With Gatlinburg, TN ranking second place on the list of top locations to buy a vacation rental property in 2019 (following Pigeon Forge), Smoky Mountain real estate is going to be a hot investment in 2020. The resurgence of traditional vacation spots has helped Airbnb Gatlinburg gain some momentum recently, and it doesn’t seem to be slowing down any time soon.
Airbnb Gatlinburg TN: Rental Property Performance
Let’s get right into it and talk about the return on investment you’d get with an Airbnb Gatlinburg vacation rental in 2020. Mashvisor’s rental property calculator analyzed Gatlinburg vacation rentals and the real estate market as a whole to give us accurate projections of rental property performance there. Take a look at the key data:
- Median Property Price: $367,262
- Price per Square Foot: $198
- Average Days on Market: 142
- Monthly Airbnb Rental Income: $3,833
- Airbnb Cash on Cash Return: 8.4%
- Airbnb Occupancy Rate: 70%
When analyzing any potential real estate market for an Airbnb investment, these are some of the top factors to consider. Looking at the monthly rental income and average cash on cash return rate, it makes sense why so many investors have their eyes set on Airbnb rental property in the Gatlinburg real estate market. Based on this Rented.com report, the Gatlinburg housing market isn’t just a popular location due to the performance of Airbnb investment property. It’s one of the few markets which will remain strong even in the face of a recession (which experts predict will hit in 2020). An economic downturn won’t affect the affordability and reliability of Gatlinburg vacation rentals. So far, Airbnb Gatlinburg is looking great. But whenever discussing the attractiveness of a potential real estate investment market, it’s crucial to consider the effect of Airbnb laws and regulations.
Gatlinburg Airbnb Laws
Nowadays, the best place to buy vacation rental property can’t just be any buzzing vacation destination with a booming tourism industry. Short-term rental regulations have been popping up in cities across the nation and have proven to really take a toll on a short-term rental investor’s bottom line. That’s why we always factor this in when discussing a strong location for an Airbnb investment. So what’s the deal with Gatlinburg Airbnb regulations?
Well, as far as regulations go, they’re considered to be the best-case scenario. The rules are quite sensible and lenient, but if you want to invest in Airbnb Gatlinburg without any hiccups, make sure to follow them. Here’s what’s required from short-term rental operators:
- Obtain a valid business license from the town
- Obtain a tourist residency permit. This is done by filling out a one-page form answering questions regarding the square footage and number of bedrooms in the rental property.
- Pay a 9.5 percent sales tax (7 percent state tax and 2.5 percent county tax)
Trends in the Gatlinburg Real Estate Market
It’s time to zone in a bit more on the other driving factors behind Gatlinburg’s success as a top vacation rental market.
Tourism Is Driving the Vacation Rental Market
The Smoky Mountains draws in around 11 million visitors annually. Clearly, this whole region is a successful housing market for vacation rental investors. With so many people flocking to the area every year, the demand for short-term rental housing has been up.
That’s pretty obvious as we’ve seen from Mashvisor’s Airbnb data; the average occupancy rate for Airbnb Gatlinburg rental properties is 70 percent. The average nightly rate vacationers pay to stay in a Gatlinburg vacation home is about $167 in the off-season and $184 in the high-season. Don’t let those terms throw you off. Gatlinburg doesn’t really have drastic seasonality trends, which is another reason why you should invest in Gatlinburg real estate. It’s been reported that 10 months out of the 12 experience high demand for short-term housing accommodation.
Demand Keeps Home Values Up
Gatlinburg home values have increased by 8.6 percent since last year. The housing market currently holds a median home value of $171,900. The Gatlinburg real estate market hasn’t just seen good fortune this year. Appreciation trends have been apparent in Gatlinburg for about ten years now. The appreciation rate over the last decade was 16.01 percent.
Popular Events Keep the People Coming
Airbnb Gatlinburg has such high occupancy for a lot of reasons. One of those reasons is the fact that the town hosts a long list of fun events for its residents and visitors throughout the year. These events really do help the tourism industry in Gatlinburg by always having something for vacationers to do. Here are a couple of upcoming popular events that people look forward to every year:
- The Gatlinburg Farmer’s Market: lasts from September 1 through October 12, where residents and visitors can enjoy healthy mountain living from local vendors
- Smoky Mountain Harvest Festival: a 12 week festival from September 6 to November 25 giving people the chance to enjoy the peak-fall season in the Smokies
- Oktoberfest: Typically starting in late September and ending in the first days of November, this festival features Bavarian-style food, drink, and music
- Gatlinburg Craftsmen’s Fair: One of the most popular events in the Southeast, this fair lasts from October 10 through 27. Highly-skilled craftsmen and artisans from all around the country come to show off their special talents and skills
- New Year’s Eve Ball Drop and Fireworks Show: Visitors can enjoy this amazing show on the Space Needle on the Gatlinburg Parkway every year
Finding the Best Rental Properties to Invest In
So Airbnb Gatlinburg is definitely a good choice for real estate investment in 2020. But finding the perfect investment property could be tricky, even in such a strong housing market. Mashvisor knows that the search for the right investment property could be overwhelming at times. For that reason, we’ve provided our users with the ultimate search tools:
- The Property Finder: will cut your search down to just a couple of minutes. You have the option to filter search results based on your criteria of what the best investment property is. Choose the budget, property type, rental strategy, and the number of bedrooms and bathrooms. In Gatlinburg, the most common type of vacation rental property is two-bedroom properties (36 percent). This is followed by one-bedroom properties (27 percent).
- The Heatmap: takes on a more interactive approach by allowing you to set the priority criteria for your search. It will highlight parts of the area based on how high or how low they score for the chosen criteria. For example, you can set the Airbnb occupancy rate as your top criteria. The best neighborhoods in Gatlinburg based on that will light up in green.