Pursuing VR in Asheville/Brevard, North Carolina...any advice?

Question

We are actively looking for a vacation rental cabin in the Asheville/Brevard, NC area...although we're scouting as far west as Highlands and as far east as Little Switzerland. Would prefer to be in Brevard area, but sometimes you have to expand your geographic parameters to find the best opportunities...good thing is that unlike most urban areas...just about anywhere from Highlands to Mt. Mitchell is simply stunning and a vacation haven for rentals.

An unrenovated cabin anywhere in this area with a great mountain or water views can easily command $250-$300/night and up. We're mostly interested in a SFH mountain cabin, rather than a condo (although always open to a multi!).

But have a few questions for the locals, folks that know the area or have invested in VR thereabouts...

--First and most importantly...generally speaking, when are peak rental seasons and how many weeks per year can a good mountain cabin be expected to rent in the area? I understand that the rental seasons may be longer around Asheville/Brevard, than in Highlands/Cashiers given the more mild climate? This is obviously location and property specific, but we're working with partial numbers so far...let's assume you'd want to stay in the cabin on vacation:) If we find a place for $300k with 25% down at 5% interest, conduct $50k of value-add rehab...renting it 12 weeks/year breaks the project even on a cash-flow basis incorporating all costs. We'd need 20 rented weeks/year or ~$3400/month to see double-digit COC...is this realistic?

--What specifically do vacationers look for in the Blue Ridge? Smaller traditional wood cabins lost in the forests or larger more renovated "HGTV" cottages on paved roads, views, hot tubs, proximity to town/amenities (and micro-brews!), close access to National Parks, golf, fishing, rivers/lakes, bicycles, canoes, boats...et al? Again, obviously depends on the renters, but what are some trends and most popular requests owners/investors are seeing more recently?

--Noticed that many communities have HOA restrictions, mostly for road maintenance...but several restrict weekly rentals as well. Which towns or areas between Highlands and Mt Mitchell in particular, are especially cabin rental friendly, with great views and property? The hills east of Brevard looking back at the Blue Ridge for example are awesome (we drove and rode the entire area...did an 80-mile bike ride one day!), but many neighborhoods like Sylvan, The Reserve and Straus Park in town restrict rentals via HOA. Same goes for much of Highlands.

--We'd prefer the property be passive and property managed...while this certainly eats into profit (I've already budgeted this into the calcs outlined above), this has worked quite well at our other VR, but we have a great PM. Any recommendations for great Property Management outfits in the area that we should consider? Same goes for GC's while we're at it...if anyone has any great recommendations...always like to give the business to the right folks.

Welcome any and all advice...thanks much in advance! Christian

Kyle H. · Answer

@Amy OsterbergThanks for the links, some great information there.@Christian CasconeI live in Bryson City which is a little farther west than your target area but still shares a lot of similarities with your target areas. My partner and I currently self manage two airbnb rentals in downtown Bryson City and are building a spec home/turnkey rental property in an equestrian development outside of town, and are closing on a property at the end of the month where we will be building 4 vacation rentals on the river here in town. When we initially stepped out from our custom home building business into the investing space we focused on long term rentals. On our first property we also built our first vaction rental and we have now shifted our focus due to the higher margins we were finding on our vacation rental. Our area and the areas you are targeting are highly sought after rental locations. We are seeing strong demand in our area about 9 months of the year. March is usually one of our strongest months and the remainder of the year until September is booked consistently. We have a small lull in September which gives way to our leaf season traffic, which is very busy and we are able to command higher prices through the end of October. Here in Bryson City we have the Great Smoky Mtn. RailRoad which runs the childrens train the "Polar Express" through the end of the year and keeps town very busy with some 70k plus visitors.I would echo most of what Amy had to say about the biggest factors to consider for a mountain rental would be accesability, view, hot tub, fire pits and lastly we have seen a shift from people wanting to be remote to being closer to town. I would also say that finding a good property manager is worth some extra effort, it can literally make or break your investment.Here are some pics from our new build, we did a joint venture with our friend who is a property manager here in town. We will list property for sale/turnkey rental but will also hold as a rental if it doesn't sell. We are running our numbers off a 50k gross rent, however similar cabins are doing in the neighborhood of 60-65k gross.

