1% of the purchase price per year for repairs and maintenance.

7. Don’t rely on 2021 and 2022 rents history.  That was a bubble.  Look at 2019 and add 5% if you are feeling optimistic.