Smoky Mountain STR Investment Analyzer

Most DSCR lenders want to see 1.20x or better — meaning the property's net operating income covers annual debt service with 20% to spare. Some programs will fund at 1.00x to 1.15x, usually in exchange for a higher rate, a larger down payment, or additional reserves, and a handful will go below 1.00x on a "no-ratio" product at a meaningful pricing penalty.

The ratio itself is only half the story. A deal at exactly 1.20x has no cushion for a soft season or an insurance increase, and lenders calculate NOI on their own definitions — some include a management fee whether or not you plan to self-manage, and most exclude your CapEx reserve entirely. That is why this analyzer reports both DSCR and an adjusted DSCR that takes the CapEx reserve out first. The gap between those two numbers is the difference between what qualifies and what actually survives.

A DSCR loan qualifies the property. The lender underwrites the rental income against the debt and largely ignores your tax returns and debt-to-income ratio, which is why investors with several properties or heavy write-offs use them. In exchange you generally see a higher rate, 20–25% down, and a prepayment penalty.

A conventional loan qualifies you. Your income, credit, and DTI decide it, and the 1.20x coverage test simply does not apply — which means a property that "fails DSCR" can still be a perfectly financeable purchase if you can carry it. The relevant question shifts from "does it cover?" to "can I comfortably fund the shortfall every month, indefinitely?"

The analyzer scores each deal type on the metric that actually governs it. Select DSCR and it tests coverage against 1.20x. Select Conventional and it reports DSCR for reference only and judges the deal on cash flow. Select Cash and it drops the coverage test entirely and evaluates the cap rate and yield on invested capital.

Far more than the down payment, which is where most first-time cabin buyers get caught. The real number is the sum of five lines, and the analyzer totals them for you as Total Cash to Close:

• Down payment — commonly 20–25% on an investment property
• Closing costs — typically 2–4% of the purchase price
• Furnishing and setup — a real capital line on a turnkey rental, not a rounding error; it scales with bedroom count and finish tier, so get an actual quote rather than a guess
• Renovation or initial CapEx — anything the property needs before it can take a booking
• Working capital reserve — the months of carry between closing and stabilized bookings, plus a cushion for the first surprise

Leave the last three blank and your cash-on-cash return will look considerably better than it will actually be.

Use stabilized figures from comparable properties with a full twelve months of history — same bedroom count, same location tier, similar amenity set. Not the listing's best year, not a projection from a revenue estimator you have not sanity-checked, and not the number in the marketing flyer.

Sevier County is a strongly seasonal market. Fall is the peak, summer is strong, and late winter and early spring are where a thin deal goes negative. A property that produces an attractive annual average built on two enormous quarters carries very different risk than one that fills evenly, even at the same headline revenue. When you are uncertain, underwrite the conservative case and check the break-even — if the deal only works at the optimistic number, it is not a deal, it is a bet.

Also enter owner-blocked nights honestly. Every week you keep for yourself is a week of revenue the pro forma should not claim.

Because roofs, HVAC systems, hot tubs, decks, and mattresses all fail eventually, and a pro forma that ignores them is not reporting cash flow — it is reporting cash flow with the bill deferred. Short-term rentals wear out faster than long-term rentals: the turnover, the hot tub, and the guest traffic see to that.

Lenders typically calculate NOI and DSCR without the CapEx reserve, so the analyzer reports it both ways. NOI and DSCR follow the lender's convention; net cash flow and adjusted DSCR take the reserve out first. The lender's number tells you whether the loan funds. The adjusted number tells you what you will actually have left.

No. Lodging and sales taxes on a short-term rental are a pass-through paid by the guest, not an operating expense of the property, so they do not belong in the expense fields — including them would understate your return.

They do, however, belong on your compliance checklist. In Sevier County the combined burden generally runs in the neighborhood of 12–13% — state and local sales tax plus a county lodging tax, with some jurisdictions adding their own — and while platforms like Airbnb and Vrbo collect and remit the state and local sales tax automatically, the county lodging tax is typically self-remitted monthly. Rates and collection rules change; verify current requirements with the county and the city your property sits in.

In roughly the order they cause damage: the CapEx reserve, the owner-side cleaning cost (the fee you charge the guest rarely covers what you pay the cleaner, and the gap is per booking, not per night), annual permit and licensing fees, HOA and road-maintenance dues in gated resort communities, and insurance — which on a furnished mountain rental with a hot tub is not homeowner's insurance pricing.

The analyzer will warn you before it runs if the most commonly-missed fields are blank, because a blank field is treated as $0, and $0 is how a bad deal passes an underwriting screen.

Yes — and which permit depends on exactly where the property sits. Gatlinburg, Pigeon Forge, Sevierville, and unincorporated Sevier County each run their own program, with their own application, their own fee schedule, and their own renewal cycle. A cabin two miles outside the Pigeon Forge city limits is governed by the county, not the city.

Across the jurisdictions you should expect an annual life-safety inspection covering interconnected smoke alarms, carbon monoxide detectors near sleeping areas, tagged fire extinguishers, egress from bedrooms, visible street numbers, and grill placement — with sprinkler requirements kicking in on larger-occupancy homes. Fees are generally tiered by occupancy or bedroom count, and operating without a permit carries daily penalties.

Enter your actual permit cost in the STR permits & licensing field. It is a recurring annual expense, not a one-time closing item. Requirements change — confirm current rules with the specific city or the county Fire Marshal's office before you rely on them.

No. Zoning, subdivision covenants, and HOA restrictions all limit where overnight rental is permitted, and they operate independently of the permit programs — a property can be zoned correctly and still be barred by its own restrictive covenants. Resort communities built for rental use are generally safe; established residential subdivisions frequently are not.

This is a due-diligence item to resolve before you go under contract, not after. Verify zoning with the governing jurisdiction and read the recorded covenants for the specific subdivision. It is one of the first things I check on any cabin a client is considering.

Break-even occupancy is the point at which the property stops losing money — where revenue covers every operating expense and the full debt payment, and nothing more. The distance between your projected occupancy and your break-even occupancy is the deal's margin for error.

A cabin projected at 62% that breaks even at 58% has four points of cushion. One projected at 62% that breaks even at 45% has seventeen. Those two properties can show an identical cash-on-cash return and be entirely different risks. Returns tell you what happens if you are right. Break-even tells you what happens if you are wrong — which, in a seasonal market with variable insurance and a permit regime that can change, is the number worth underwriting to.

It re-runs the deal through nine scenarios and scores each one Pass, Watch, or Fail against the 1.20x coverage threshold: revenue down 10% and 20%, expenses up 10% and 20%, interest rates up 100 and 200 basis points, and two combined shocks that move revenue, expenses, and rate together.

This is close to what a lender does internally before committing, and it is the fastest way to see whether a deal is resilient — clearing coverage in every scenario — or merely fragile, which is to say it works right up until one assumption moves. A deal that passes the base case and fails four stress scenarios is not a good deal that carries some risk. It is a deal with no margin.

Yes. When you run the analysis, a formatted underwriting report is emailed to the address you enter and to me — Brandon Williams, Principal Broker at SCALE with LPT Realty — and I may follow up about the property. The report is laid out to be forwarded directly to a lender, a partner, or your CPA, and there is a Print Report button that produces a clean PDF.

Your information is not sold or shared with anyone else.