Quote from @Matthew Doyle:
So I already own a STR in a colorado ski town that does fantastic..I would buy another if I could but I want to take advantage of the 10% second home loan for my next property.
The smokies are a popular spot for this investment strategy but something I can't seem to wrap my head around is the market saturation of these cabins in the Gatlinburg area. Does anyone else see this as an issue? There seems to be 1000s of rentals of the same unit type...and they just keep building more. That compounded by the fact that there is no limitation on supply, the land seems infinite to develop.
I'm not in this for quick liquidity reasons, but do people have concerns about even selling in 10 years from now - the supply just seems to be over the top. Also how does one even enter this market as a new rental, the competition seems stiff. Are people still entering this market now (past 6 months) and having success with it?
Furthermore, are there other areas in the smokies (NC for example) that are worth considering that see similar success as gatlinburg and co?
Thanks for the advice!
As they are building more cabins, they're also building more attractions, many that appeal to a much broader range of tourists than before, and giving more people a reason to go there. Covid gave that area a huge boom. Some of it is temporary, but I also feel it made a lot of people aware of that area who previously may have never thought to go there before and now may become a regular. The nice thing about the Smokies is that it attracts a lot of families and they go every year.
I do think the prices there are still WAY too high for new investors. These cabins require a ton of upkeep and you really have to be making a lot of income and self manage to be able to cashflow. Just staining the cabin alone is like 12-15k. I own there from back when that area was cheap, but continue keep an eye on the market and rarely see new properties come up that realistically would cash flow well unless rates continue to move much higher, which I don't really see happening anytime soon. .
