This is the number one question investors ask about the Smoky Mountains. And the honest answer is: it depends. Property size, location, condition, and how you finance the deal all change the number significantly.
But “it depends” isn’t useful. So here are real ranges based on what we see across thousands of transactions at The Short Term Shop, broken down into every cost category you need to plan for. Not just the purchase price. Everything.
Purchase Prices by Property Type and Location
The Smoky Mountains short term rental market centers around three towns in Sevier County, Tennessee: Gatlinburg, Pigeon Forge, and Sevierville. Each carries a different price tag.
Gatlinburg commands the highest prices. Its proximity to Great Smoky Mountains National Park, walkability to downtown, and strong name recognition create a premium that shows up in every listing. Pigeon Forge sits in the middle, driven by Dollywood and the Parkway attractions. Sevierville is the most affordable entry point, with newer construction, easier road access, and cabin communities specifically designed for short term rental use.
Here’s what you can expect to pay by cabin size, with ranges that reflect the variation across all three submarkets:
1 to 2 Bedroom Cabins
These are the most accessible entry point for first time investors. Prices generally range from the mid $200s to $500,000 or more. A basic 1 bedroom cabin in Sevierville might list in the $250,000 to $350,000 range. That same bedroom count in a walkable Gatlinburg location with mountain views can push well past $400,000.
3 to 4 Bedroom Cabins
This is the sweet spot for most investors. Prices typically range from $400,000 to $800,000 or more. A well located 3 bedroom with a hot tub and game room in Pigeon Forge might land around $450,000 to $550,000. Gatlinburg properties with views and premium finishes push toward $700,000 to $800,000 and beyond.
5+ Bedroom Cabins
Large cabins generate the highest gross revenue but come with the highest purchase prices. Expect $600,000 to well over $1 million depending on views, amenities, and location. Premium properties with theater rooms, indoor pools, and panoramic mountain views in Gatlinburg or Wears Valley regularly exceed $1 million.
These ranges are approximate and shift with market conditions. A cabin’s specific location within each submarket, its condition, the driveway access, and the amenity package all influence where it lands in these ranges. Our agents can provide current pricing data for the specific property type and area you’re targeting.
Down Payment: What You’ll Need in Cash
Your down payment depends on the loan type, and the differences are significant.
Conventional investment property loans require 15% to 25% down. This is the most common financing path for investors with strong W2 income.
Second home or vacation home loans can require as little as 10% down with lower interest rates, though the borrower typically needs to certify some personal use of the property.
DSCR (Debt Service Coverage Ratio) loans qualify based on the property’s projected rental income rather than your personal income. These typically require 20% to 25% down and are popular with self employed investors or those who already have multiple financed properties.
Here’s what those percentages look like in real dollars:
On a $400,000 Cabin
- 10% down (second home): $40,000
- 15% down (conventional): $60,000
- 20% down (conventional or DSCR): $80,000
- 25% down (conventional or DSCR): $100,000
On a $600,000 Cabin
- 10% down (second home): $60,000
- 15% down (conventional): $90,000
- 20% down (conventional or DSCR): $120,000
- 25% down (conventional or DSCR): $150,000
The difference between 10% and 25% down on a $600,000 cabin is $90,000 in additional upfront cash. That’s why loan type selection matters so much. The Mortgage Shop specializes in short term rental financing and can walk you through which loan products you qualify for and which makes the most sense for your situation.
Closing Costs
Closing costs in the Smoky Mountains typically run 2% to 4% of the purchase price. On a $400,000 cabin, that’s $8,000 to $16,000. On a $600,000 cabin, expect $12,000 to $24,000.
This includes lender fees, title insurance, appraisal, recording fees, prepaid taxes, and prepaid insurance. Tennessee does not have a state income tax, but there are transfer taxes at closing that factor into this range.
One cost that catches investors off guard: Sevier County Electric requires a security deposit of $1,000 or more for active short term rental accounts. It’s refundable when you close the account, but it’s cash out of pocket at setup.
