The last two years have seen an influx of buyers on Smith Lake. As the feeding frenzy is calming down and everyone is going back to schools and offices, I am seeing a lot of homes/condos hit the vacation rental market. We have gone from ~125 vacation rentals in 2000 to ~250 vacation rentals in 2022.
The impact of the combination of new rentals and everyone going back to work/school is occupancy rates closer to pre-pandemic levels. Those that enjoyed the 2001 peak season were spoiled with extremely high occupancy rates AND an extended season as a result of virtual work/school.
One other result of the inflation is an increase in nightly rates. I don\’t think this is scaring guests away but the expectations of guests have gone up with the rates. Our guests are now way more critical of properties, cleaning, etc. It has become very important to set guest expectations before they arrive as many arrive to their lower cost rental and expect all that a higher cost rental provides. So…expectations matter!
Another critical thought around owning a rental on Smith Lake is that we do not get the occupancy levels of the beach or mountains. The lake shuts down in the winter so we rarely get the snowbirds. If a rental gets over 100 nights a year it is doing extremely well where the beach/mountains see numbers over 200 nights.
I often tell prospective buyers that the perfect client is someone that WANTS to own a lake home on Smith and is wanting to offset the cost of owning the house. Pre-pandemic I used to say a vacation rental had a 5-10% ROI. Because rental rates have not increased at the same % as the cost of a property the ROI has gone down to 3-7%. Owning a vacation rental on Smith is a good diversification strategy especially when you WANT to own a lakehome.
If I can answer any questions, help you renting your home or with help you purchase a good rental…please contact me at 205.492.3211 or Jeff@SmithLakeRentals.com.
Jeff Thomas, Smith Lake Rentals and Sales