All Forum Posts by: Chuck Kramer

Thank you @Christine Heartsill, I will add you to my list of potentials for future projects.

Let me be even more accurate:

Monthly

City of Gatlinburg

     3% lodging tax (paid to you by renter)

     1.25% gross tax out of your pocket

State of TN

     9.75% sales tax (paid to you by renter)

Annually

     City of Gatlinburg TR permit fee

     City of Gatlinburg Personal property tax

     State of TN Franchise Tax

     State of TN Business Tax

     Sevier County personal property tax

And annual property tax to both Sevier County and City of Gatlinburg.

Yes. But you cannot pass the 1.25% to the renter like you do with the 9.75 + 3.

Look hard enough and you can find something that will need work, but getting contractors is difficult.

But you can find good investments if you are patient and thorough in your search. The market here is pretty hot with many listings going in less than 10 days (if they are prices reasonably).

I hope you have a good turnout. I am in Gatlinburg but cannot make it to Knoxville tonight.

@Jay Fradd is right that the Gatlinburg gross tax is 1.25%, not 1%. That’s what I get for doing a long post on my phone and not proofing it.

@Luke Carl is right, they are generally doing well. Purchase prices have gone up a lot in the last year, but there is still room to make $$ and an occasional bargain to be found.

Be sure you know if you are within city limits or not. Pigeon Forge, Gatlinburg, and Sevierville CITY have their own rules and taxes and they override the county. @Dave Homyak got it nearly perfect. Only minor item is that the lodging tax is also to be collected on ALL non-optional fees, so if you charge separately for the hot-tub (and some do) then that needs the taxes as well. If you REQUIRE guests to buy a damage-protection policy, that is part of the lodging and should also get lodging tax on it.

City of Gatlinburg also charges owners a monthly gross tax of 1% that cannot be passed to renters. Sevierville (CITY) has just voted to also add that tax next year for short-term rentals, but has not yet determined how they will collect it. Pigeon Forge City Council is voting in December on a 1.5% gross tax for short-term rentals as well. Pay attention to your jurisdiction.

Make sure you have the right business licenses. Remember, there are city licenses, county licenses, and state licenses. Cost is minimal at around $15 or so.

Its also worth noting that Tennessee has both a business tax and an excise/franchise tax. With the end of the year coming up, be sure you are registered for both.

Its also worth paying attention to what is going on at the state level. Tennessee is trying to increase tax revenue from STR and now is pushing to get sales tax on damage policies and other fees that guests pay when booking. Some companies like AirBnB may take care of this for you if/when it happens, but the bottom line is that the state will hold the homeowner responsible for it. So just be aware and ensure it is getting taken care of. They also recently allocated $4.5M to the audit group to increase audits of sales taxes paid. So if you do a lot of Amazon or shipping-in of items, just know that Tenn wants their use tax on those things if you didn't already pay it on purchase. There is even a line on the TNTAP sales tax submission forms for you to self-report.

@Account Closed - I have used Devin Koester for a "sticky" situation also involving future rental funds. I thought he did well. He also owns Tennessee Land Title, one of the busiest in the area. You can PM me if you need the number. Feel free to mention I referred them.

Avery is, as usually, spot on that rental funds are not part of the contract UNLESS you add language concerning disposition of funds, responsibilities for future rentals and the liabilities that come with them, etc.

@Luke Carl - You are right. One thing I wanted to add was ALWAYS check the zoning on your local property to ensure that you can indeed do a short-term rental. That is incumbent on the buyer. It would also be a good idea to teach local news archives (Google) or local government information (City, County, etc) to get an idea for whether any changes are coming that might affect the viability of a short-term rental. 

Of course, like the OP and a few other news items in the last week, there are always those that will skirt regulations and cast a dark cloud on all short-term rentals in the process.

@Luke Carl - didn't mean to correct necessarily. No offense intended. Wholly agreed. Mailing address does not equate to being within a city and I would guess that about 50% of all rentals are NOT inside Gatlinburg, Pigeon Forge, or Sevierville city limits. I like all 3 areas, just coincidence that our properties are in Gatlinburg. Of the 4, one is not within city limits. I have looked at, and continue to look avidly at properties all over Sevier County. In fact, we have just made offers in on 1 in Wears Valley (with a Sevierville address), another near Pittman Center (also a Sevierville address). We also added 3 lots to the portfolio in the last 3 months that we plan to build on. One in Gatlinburg and the other two just outside Pigeon Forge.