Furnishing Costs
If the cabin doesn’t come furnished to guest ready standards (and many don’t), furnishing is one of the largest upfront costs after your down payment.
Budget $15,000 to $50,000 or more depending on cabin size and the quality level you’re targeting. Here’s what that covers:
- Bedroom sets for every room (beds, nightstands, dressers, linens, pillows)
- Living room furniture (couches, chairs, coffee tables, entertainment center)
- Kitchen supplies (cookware, dishes, utensils, small appliances, coffee maker)
- Hot tub if one isn’t already installed ($3,000 to $6,000)
- Game room equipment (pool table, arcade games, board games)
- Outdoor furniture (deck chairs, dining sets, fire pit seating)
- Linens (towels, sheets, mattress protectors, extra sets for turnover)
- Decor (wall art, throws, rugs, seasonal touches)
A 1 to 2 bedroom cabin on the simpler end might come in around $15,000 to $20,000. A 3 bedroom with a game room and full outdoor living space runs $25,000 to $35,000. Large 5+ bedroom cabins with theater rooms and premium finishes can easily exceed $50,000.
This is an acquisition cost, not an operating expense. But it’s real money that needs to be in your budget from day one.
Setup Costs Before Your First Guest
Beyond furnishing, there are several one time costs to get the property live and bookable:
- Professional photography: $200 to $500. This is not optional. Quality photos are one of the biggest drivers of booking rates. Cheap phone photos will cost you far more in lost bookings than a professional shoot costs upfront.
- Smart locks: $200 to $400. Keyless entry is standard for self check in. Most investors install smart locks that generate unique codes for each reservation.
- Basic supplies and consumables: $500 to $1,000. Toilet paper, paper towels, soap, cleaning products, trash bags, coffee, starter supplies, welcome basket items. These are ongoing costs, but the initial stocking run is the largest single purchase.
- Listing setup: If you’re self managing, budget time rather than money. If you’re hiring a manager, some charge a one time setup fee of $200 to $500.
Total setup costs beyond furnishing typically run $1,000 to $2,500.
Monthly Ongoing Costs
Once the cabin is live, here’s what you’ll pay every month to keep it operating. These are the expenses that determine whether your investment actually cash flows.
Mortgage Payment
This is your largest fixed monthly expense. On a $400,000 cabin with 20% down ($320,000 loan) at a 7% interest rate, your monthly payment is roughly $2,130. On a $600,000 cabin with the same terms ($480,000 loan), it’s roughly $3,195. Your actual rate and payment depend on loan type, credit score, and market conditions when you lock.
Property Taxes
Sevier County property taxes are moderate compared to most of the country. Most cabins pay $1,000 to $3,000 per year, or roughly $85 to $250 per month. Since 2023, short term rental properties in Sevier County are assessed at a 40% commercial rate instead of the 25% residential rate, so your tax bill will be higher than the previous owner’s if they used the property as a primary residence.
Insurance
Standard homeowner’s insurance won’t cover short term rental activity. You need a policy specifically designed for vacation rental use. Expect $1,500 to $3,500 per year ($125 to $290 per month) depending on cabin size, amenities, and coverage limits. Wildfire coverage is particularly important in this market after the 2016 Gatlinburg fires.
Utilities
Vacation rentals consume 2 to 3 times the utilities of a normal home. Guests leave lights on, run the hot tub constantly, and crank the heat or air conditioning.
- Electricity: $150 to $400 per month depending on cabin size and season. Winter months spike when heat pumps run continuously.
- Internet: $50 to $120 per month. Fast, reliable WiFi is non negotiable for guest satisfaction.
- Propane (if applicable): $300 to $800 per year for cabins with gas fireplaces or stoves.
- Water: Many mountain cabins have private wells, eliminating this cost. Municipal water runs $30 to $60 per month.
- Streaming services: $15 to $50 per month.
Total monthly utility costs for a typical 3 bedroom cabin run $250 to $500 depending on season.
