Blowing Rock / Boone vacation rental investments

[Julie Pedraza]

Has anyone invested in any vacation rentals in the Boone / Blowing Rock area?  If so, what kind of property have you invested in (condo, cabin, house, etc.) and have you found it to be a good investment?  And have you been able to easily rent it out for most weeks of the year?

We are in the beginning stages of considering an investment there, but interested to hear from others' experiences there.  Thanks!

[Adam Payne]

Hey Julie. My wife and I bought little cabin on about 2 acres late last year almost exactly between Boone and Blowing Rock. We had some water issues that just sorted out last week. We got listed on Air BnB last Monday, and it is looking good so far. We love the area ourselves, and we found reports of rentals like ours generating $25k - $30k, gross. We don’t have the data yet to confirm, but after listing a week ago, we have about a dozen bookings between now and the end of October. 

[Justin Branch]

My wife and I are also interested in a NC mountain house. How did you go about selecting location, home features, narrowing in on purchase / price and rental rate? Would you mind sharing the link to your rental? Any additional info is greatly appreciated. 

[Adam Payne]

Hey Justin. For us, we started looking last year with the intent of buying early in this year. However, we came across a good deal on a house we liked almost as soon as we started working with out RE agent last fall. Being less familiar with the market at that time, we decided to use an agent and take a look at what was on MLS.

We wanted a house, not a condo, and we wanted outside of city limits of Blowing Rock. We like that town, but we’re unsure of politics around short term rentals there. We tried to pick a place that we would want to use. We also wanted something that ‘looked’ like it belongs in the mountains. We really wanted a log cabin, but our cottage for the bill. The creek running by the back deck and the level, nearly 2 acre lot were just colossal bonuses we found. 

As for price, most decent houses on MLS were north of $200k, and I think that number is trending up lately. We ended up barely under that after a little bidding war with another buyer. The reason we came out so cheap, though, is because the house's water source was a spring up on the hill behind it. We ended up having a well put in, which cost us nearly $10k and 6 months of downtime. If we knew how much trouble that was going to be we would probably have paid less.

Anyway, here is the listing. We have a little work to do on pictures, and the price is still low since we just got the listing up a couple weeks ago. We hope to get our rates up over $100 a night eventually.  

https://airbnb.com/rooms/24175411?s=41&ref_device_id=7d8b3db59ac4a209ae531894c46da836c55a8617&user_id=182173185

[Julie Pedraza]

Adam -  What a cute house and beautiful piece of property!  Congratulations!  Did you buy it furnished, or did you have to furnish it yourself?  Do you have any feel for whether the vacation rental market there is relatively strong 12 months of the year, or are there slower seasons?  

Anyway, congratulations!  It looks like you got a great property, and even better that it's a place you and your wife can enjoy as well.

[Adam Payne]

Hey Julie. Thanks! We bought furnished, but we still threw out a few things and replaced. As for seasonality, we expect it to slow down a bit in the winter, but we don’t really know for sure. Right now almost all weekends are booked trough October, but no bookings after that. Again, though, we have only been on the market for a couple of weeks. 

[Justin Branch]

Adam - Thanks for sharing and information. I really like the house and it looks like a great location. It looks like a lot of activity/bookings in a short amount of time. Thanks again!

[Julie Pedraza]

@Carolyn Keefe -  Do you have any data you could share that might speak to the return one might expect on a vacation property in the Boone area?  How many weeks per year, on average, do vacation homes rent in that area?  What size of properties typically see the best returns?  Any metrics such as cash on cash return, monthly cash flow, etc. that you can share?  (preferably with professional property management given that I live over 3 hours away)  At this point, I'm just trying to wrap my mind around how an investment like this would compare to a more traditional buy & hold investment (which is what my portfolio currently consists of).  Thanks.

[Carolyn Keefe]

Hi Julie-

We have two rentals- one cost us $215k and the other was $235k. We will take in about $38,000 in rentals on the first one in West Jefferson and about $28,000 for the second, which is located in Piney Creek. On the first, we're cash flowing pretty significantly and on the second we're just at break-even. But we're selling the second (we're under contract right now). We expect to earn a profit of $43,000 after owning it for two years, which we're planning to roll in to a ski rental property in Beech Mountain. My personal experiences and in my experience helping investors buy properties in the mountains (6 under contract in the mountains right now), show me that getting a cabin in the 200-300 range, that has a view, has a creek on the property, or is on a river/lake, has at least 3 bedrooms, and two or more bathrooms, you'll do very well. This assumes the property has a mountain/cabin feel- that's actually really important.

Let me know if you would like to talk further.

