The Tennessee housing market has been heating up lately, and if you’re interested in investing in the Smokies, consider Gatlinburg real estate.
When investing in real estate, it’s always important to analyze the real estate market you’re interested in. Knowing the real market trends and forecasts can make all the difference when making a real estate investment. It also shows you how and where to find the best investment opportunities. Today’s blog is all about Gatlinburg real estate investment. Can you really find the best investment opportunities here? Let’s see what Mashvisor’s real estate analytics have to say about that.
Gatlinburg Real Estate Market 2018
Should you invest in the Smokey Mountains of the Tennessee real estate market? Well, if you’re talking about Gatlinburg real estate, we’re going to say yes. And here’s why. Mashvisor’s investment property calculator has provided us with the most up-to-date analysis of the Gatlinburg real estate market 2018. By collecting data through reliable sources such as MLS, Airbnb, Redfin, and more, we are able to provide accurate data and valuable insights. Do you have questions about Mashvisor? Click here to read our FAQs and learn about our tools.
Now let’s get into Mashvisor’s city-level data for the Gatlinburg real estate market.
Gatlinburg Real Estate Market Summary
- Median Property Price: $300,402
- Price per Square Foot: $171
- Price to Rent Ratio: 10.44
- Average Days on Market: 141
- Monthly Traditional Rental Income: $2,674
- Monthly Airbnb Rental Income: $2,990
- Traditional Cap Rate: 5.61%
- Airbnb Cap Rate: 6.45%
- Traditional Cash on Cash Return: 5.61%
- Airbnb Cash on Cash Return: 6.45%
- Airbnb Occupancy Rate: 74%
This has got to be one of the most impressive real estate markets in the Tennessee state. Home values in Gatlinburg have gone up 2.8% over the past year. We also see that both rental strategies, traditional and Airbnb, seem to be performing well in the Gatlinburg real estate market. Airbnb Gatlinburg however, is performing at a better rate according to its higher cash on cash return, rental income, and impressive occupancy rate. Traditional rental properties aren’t too far behind though, so you can expect to make profitable investments following either strategy.
Although Airbnb investments in Gatlinburg are profitable, there is one more question that needs to be asked. Is Airbnb legal there? This is a question you should ask before buying investment property for Airbnb in any real estate market. So even if it’s the best place to invest in real estate based on the numbers, checking up on laws in that Airbnb location is still important. Let’s talk about Airbnb Gatlinburg.
Airbnb Laws and Regulations in Gatlinburg
We’ve all noticed the increase in popularity of Airbnb across the globe. And with more and more guests choosing to rent private homes over online platforms, such as Airbnb and VRBO, comes more state intervention. State and local tax authorities in Tennessee expect most vacation rental home hosts to properly collect and file sales tax on short term rentals. Sales tax is also referred to as lodging tax or occupancy tax. Tennessee is one of the more complicated states in which to manage short term vacation rental taxes, but the effort is definitely worth the rental cash flow. Airbnb regulations are stricter in bigger cities like Nashville, but Airbnb properties still perform well there. Check out Avalara for a more detailed explanation of the Tennessee vacation rental tax.
Gatlinburg Real Estate Properties for Sale
Mashvisor also has a great tool called the Property Finder. You can quickly and easily find profitable investment properties in the city of your choosing. We’ve used this tool today to locate some top-performing Gatlinburg real estate properties for you. Here are two potential Airbnb investment properties currently listed for sale in Gatlinburg.
Airbnb Investment #1
- Property Type: Single Family Residential
- Listed Property Price: $244,000
- Estimated Market Value: $268,720
- 2,045 Square Foot
- $119 per Square Foot
- Airbnb Cash on Cash Return: 12.05%
- Comparable Airbnb Rental Income: $4,524
- Airbnb Occupancy Rate: 78%
Airbnb Investment #2
- Property Type: Single Family Residential
- Listed Property Price: $165,000
- 1,144 Square Foot
- $144 per Square Foot
- Airbnb Cash on Cash Return: 12.97%
- Comparable Airbnb Rental Income: $3,314
- Airbnb Occupancy Rate: 82%
Both of these properties are very impressive and there are many more in the Gatlinburg real estate market. However, we want to show you that traditional investments also perform well in Gatlinburg, so here are two top-performing traditional investment properties.
Traditional Investment #1
- Property Type: Single Family Residential
- Listed Property Price: $209,900
- 2,525 Square Feet
- $83 per Square Foot
- Comparable Traditional Rental Income: $2,886
- Traditional Cash on Cash Return: 9.61%
Traditional investment #2
- Property Type: Single Family Residential
- Listed Property Price: $310,500
- 2,375 Square Feet
- $131 per Square Foot
- Comparable Traditional Rental Income: $3,725
- Traditional Cash on Cash Return: 8.36%
For more details on the properties mentioned and others in the Gatlinburg real estate market, click here.
Why Short Term Rentals Perform Better in the Gatlinburg Real Estate Market
Airbnb has been growing all over the world and has changed the vacation rental industry. It’s now better, faster, and easier than ever to rent with Airbnb, and that’s one of the factors driving the vacation rental industry up in even the smaller cities, such as Gatlinburg. Here are a couple of other reasons behind the surge in vacation home rentals in Gatlinburg real estate.
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Tourism Is Driving Demand
Tourism is the biggest contributor to the higher rental demand for vacation rentals in the entire region of the Smokey Mountains of Tennessee, which includes Gatlinburg, Pigeon Forge, and Sevierville. Huge attractions like the Great Smoky Mountains National Park and Dollywood, have truly made this region a year-round hot vacation spot. So the increase in tourism leads to an increase in the tenant pool, which in turn, is great news for Airbnb investors.
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Large Inventory of Vacation Homes
This region has turned into one of the most successful short term rental markets in the country. The best part is the large inventory of rental property and relatively low real estate costs. So these two points alone make the Gatlinburg real estate market one of the safest places to invest in. It’s definitely the best place to buy real estate if you’re looking for a good deal on short term rentals.
So there you have it. If you weren’t considering an investment in Gatlinburg real estate, you definitely should. Don’t forget to utilize Mashvisor’s many tools when making your next investment to ensure it is the best.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.