Cleaning Costs
Every guest checkout triggers a turnover clean. Cleaning costs in the Smokies range from $125 to $250 per turnover depending on cabin size. A 3 bedroom cabin booking 150+ nights per year with an average stay of 3 nights will turn over roughly 50 times annually. At $175 per clean, that’s about $8,750 per year, or roughly $730 per month.
Most owners pass the cleaning fee through to guests, but it still affects your pricing competitiveness and total booking revenue.
Maintenance Reserve
Cabins get used hard as rental properties. Hot tubs, decks, HVAC systems, and plumbing all take a beating. Budget at least 1% to 2% of the property’s value annually as a maintenance reserve. On a $400,000 cabin, that’s $4,000 to $8,000 per year, or $330 to $670 per month.
Platform Fees
Airbnb charges approximately 3% on the host only pricing model. VRBO typically charges 5% or offers a subscription model. Booking.com takes 15%. Most Smoky Mountain operators list on multiple platforms. Budget 3% to 5% of gross revenue for platform fees.
Dynamic Pricing Tools
Tools like PriceLabs, Wheelhouse, or Beyond Pricing optimize your nightly rates based on demand, seasonality, and local events. They typically cost $20 to $50 per month per listing. The revenue they generate through better pricing almost always exceeds the subscription cost many times over.
Pest Control
Monthly pest control runs $40 to $75 per month. The mountains have bugs. This is not optional.
How Revenue Offsets These Costs
The cost side of the equation only tells half the story. Smoky Mountain cabins generate meaningful income that covers these expenses and, when purchased correctly, produces positive cash flow.
Based on current market data, Smoky Mountain short term rentals generate a wide range of revenue depending on the property and how it’s managed. Across all property types and bedroom counts, the 50th percentile (median) property generates approximately $53,656 per year, while properties at the 90th percentile bring in $120,372 or more. Some properties exceed even that. That range matters. Where your property lands on it depends on location, amenities, listing quality, and management.
Revenue also scales with bedroom count. Here’s what properties typically generate, shown as a range from the market median to what well run properties produce:
- 2 bedroom cabins: $49,195 per year at the median, with strong performers well above that
- 3 bedroom cabins: $62,821 per year at the median, with top properties pushing $80,000 to $100,000+
- 4 bedroom cabins: $83,883 per year at the median, with well managed properties exceeding $100,000
- 5 bedroom cabins: $105,233 per year at the median, with top performers clearing $120,000 to $140,000+
- 6+ bedroom cabins: $153,619 per year at the median, with the best properties generating $175,000 to $200,000+
The bedroom count numbers above represent market medians. Properties with premium locations, strong amenity packages, professional photography, and active pricing management consistently land in the upper end of each range or above.
Operating expenses typically consume 40% to 55% of gross revenue depending on whether you self manage or hire a property manager. On a 3 bedroom cabin grossing $62,000 to $100,000+ per year, self managed expenses (excluding mortgage) run roughly $25,000 to $32,000, leaving meaningful room to cover your mortgage payment and generate returns. The higher your revenue lands in that range, the stronger your cash flow.
Total Cash Needed to Get Started
Here’s a realistic all in estimate for a typical 3 bedroom cabin purchase in the Smoky Mountains, assuming a purchase price of $450,000.
| Cost Category | Low Estimate | High Estimate |
|---|---|---|
| Down payment (15% to 20%) | $67,500 | $90,000 |
| Closing costs (2% to 4%) | $9,000 | $18,000 |
| Furnishing | $25,000 | $35,000 |
| Setup costs | $1,000 | $2,500 |
| Cash reserves (3 months expenses) | $5,000 | $8,000 |
| Total Cash to Close and Launch | $107,500 | $153,500 |
For a $600,000 cabin, scale the down payment and closing costs accordingly. The furnishing and setup costs increase with size, but not proportionally to price.
That $107,000 to $153,000 range is real money. But it’s buying you an asset that generates $60,000 to $120,000+ in annual gross revenue depending on property type and management quality. Many investors see cash on cash returns of 8% to 15% when they purchase at the right price and manage actively.
