Cabin Purchase in Sevierville, TN

[Amit Kapoor]

I am planning to buy a large cabin in Sevierville, TN area for STR and am wondering what are the common expenses associated with owning a cabin. Can anyone please suggest?

The Goal is to find out the anticipated income Gross vs Net in best case, Worse case and average case scenarios. Trying to understand if it is really worth it. 

[Collin Hays]

Originally posted by @Amit Kapoor:

I am planning to buy a large cabin in Sevierville, TN area for STR and am wondering what are the common expenses associated with owning a cabin. Can anyone please suggest?

The Goal is to find out the anticipated income Gross vs Net in best case, Worse case and average case scenarios. Trying to understand if it is really worth it. 

A $1.75 million cabin in the Gatlinburg area, including Sevierville, is a whopper.  If you can't get $200K annual rents for that, at a bare minimum, I would look elsewhere.  And I wouldn't look at 2021 rents as much:  It was a blow-out crazy year, and will be hard to duplicate going forward.

You are going to of course have all utilities, likely HOA fees, plus property taxes and commercial insurance.  Housekeeping fees will be a pass-through item.  You will have repairs and maintenance.  Large cabins are more repairs & maintenance intensive:  They tend to host lots of people at one time - often well beyond the stated capacity, and things get torn up.  That is our experience.  So if your annual rents are $100,000, figure 5-7 percent per year on repairs and maintenance.  

If you are doing an 80/20 split with a management company, they are rent-shifting.  That is, they are loading each reservation with hefty booking fees that they don't share with you, while keeping your rents artificially low to offset the large fees.  So they are keeping MUCH more than 20 percent.  They will deny it, but you can be sure of it - I am in the business.   ;)