That means that there is now competition between hosts and you have to give people a reason to book your unit over another hosts.

If they want to pay $1,300/mo as is, saving you the Reno cost.

Determining the cost on something like this is only something you'll be able to find out by talking to the city.

It is your first year when you get the major tax savings windfall due to cost segregation and bonus depreciation.

To leverage the equity for financing my next deal, a second mortgage seems like a more cost-effective option.

I agree with Collin.The Smokies do have a lot of competition, so you need to have a view, decent location, good to great amenities etc to stand out.We have a 6-bedroom cabin there, but I imagine a 3 to 4 bedroom would be in the sweet spot of not too big or not too small.

Namely, that if a tenant (in this case accompanied by a whole family) ends up stop paying rent and I would be on the hook for both covering the mortgage and dealing with open ended legal costs and time.

Insurance cost for weather-related disasters is growing to a major concern in many of the southern markets.

Ignore the $1,250 per month because that's your cost of housing, if you didn't pay that on the home you'd have paid that in rent so that's a non factor. 

I would consider staying with your parents and investing in another market that stretches your dollar and covers the cost of a professional property manager.