NASHVILLE, Tenn. (WKRN) – Investors are heading East, buying or building property in Gatlinburg and Pigeon Forge to rent out.
Data shows short-term rental occupancy levels in that area have skyrocketed, ranking 2nd for the market for new short-term rental listings over the last couple of years.
“Because there is more demand, people can charge a higher price,” said Pam Knudsen, Senior Director of Compliance at Avalara.
Avalara is the first and only tax collection and remittance software used by Airbnb, VRBO, HomeAway, and virtually every major regional and national vacation rental platform.
Investors are taking note of the growth. The owner of Stony Brook Cabins showed News 2’s sister station WATE, a new 7,000 square foot Bluff Mountain rental home with 8 bedrooms and 7 baths – costing $2.5 million.
If you book it for the week before Christmas, with all of the extra fees and taxes, it will cost you roughly $14,000.
“The average growth rental revenue is a little over $47,000 so it’s really one of those things that say this is a good market to get into because it’s growing and affordable and everything else at this point and time,” Knudsen said.
Short-term rentals in Gatlinburg and Pigeon Forge have grown more than 19% over the last two years.
“People are starting to look and say ‘hey, can I do this potentially with my second home’ or ‘can I now afford to get a second home because I can rent it out for a big chunk of the year to help pay for it and offset it’,” Knudsen said.
According to data from AirDNA, there are nearly 4,000 active rentals in Gatlinburg. That same data shows there are just over 6,000 in all of Davidson County.
Nationally, demand for trips in September was 4.7% higher than in 2019 and 33.7% higher than the same time last year. Short-term rental rates and occupancy levels are supposed to increase even more over this holiday season.
“Holidays are a hot time of the year, they are getting super booked,” said Knudsen. “If you haven’t booked it already you may not find a place.”
And if you do, expect to pay a pretty penny. The high levels of booking activity have pushed rates even higher for this holiday season. Overall ADRs are at about $346 a night for Thanksgiving weekend and $415 a night for the week of Christmas through New Year’s Eve. These rates are 30% higher than guests were paying in 2019.