Sevier County STR Investing: The Real Numbers That Actually Matter
Sevier County STR Investing: The Real Numbers That Actually Matter
Demand Is Real—But It Doesn’t Do the Work for You
If you’ve been watching the Smoky Mountain market, you already know why it keeps coming up.
In 2024, visitors generated $3.93 billion in spending in Sevier County Tennessee, and the Great Smoky Mountains National Park continues to bring in over 11 million visitors a year.
That’s real demand.
But here’s where most people get it wrong:
They assume demand guarantees performance.
It doesn’t.
There are properties in this market doing extremely well—and others that look just as good but don’t produce the same results.
That difference comes down to how the deal is structured.
This Isn’t One Market—It’s a Set of Micro-Markets
Sevier County isn’t one uniform STR market.
It behaves more like a set of micro-markets.
Gatlinburg Tennessee, Pigeon Forge Tennessee, and Sevierville Tennessee all attract different types of guests.
Some travelers prioritize park access. Others care more about attractions and convenience. Some want privacy and views.
Public STR data reflects that variation.
Across these areas, you’ll typically see occupancy in the low-to-mid 50% range and average daily rates generally in the $300+ range, depending on the property and how it’s positioned.
That tells you something important:
The location alone doesn’t make the deal. The property does.
The Numbers That Actually Matter
A lot of listings lead with projected revenue.
That’s fine—but it’s only a starting point.
What matters is what happens after the revenue.
You want to understand:
- How often it books (occupancy)
- What it can realistically charge (ADR)
- What that produces in revenue
And then:
- What it costs to operate
- What’s left after those expenses (NOI)
- What remains after debt (cash flow)
- How much room there is before things get tight (break-even occupancy)
Two properties can show similar revenue and still perform very differently once everything is accounted for.
Where Deals Start to Slip
Management is one of the easiest places for a deal to drift without being obvious upfront.
In this market, fees typically range from 10% to 25%, with 25% being on the high side.
On $100,000 in revenue, that’s a $15,000 swing between low and high management.
And that’s before:
- Cleaning
- Maintenance
- Utilities
- Insurance
- Repairs and reserves
It doesn’t mean higher management is wrong.
It just means it needs to make sense within the deal.
This Is Where Modeling Comes In
At some point, every deal has to move past “this looks good” and into actual numbers.
That’s where modeling comes in.
I use tools to break the deal down and pressure-test it—running realistic revenue, layering in actual expenses, and seeing how it performs once financing is applied.
It’s not about making things complicated.
It’s about removing guesswork.
Sometimes the numbers confirm the deal.
Sometimes they change it completely.
Either way, you’re making a decision based on reality—not projections.
Taxes Matter—And They Need to Be Modeled Correctly
Tennessee can be favorable from a tax standpoint—but only if you actually run the numbers.
Residential property is generally assessed at 25% of appraised value, and Sevier County’s 2024 tax rate is $1.48 per $100 of assessed value.
Here’s what that looks like in a real example:
Let’s say a property is appraised at $800,000.
- Assessed value = 25% → $200,000
- Tax calculation = $200,000 ÷ 100 × $1.48
- Annual county property tax ≈ $2,960
That’s just the base.
You also need to account for:
- 3% lodging tax in Sevier County
- Tennessee sales tax on short-term rentals
- Whether platforms (Airbnb/VRBO) are collecting and remitting
And one important detail:
Depending on how the property is used or classified, tax treatment can change—so assumptions should always be verified during due diligence.
The takeaway is simple:
If it’s not in the numbers, it’s not part of the decision.
Thinking Beyond One Property
If you’re building beyond a single purchase, the conversation shifts.
It’s no longer just about whether one property works.
It’s about how each property fits into a broader strategy.
Some will outperform. Some will be more stable. Some will carry more upside.
The goal isn’t to find one perfect deal.
It’s to build something that holds up over time.
Final Thought
Sevier County is still one of the strongest short-term rental markets in the country.
But it’s not as forgiving as it used to be.
The opportunity is still there—you just have to be more intentional about how you approach it.
In most cases, the difference comes down to how well the numbers are understood before the deal is ever done.
If You’re Looking at a Property
If you’re evaluating a short-term rental in Sevier County and want to understand how it actually performs once everything is accounted for—
That’s where the real decision gets made.
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