Amy Osterberg · Answer

I've got one vacation rental in FL and am working to buy one in the NC mountains. We live in Charlotte so my target is Blowing Rock/Boone for convenience to Charlotte, skiing in the winter, cooler temps in the summer, etc. It's very beautiful in all those areas. In my research, for renters - I see the most demand for views, easy access - a road that does not require 4 wheel drive in winter, fire pits and hot tubs. This vacation rental area has exploded - so there are now quite a few cool tools to see what you can expect for rates and occupancy by address or zip code - just do some web surfing and you'll be amazed. https://www.airdna.co/region/us/north-carolinaThis site has a lot of info too: http://www.rented.com/ultimateguide/This one has a calculator to estimate income - I was surprised at low occupancy (28% for Blowing Rock/Boone vs. about 70% in Florida)... https://www.airvestor.com/airestimator/But I think Asheville would be better. Definitely check out the legality of short term rentals where you are buying... that issue is my nightmare right now in FL - where the city only pursues short term rentals based on neighbor complaints. Thousands exist but I live next door to Mrs. Kravitz.

Josh Stack · Answer

@Parker Borofsky @Robert OmbresHey Ya'll,Wolf Laurel has a ski resort in the development, as far as I know, the only one in the area directly north of Asheville. There is also easy Appalachian Trail access and lots to do within the community if you have golfing and amenities access. It's easy and quick to get into Asheville so provides a good mix of being away from it but being close to it feel.As far as I know, there are no real restrictions on short term rentals in Madison/Yancey. Madison County does come to inspect short term rentals and also a tax(es) of 11.75% applies on rentals less than 90 days. The Wolf Laurel HOA/POA doesn't have any restrictions that I'm aware of. Asheville is another story as Robert pointed out.There are more and more year round residents in Wolf Laurel in the last couple years so it is possible to get permanent renters there. As many who know greater Asheville well will note, it's a very hot market. Some anecdotal evidence - speaking to the gal at Lowe's who was cutting keys for me in Weaverville, she said finding anything south of $1200 for a 2/1 was tough and on retail salary she is priced out of the market. She said she has seen trailers on a half acre of land going for $1000/month. My contractor has a rental in Mars Hill, he turned it over, put it on Craigslist and had 60 calls in an hour with people offering over asking price to rent it.The local property managers take a 35% management fee on short term rentals and ask for a 20% management fee on long term rentals. I talked to several property managers in Asheville and the going rate seems to be 10% but, aside from the local company, I have not found any who will manage properties as far north as above Mars Hill.I have decided to make my rental a long term rental and save the short term rental headaches. My cabin is also positioned in a weird spot marketing wise, it would not do well as a short term rental as it's not fancy or equipped for family and not large enough and not the right long distance views to compete with the higher end properties. At the lower end, most people will choose villas in the area. I still have baseboard heating so even though the ski season would get good utilization, the economics don't work with the inefficient heating setup.French Broad (local power co) is running a program to sell ductless split unit heat pumps at cost and will finance them. This is becoming a popular option for cabins in the area to install, much more efficient than the baseboard heating many have and more practical than installing a propane system.My place: https://post.craigslist.org/k/tqTJaAlD6BGJPAqtBO1S...

Parker Borofsky · Answer

@Josh Stack I have a friend from Asheville and she tells me that there are a ton of restrictions on STR's in/around town, do you know if this is the case?If so, is this why Wolf Laurel is attractive or because it is a development that allows this?

Christian Cascone · Answer

Sounds good...quite a bit of potential across the Blue Ridge. Perhaps not as much appreciative value as in some other areas, but tons of cash-flow opportunities. @Luke Gronski Be sure to try the Elk steak at The Grand Bohemian once you get to Asheville...place is amazing!

Parker Borofsky · Answer

Fantastic info @Josh Stack thank you!

Robert Ombres · Answer

Wolf Laurel is attractive because of the proximity to ski resort and Asheville. I tend to believe closer to Asheville is more attractive year round however.

Robert Ombres · Answer

Hi all. I'm a Realtor in Asheville.Here, STRs stay booked. I see 80% occupancy year round. No advertising and listed only on airbnb. Asheville has restrictions on STRs so you need to be outside of city limits or risk $500/day fines.Boone is a great place to visit. I went AppState and love the area. Boone doesn't get the visitors Asheville gets and is more seasonal. Asheville is 365.If you're looking for a vacation rental investment property in WNC, Asheville and Brevard areas are going to be tough to beat.

Josh Stack · Answer

Hey @Christian Cascone,If you are still looking to invest, you may want to check out the Wolf Laurel development. I can hook you up with a local realtor if you are interested. Wolf Laurel is just a half hour north of Asheville so it's very well located to have a deep in the mountains feel but be close to the city attractions of Asheville.

Luke G. · Answer

Christian Cascone thank you for the restaurant recommendation. I think I love food more than passive income so I will definitely try it out!