The Great Smoky Mountains are one of the best markets for real estate investing: ideal for both first-time investors and experienced owners looking to add to their portfolios. No matter your budget or investment goals, here are some helpful tips for a profitable STR investment:
1. Run the numbers first.
You may fall in love with a property and assume that because it’s beautiful, the numbers will automatically work. However, this is a common mistake that can cost you. Projected revenue can also be misleading, especially for new construction that has no previous rental history. You’ll need to create a realistic analysis that includes:
- Property taxes/insurance
- Property management fees
- Cleaning and maintenance
- Utilities, repairs, and furnishing costs
- Expected occupancy and average daily rate
Read More: Biggest Mistakes STR Investors Make & How to Avoid Them
2. Narrow down your market research.
Already decided on property size and location? Or perhaps you’re considering putting in an offer on a cabin: Another thing to consider during your market analysis is collecting specific data rather than location averages. Instead of comparing across all cabin rentals in Gatlinburg or Pigeon Forge, you’ll want to look at similar properties with the size, amenities, location, and views.
Why does this matter? Market data varies considerably depending on these factors and influences projected income and ROI.
3. Buy for location, not just views.
As land decreases in abundance, real estate listings increase in value, making it extra important to look beyond mountain views. Accessibility, proximity, and privacy are becoming more of a deciding factor for repeat bookings: think road conditions, parking, and winter accessibility plus distance to attractions, restaurants, and hiking trails.
4. Look for amenities that help you compete.
Special features are what take your STR investment from average to high-performing. Amenities that differentiate your property from others include:
- Hot tubs and indoor pools
- Fire pits and outdoor dining spaces
- Game rooms and home theaters
- EV charging stations
- Pet-friendly accommodations
You should also consider the type of travel group you want your property to attract and then adjust details accordingly: a romantic, cozy cabin for couples, mid-size cabin with lots of entertainment options for families, or a large cabin with luxury amenities for groups, reunions, and weddings.
5. Budget for slow seasons.
Another pitfall for first-time STR investors to avoid is not budgeting for slower seasons. In the Smokies, maximum occupancy during July, October, and holiday weekends is common, but your budget and investment model shouldn’t rely on peak-season bookings alone.
6. Prioritize the overall guest experience.
Short-term rentals are more than just a real estate investment; they’re a hospitality business that requires constant attention and communication. A pristine property can underperform if the listing photos/information, cleanliness, furnishings, bookings, and check-in procedures are lacking.
Invest with Confidence: Partner with Local Realty Group
Our real estate agency is here to help you find the perfect STR investment. Browse all of our investment properties in the Smoky Mountains, including Sevierville, Pigeon Forge, and Gatlinburg. In addition to cabins and condos, you can also find raw land, commercial properties, and other homes for sale!