Cash reserves matter. January and February are the slowest months in the Smokies, and your mortgage payment doesn’t take a winter vacation. Having 3 to 6 months of expenses in reserve protects you from the natural seasonality of this market.
Where to Start
Two resources will save you the most time and money as you evaluate the numbers:
The Mortgage Shop handles short term rental financing exclusively. They understand DSCR loans, second home classifications, and the specific underwriting requirements for investment properties in vacation rental markets. Getting pre approved with a lender who actually knows this space is the single most important first step.
The Short Term Shop has closed over 5,000 short term rental transactions and has dedicated agents who live in the Smoky Mountains. Our team can provide current pricing data, comparable revenue analysis, and realistic expense projections for the specific cabin type and submarket you’re considering. Every agent owns short term rentals themselves, so the advice is grounded in real operating experience, not theory.
The numbers in this guide give you a framework. A conversation with our team turns that framework into a specific plan.
FAQ
How much cash do I need to buy a short term rental in the Smoky Mountains?
For a typical 3 bedroom cabin, plan for $107,000 to $153,000 in total upfront cash. This includes down payment (15% to 20% of purchase price), closing costs (2% to 4%), furnishing ($25,000 to $35,000), setup costs ($1,000 to $2,500), and cash reserves. The exact number depends on your purchase price, loan type, and whether the cabin needs significant updating.
What are the monthly expenses for a Smoky Mountain cabin?
Monthly operating expenses for a 3 bedroom cabin typically include mortgage payment ($2,100 to $3,200), cleaning costs ($600 to $900), utilities ($250 to $500), insurance ($125 to $290), property taxes ($85 to $250), maintenance reserve ($330 to $670), platform fees, pest control, and a dynamic pricing tool subscription. Total monthly expenses excluding the mortgage run roughly $2,000 to $2,700 for a self managed property.
How much does it cost to furnish a short term rental cabin?
Budget $15,000 to $50,000 or more depending on cabin size and quality. A 1 to 2 bedroom cabin runs $15,000 to $20,000. A 3 bedroom with a game room and outdoor space typically costs $25,000 to $35,000. Larger 5+ bedroom cabins can exceed $50,000. This covers bedroom sets, living room furniture, kitchen supplies, linens, hot tub, game room equipment, outdoor furniture, and decor.
Are Smoky Mountain cabins profitable after all expenses?
Many Smoky Mountain cabins produce positive cash flow when purchased at realistic prices with appropriate financing. A 3 bedroom cabin generating $62,000 to $100,000+ per year (50th to 90th percentile range) with 40% to 55% going to operating expenses leaves meaningful income to cover mortgage payments and produce returns. Where your property lands in that range depends on location, amenities, listing quality, and how actively you manage pricing. The gap between a median performer and a top performer is tens of thousands of dollars per year, and most of the factors that drive that gap are within the owner’s control.
What is the cheapest way to buy a short term rental in the Smokies?
Sevierville offers the most affordable entry point, with newer cabin construction and easier road access at lower prices than Gatlinburg or Pigeon Forge. A second home loan with 10% down provides the lowest upfront cash requirement. Purchasing a 1 to 2 bedroom cabin in the mid $200s to $350,000 range with a second home loan could put you in for under $60,000 total cash at closing, though you’ll still need furnishing and reserve funds.
Who can help me find the right short term rental investment in the Smoky Mountains?
The Short Term Shop has a dedicated agent who lives in the Smoky Mountains and works exclusively with short term rental investors. With over 5,000 closed investor transactions and agents who own cabins in this market themselves, our team provides real expense data, revenue analysis, and market knowledge that generalist agents simply cannot match. Find your agent →
Ready to invest in the Smoky Mountains? The Short Term Shop has a dedicated agent who lives in the Smoky Mountains and works exclusively with short term rental investors. Find your agent →
Disclaimer: Revenue figures cited in this article are based on market-wide data from third-party analytics platforms and reflect ranges across all properties in the market. They are not projections or guarantees for any specific property. Individual property performance varies significantly based on location, condition, amenities, management quality, and market conditions. Always conduct your own due diligence before making an investment decision.