Hey Charles,
Congrats on getting in the game! I am an agent in North Georgia, and an investor with an STR in Ellijay, just south of Blue Ridge. You are correct that it is extremely difficult to find a cash-flowing property right now. Cost of debt is higher than usual (at least lately), and the past 2 years of appreciation has made it "expensive" to purchase.
I experienced a 52% occupancy last year, but also utilized my cabin personally a significant portion of the time so it caused me to be a little lower on the occupancy. I believe your 60% is a fair assessment. We also have a long gravel road getting to our property, so it becomes a little tough to access at times, and because of it's remoteness, it does lose power 3-4 times/year. We only charge $125/night but probably ought to be more. It's 6 acres, on a small 10-acre lake.
I did the math on your payment - are you getting a 6% interest rate on a second home? Borrowing $342,000 at 6%, 30yr fixed is amazing right now. Wow, that's impressive...is the seller buying the rate down for you? My mortgage girl is quoting much higher on a second home with 90%LTV right now.
I will say that my operating expense for my little cabin (roughly 1000sqft) is higher than $681/month. Here is the breakdown of our real expense:
Our repairs/maintenance were $514/month last year. This could've been lower by about 30%, but I chose to do a couple of upgrades that could be considered capital expenditures (Cap-ex is a term that you'll need to get familiar with!).
Our cleaning fees were $6,860/yr so $571/month.
Our utilities were $223/month.
Our expense to host on VRBO was $499/yr, so $42/month.
Insurance was $867/yr, or $72/month.
Property tax was $102/month.
That's a total expense for us of $1,524/month BEFORE debt service (your mortgage expense).
Our gross income was $23,963 for 2022, or $1996/month.
My mortgage (I refinanced a couple of years ago when the rates were low) is $654/month, so negative cash flow by -$182/month. I certainly would not want you to get negative cash flow, simply telling you what my real numbers are.
In my particular situation, the cabin is worth every penny, because I'm literally sitting in it right now, on my birthday, enjoying nature and about to go fishing with my 65 year old father. :)
Again, not advising you, but there is a part of the picture for me that also needs to be seen. That interest expense from last year (for me) was a tax deduction of $5,340 at a 29.75% tax rate = $1589 actually saved in tax dollars.
I also got a depreciation of the asset (again, for me) of $4,909, and at 29.75%, that's real money bottom line to me of $1,460 last year.
So - for me - the positive cash flow from owning the asset and having the deductions was $3,049, the negative real cash flow from operation was -$2,184, resulting in a real net positive cash flow of $865...AND I spent around 20 days at the cabin last year, allowed my dad to stay 4 nights, and donated 6 nights to charities of my choice.
I hope this was helpful to you and others. It was not meant to be prideful or anything other than just trying to be helpful and provide value to the thread, as well as help a newbie understand and see some REAL numbers. :)