Pigeon Forge Gatlinburg or Panama City Beach?

Question

Hey everyone! I finally have the cash to make a move on my first investment property and am ready to get into the game but I need some advice!
I live an hour away from the smoky mountains and have always wanted to own a cabin there, and as everyone knows it's a super hot place to try and buy in right now. I have already been outbid on one cabin that fell in my price range and since then there hasn't been a single cabin to hit the market in my price range. So I started looking in the Panama City Beach area and there is more on the market in my price range and the gross revenue I can generate seems to be close to what a cabin would generate. Only thing I haven't been able to nail down is the expenses for a condo in PCB. HOA includes a lot of utilities and cable/internet but not electricity. It seems the "operating costs" for a unit in PCB is going to cut into a decent chunk of my gross unlike a cabin would. Higher property taxes and hurricane insurance doesn't help either.
Should I keep bidding on cabins in hopes of landing one even though inventory is so low and the opportunities popping up are few and far between, or should I go ahead and put my money to work in PCB even though it’ll be a lower return? Love that the cabin would be close to home so I can do some of my own maintenance and wife could go clean it in a pinch if it was ever needed. I’d love to hear from some PCB owners on their experience! Thanks everyone!

Brittney WIlliams · Answer

We own 3 in PCB. One duplex and 2 condos. The HOA’s for the condos are less than the expanses the house has monthly when you add up trash, internet, lawn care, maintenance, gym, etc . Plus you get tons of amenities. They have done well for us the last 3 years and we love the area so much we live in one half of the duplex half the year :)

Mike Anderson · Answer

I know a way to make 15% more in one step!

Account Closed · Answer

Thanks @Joey Morea I hadn’t thought of it from the perspective of less overall maintenance to worry about. Great point. What is your strategy for slow season?

@Brittney WIlliams I’ve talked to some other condo owners in PCB that I reached out to on Airbnb and they are also performing well. The HOA for the unit I’m looking at which is a 2bdr plus bunk is $2,600 quarterly, seems so high to me but includes everything but electricity. From talking to another owner at the same resort with same floor plan they gross 45 to 55k a year.

@Avery Carl I’m working with your team in both places hoping to make a smart move!

Joshua Strickland · Answer

Account Closed where I am now looking for something at PCB and can echo the same types of concerns. I don't think there is a wrong answer between the 2 markets. The first doesn't have to be the best deal, just don't let it be the last!

John Partee · Answer

I've lived in the Panama City Beach area for 25+ years. It's over built and overrated. I'd avoid it like the plague.

Joey Morea · Answer

@Avery Carl my cabin is doing great for the year  right at 50k gross ytd with almost 2 full months blocked for Covid, but still looking for that cabin for you to find me!

@Levi Trentham

Keep in mind with those high hoa come a lot of included items. Cable, internet, water trash, insurance on exterior of building exterior maintenance. My insurance is around 600 a year for the interior which I am responsible for taxes are not that high so other then electric and your mortgage when you really add it up it’s not that much vs a single family home. I will say remote managing the condo is way easier then my other str that is single family home in Orlando. Other then hvac and water heater there is not near as much to worry about then a normal home to break. That’s a real nice benefit but I am also looking to add a cabin as well so why not get both!

Joey Morea · Answer

@Levi Trentham

My condo stays pretty full year round. Nov-feb is what they say is slow season but I still grossed like 4300 in February. January seems to be slowest. A lot of people rent to snowbirds for a reduced cost but I found that I do better just renting it like normal.

Account Closed · Answer

@Mike Anderson @Joshua Strickland I would have to agree that’s one of my concerns as well, but as the realtor put it sellers are more willing to negotiate on prices right now so you can probably get a little better deal. Start now and crawl through the slow season with a better deal when buying or wait and pay asking but not have to crawl for a couple months, tough decision lol. It definitely would be interesting trying to start off in slow season.

@Steve Cook The inventory hasn’t really been increasing all that much that I’ve seen, not at my price point anyways. I haven’t had a single cabin hit the market in my price range that was in a desirable location in the past two weeks, and the ones that have been in desirable locations that are for sale have been owned by management companies so you can’t even manage them yourself so those are automatically out for me. I’m sure one will pop up soon but it’s just a matter of getting in another bidding war and hoping for the best which isn’t ideal! But it does show how good the rental market is here! The good thing is that since they are in different markets I could take advantage of the vacation home loan twice! Woohoo!

Crystal Ball · Answer

I traveled to work in PCB for 14 years before relocating here 6 years ago. I purchased a primary residence 3 blocks from the beach, then my first condo, then opened very successful businesses that have consumed part of my real estate time. I absolutely love it here. Cost of entry is somewhat restrictive at the moment with a sudden and drastic decrease in inventory causing prices to skyrocket, partly due to the influx of people from big cities post COVID, and partly since The St. Joe Company, who developed 30A, just moved right into the middle of PCB. If you just follow the money from 30A to here... this will be THE place to be. I'm watching it happen first hand, working for a prominent 30A broker and seeing the comparison stats firsthand. HOA's are very solid in some complexes, others have some major issues. You have to account for appreciation WITH rental return numbers here - not just rental returns in our post COVID market havoc. This is also a 30A trend! :) There are still some deals popping up here and there, but you have to be ready to POUNCE when it's hot! If you love, love the mountains though - drive for dollars and make it happen there. Property management is a challenge in any market - so it does help to be close. Happy to have a more in-depth discussion sometime!

John Underwood · Answer

I think I would keep looking for the cabin and get experience managing closer to home on your first one. Then consider branching out.

Pigeon Forge Gatlinburg or Panama City Beach?

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