Vacation Rental (STR)

[Jess Butikofer]

Investment Info:

Single-family residence buy & hold investment in Pigeon Forge.

Purchase price: $183,400
Cash invested: $183,400

Vacation Rental Property that has been fixed up and has been converted from 1 rental unit into 2 separate units (1 bed, 1.5 bath, sleeps 5; and a studio apt that sleeps 6) to maximize income from $38k/yr to $45-50k/yr. have 8 months under my belt so far and have endured as much or more "setbacks" as I've ever seen in all my years of land-lording (lots of appliance, A/C, idiot guests that demand refunds due to crumbs in the toaster [no joke], and the dreaded HOA Special Assessment. I am looking forward to 2019 and a full year of the vacation rental steam it brings! I am expecting/anticipating a 15-20% cap rate and am looking forward to the next property to BRRRR!

What made you interested in investing in this type of deal?

The growing demand/trend for Vacation Rentals

How did you find this deal and how did you negotiate it?

Lots and Lots and Lots of nationwide research as it was my first one. I used an agent.

How did you finance this deal?

Self-Financed

How did you add value to the deal?

Converting the property from a single rental unit (2 bed, 2.5 bath) 1,900 sq ft cabin that sleeps 11 to 2 separate units (1 bed 1.5 bath & studio apt) that sleeps 5 and 6 respectively.

What was the outcome?

In first 8 months I have matched with 2 separate units the amount of revenue that was previously 1 unit's previous 12 month income

Lessons learned? Challenges?

Vacation Rentals are high maintenance. Your Cleaners must are your "eyes and ears" and must be on the ball/have attention to detail or you will have angry guests/bad reviews. Wear/tear is much worse than long term rentals. Most Americans expect your home to be the Hilton. Like anything in life- some guests are fantastic people and renew my faith in the STR system as well as humanity, some seem like they are from another planet and have insane expectations.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Avery Carl- She was great, very helpful with my market questions/concerns and is an STR investor in the Smoky Mountains herself