Help with Analysis - 1 Bedroom Cabin near Pigeon Forge TN

[Vanrith You]

Hi Everyone,

I'm looking at a property that's near Pigeon Forge. I wanted another set of eyeballs to see if this deal works.

Its a 1 bed 1 bath cabin 850 sq ft that's about 10 mins from the Island.

The price is at $475K. From AirDNA, the revenue would be about 54.5K per year, 204 night rate, and 73% occupancy.

I would be putting 10% down on a vacation home. The mortgage rate I'm getting quoted for is 7.5 or 7.6%.

I'm not sure if I'm running my number correctly, but would this deal be a net positive for me.

I feel like the numbers are close to being positive, but it could be negative if there's a lot cleaning fees.

I can share more of my numbers if anyone wants to see them.

Thanks,

Vanrith

[Ken Boone]

So roughly calculating your debt service with PMI, property taxes and insurance, you are looking at a monthly of around $3450 which takes your yearly debt service to around 41k, let's add another 1k/month for all other expense and you are now at 53k. In the current market I think it's gonna be a stretch to get 54k for a 1 bedroom. But let's say you do. Then it gets back to the why are you doing this? Are you wanting purely an investment or do you want a cabin to use yourself and just rent it out and have someone else help pay for it simply because you want a cabin? If it's an investment I would not be interested in numbers anywhere near that close. No matter what people say, there is work involved in self managing an STR. So if your numbers work out, you would be making 1k/yr based on my rough numbers which means you would be working and dealing with the debt service and other issues concerning your cabin for $83 per month. Is that worth your time? Again it gets back to your reason for making this purchase.