[Carolyn Keefe]

Sorry, probably should have answered more of your questions- we manage our own properties since we only have two at this point. We live in Apex, NC, so we're a few hours away too. We have a good cleaning person for each house and of course, we use airbnb, vrbo, and tripadvisor. We occasionally go to the cabins to do some maintenance when they're not rented. And for bigger jobs, we contract with local people (re-staining a cabin, painting, plumbing). We rent about 175 days a year.

Our properties:

1. West Jefferson- 3br, 3ba. 1600 sq ft. Rushing creek in back.

2. Piney Creek- 4br, 3ba. 2300 sq. ft. Long range, multi-layered view.

Areas that rent well: West Jefferson, and surrounding area, Boone, Beech Mountain, Banner Elk, Blowing Rock. Not sure if any of that is a surprise. :)

One last point- I'm currently working with an investor who is transitioning from a fix and flip/ buy and hold strategy to vacation rental properties. We have 4 or 5 under contract in Piney Creek, Banner Elk, Beech Mountain. Of course, they can't full help themselves- I've also helped them put a few more properties under contract in Durham to do additional flips.

[Julie Pedraza]

Carolyn, thanks for the additional information!  That is very helpful, and good food for thought as we consider our options, and whether we may want to add a vacation rental to our mix.  Thanks again!

[Kevin B.]

Hi -  just found this thread and thought I would chime in.  

I just closed on a mountain cottage in Blowing Rock at the top of Appalachian Ski Mountain.  it is currently in a rental program with a local agency doing about $40k a year or so in gross revenue, but the agency takes roughly 25%.  it was on the higher end ($365k), but with the proximity to downtown Blowing Rock, the ski slopes, and Tweetsie Railroad amusement park, (plus it has an amazing view and 3 bedrooms), I was okay with the larger investment.

My plan was to take it out of it's currently rental program (which produced 46% occupancy total, with 10 months being in high demand), because I feel like them taking 25%+ is ridiculous.  I was going to self-manage via Airbnb/VRBO, etc., but after further consideration am planning to use Evolve who charges 12%.  I know there are downsides to Evolve but with them handling the photos, the listings, the dynamic pricing, and most importantly - the communications with guests and housekeeping, it just makes sense, as I run a full-time business and have a family, so my time is limited.  

The place is booked with the prior agency through the end of Oct., and then I break free and my journey with Evolve will begin.  If anyone is interested in how this all plays out, I will be happy to post some more and report R&E figures, etc.  (The place came furnished but I am doing some redecorating, so will be starting a little in the hole.)  

[Julie Pedraza]

Hi @Kevin B. - Thanks for chiming in! It's super helpful to read about your experience with your new vacation rental. Sounds like you got a great place in a great location. How did you find your place? Off the MLS? I agree that a 25% cut sounds outrageous! I'm not familiar with Evolve, but will be curious to hear about your experience with them.

Out of curiosity, what does your net income look like on your property?  Are you able to fully cover your mortgage payments?  (not accounting for your initial redecorating costs, etc.)

Again, really appreciate you chiming in!  The more "data points" and advice I can get from others, the more it will help to inform our decision on proceeding down a similar path.  Thanks, and best of luck to you!

[Kevin B.]

Hi Julie,

Yes, we found it on MLS. Since I am still relatively new to STR investing, I really wanted a place that had a good revenue history that would give me some assurance that there would be a demand. I knew that I (personally) loved the high country, but I wanted to make sure other people loved this particular location, etc., just as much :)

Shortly after noticing the property online, the sellers dropped the price once again, and were apparently quite motivated to sell.  I quickly viewed the property with my agent, and then requested the last 3 years of rental history from the agency, which they typically are happy to provide.  I also requested all expenses history from the listing agent/current owner.  At first glance, the numbers suggested that it would only cover the mortgage and taxes, but not the utilities or amenities.  Plus the current agency was charging cleaning fees to the owner.  

So my thinking on why I can make it cash-flow positive is two-fold:  1) Start using a service that passes the cleaning fee on to the renter (like Airbnb), and most importantly, 2) update the cottage with modern finishes and décor where the new, professional pics will attract a much higher occupancy rate.  (The current furniture and pics are quite outdated - so I have a vision of transforming the place).  

Once I finish with the light renovation I will post before and after pics.  

[Kevin B.]

The last thing I will add is I think it's worth factoring in that from Charlotte (or Apex in your case), the feasibility of using the property during some of the open calendar dates has a value, and should be taken into consideration.  Not that it isn't first and foremost an investment where the numbers need to make sense, but a handful of "free" vacation trips to the mountains throughout the year with family or friends makes the purchase a little sweeter...(as compared to a similarly performing long-term rental or stock market investment that you cannot get any personal use from).

