And the winner is...smaller cabins!
One of the questions I get asked most often about investing in the Smoky Mountains is, "should I buy a big cabin or a small cabin?" Opinions will always vary on this, but an interesting data point provided by Rocket Mortgage shows that, in Sevier County, 3 bedroom cabins and smaller, appreciated in value at a significantly greater pace than larger cabins between 2021 and 2022:
So, if an investor had paid a total of $660,000 for two 3-bedroom cabins, the value of those today would be approximately $1.2 million. Astonishing to be sure. An 82.2 percent increase in value in a single year.
If the investor had paid $656,000 for one 5+ bedroom, the value today would be $898,000. Still a handsome return, but $300,000 short of the two smaller cabins, in one year!
Clearly, the smaller cabins are in higher demand. Consider this when you are shopping for a short term rental in the Smokies.
Comments (2)
Ken, that's a great question. I have purchased two 2-bedroom cabins in the last year, ironically both of them for $230,000. The first one that I purchased last year was in Douglas Lake. I re-sold it for $359K in July. The second cabin I purchased is in Cosby, and I paid $230K for it in April. I am guessing it is worth $400+. The name of it is Songbird of the Mountain - you can probably find it by googling that term.
So the numbers are roughly in-line with my deals in 2021, although I know prices paid are all over the map.
Collin Hays, almost 3 years ago
Hey Collin,
Is that data specific to cabins in Sevier County or is that data based on all homes sold in Sevier County which would include non rental homes as well as rental cabins? The reason I ask, is because the numbers seem very low for what I have seen for the 1 and 2 bedroom cabins. I think Jan 2021 was closer to the 400k market for a basic 2 bed cabin, and now that number seems to be closer to 500k+. So I am thinking the numbers have actually been skewed down due to including non rental homes in Sevier County as well. Just curious.
Thanks,
Ken Boone, almost 3 years ago