[Julie Pedraza]

Hi Kevin! I couldn't agree more. We LOVE to getaway to the mountains as well, and really adore the Boone / Blowing Rock area. We've taken several family vacations there, including this past summer, which is what got me thinking about investing in the area. You are right in that it would also have value to our family to find a place that we could enjoy a couple times a year together. So, then the biggest question mark in my mind was net income potential, what % of the year I could expect a place to be rented, and another question in my mind is ROI in a smaller vs. medium vs. larger house. I'll begin to do more research, but in the mean time it certainly helps to learn from others' experiences.

Yes, please definitely share before and after pictures!  I'd love to see them.  It sounds like you have some really nice upside potential with your house, and how wonderful that you were able to find a motivated seller.  Thanks again for taking the time to share your experience!

[Adam Payne]

@Kevin B., thanks for sharing that. Keep us posted on how Evolve works out for you. I'm intrigued. My wife and I have a rental in Blowing Rock that we are managing ourselves, booking through AirBnB and cleaning through a local company. We are happy with our results so far, but it does take some time to manage.

@Julie Pedraza, it has been a couple of months since I chatted on this thread. Our STR is now at just shy of $10k gross for 2018, only being on the market since mid-July. We are also still listed a little below market value to build some reputation. We have bookings in November and December, but they seem a good bit less in demand than in warmer months. Then again, we also seem to get more activity at the last minute, so that could pick up some. We have found that our place attracts a lot of people coming to the area for App State activities. Also, we just had a couple reserve the entire month of August next year. We were able to meet them at the property and get comfortable with each other before they booked, and AirBnB turned out to be a good method for communication and setting that up. Anyway, I thought I would give you a little better feel for our experience so far.

[Julie Pedraza]

Thanks for the update, Adam!  Interesting to hear that you've gotten a lot of activity related to App State activities.  I hadn't though about that.  And that is amazing that you were able to rent your house for the entire month of August next year.  Sounds like you are gaining some great traction!  Thanks again for taking the time to provide an update.

[Kevin B.]

I mentioned back in Sept. that I would update the thread with my STR journey using my new Blowing Rock property.

I did close in September, honoring existing reservations through mid-October which covered my first two months of expenses. I took the remaining week of October and all of November renovating and redecorating. (Before and After slideshow here: https://animoto.com/play/CdpED0A2JXKftki6GwBYBA)

As for Evolve, once I was ready they sent a professional photographer out and had my place listed and live within a week of the shoot. Within 4 days of going live, I’ve gotten 3 reservations for 13 consecutive nights for roughly $3k in gross revenue. So far so good!  Will let you all know more of the experience with Evolve as it progresses. 

[Robert Goldman]

@Adam Payne How is your rental going in Boone? We visit there almost every year and always think about buying a place so we can stay there and then rent it out the rest of the year. 

[Adam Payne]

@Robert Goldman Our place is doing great. 2019 is already 43% booked, and its only March. We bought an old cabin, though, so we have had a lot of maintenance issues to deal with. I was just up there yesterday fixing things. It hasn't been bad enough to regret the decision to invest up there, though. My wife and I love the area, so any excuse to go up there, even to work on stuff, is fine by us. 

[Robert Goldman]

@Adam Payne That's great! I was looking up places last night and found a lot of properties, but they are more expensive than in Orlando lol.

[Adam Payne]

@Robert Goldman Yeah, you really have to analyze to know what kind of money a place will generate up there to see if it will be worth it. I wouldn't buy in that area again unless I could BRRR or just stumbled across a screaming deal. We bought cheap off of MLS and just negotiated fiendishly. The seller actually accepted another offer before we got ours in, so we made him a compelling back-up offer. It was a fight, and we still ended up sinking over $10k into the place in the first 6 months. It looks good on paper now, but our cash reserves still hurt.

[Jim Schneider]

My wife and I are looking to build on a 1.8 acre lot we own in Green Meadows Estates in Todd.  The lot extends down to the river, with our own river front access.  We love the idea of a cabin, but prefer a modern rustic look (cathedral great room, wood beams stone, wall windows looking over our view of the New River etc).  We have a number of concerns, but one is.  Do we really need to build a cabin or would a modern rustic home work?  

[Ryan Warrenburg]

My wife and I live in the Boone area and are very interested in getting into real estate investing in the area. I've been torn between buy & hold and vacation rentals, feeling like I have a harder time understanding the inconsistencies of the vacation rental market. This thread has helped quite a bit so thank you everyone who has contributed.

@Kevin B, the improvements look great, love what you did with the outdoor space. That's such a game changer up here. How has the house been performing through the ski season and spring? How has your experience with Evolve been? 

[Caroline Hardin]

@Jim Schneider I think the modern rustic look would work! I'm a Boone local and the trendy vacation spots are always booked solid.