STR Yield
← Back to deals
MortgageCash

Rate 7.78% = 7.03% Freddie Mac 30-yr avg (Sep 24) + 0.75% investor premium

741 Chestnut Dr

741 Chestnut Dr

Gatlinburg, TN 37738

$1,199,000

2 bd · 2.5 ba · 3,105 sqft · Listed 4d ago

View on Realtor.com →
Negative cash flow

Year built

2023

Sqft

3,105

Lot sqft

20,473

HOA / mo

$47

Furnished

Yes

List date

2026-09-23T13:34:49Z

Revenue

Annual revenue

$70,424

ADR

$280

Occupancy

69%

Cleaning fees (12 mo)

$11,508

Confidence

Low (46.05), 49 comps

Comp revenue range (p25 / median / p75)

$39,302$58,565$73,885

  • Black Bear Cabin - Luxury Cabin - Gatlinburg

    2 bd · 2.5 ba · sleeps 4 · 180 ft

    Revenue —ADR $320Occ ≈ —4.8★ (37)

    AirbnbVrbo

  • "Gatlinburg Splash" 2 Bedroom Cabin

    2 bd · 2.5 ba · sleeps 4 · 226 ft

    Revenue —ADR $436Occ ≈ —4.5★ (2)

    Airbnb

  • Unreal Views! 2 Master Suites! 4 Decks! Game Room!

    2 bd · 2 ba · sleeps 6 · 328 ft

    Revenue —ADR $399Occ ≈ —5★ (269)

    AirbnbVrbo

  • "Ski Mountain Swim" 2 Bedroom Cabin

    2 bd · 3 ba · sleeps 10 · 335 ft

    Revenue —ADR $427Occ ≈ —4.5★ (10)

    AirbnbVrbo

  • Chestnut: 4 Person Special Offer

    2 bd · 2.5 ba · sleeps 4 · 492 ft

    Revenue —ADR $196Occ ≈ —5★ (23)

    Airbnb

  • MTN Views|2 King Suites|Hot Tub|Sept. Specials!

    2 bd · 2 ba · sleeps 8 · 505 ft

    Revenue —ADR $226Occ ≈ —4★ (1)

    Airbnb

  • Breathless: View•HotTub•PoolTbl•Theater•Dwood tkt

    2 bd · 2.5 ba · sleeps 4 · 0.1 mi

    Revenue —ADR $283Occ ≈ —5★ (31)

    AirbnbVrbo

  • Chestnut: Beautiful Cabin in the best area.

    2 bd · 2.5 ba · sleeps 8 · 0.1 mi

    Revenue —ADR $302Occ ≈ —5★ (415)

    AirbnbVrbo

  • Bare's End: Hot Tub • Mtn View • Free Dollywood Ticket

    2 bd · 2 ba · sleeps 4 · 0.1 mi

    Revenue —ADR $254Occ ≈ —4.9★ (82)

    AirbnbVrbo

  • Paradise Peake •PoolTable | HotTub | Epic View

    2 bd · 2.5 ba · sleeps 4 · 0.1 mi

    Revenue —ADR $277Occ ≈ —4.8★ (109)

    AirbnbVrbo

Revenue and nightly rate (ADR) are trailing-12-month figures per listing. Occupancy is estimated as revenue ÷ ADR ÷ 365 and can read high when revenue includes cleaning fees.

Cash flow calculator

Financing
Term

Rate 7.78% = 7.03% Freddie Mac 30-yr avg (Sep 24) + 0.75% investor premium

Est. revenue

$70,424

NOI

$34,112

Cash flow /mo

-$3,618

Cash needed

$347,710

Cash-on-cash

-12.5%

ROE (yr 1)

0.1%

Cap rate

2.8%

DSCR

0.44

Year-1 write-off

$258,212

Year-1 tax shield @ 32%

$82,628

Year-1 return on equity

  • Cash flow (annual)-$43,420
  • Principal paydown$7,846
  • Appreciation at%$35,970
ROE0.1%
ROE incl. year-1 tax savings (32% bracket, STR loophole)23.9%
Opex, cash-needed & tax-savings breakdown

Annual operating expenses

  • Management (20% of revenue)$14,085
  • Platform fees (3% of revenue)$2,113
  • Maintenance / capex (5% of revenue)$3,521
  • Utilities & supplies$4,200
  • HOA$564
  • Property tax$4,635
  • Insurance (STR-rated)$7,194

Cash needed to close

  • Down payment (25%)$299,750
  • Closing costs (4.0%)$47,960
  • Furnishing (conveyed with the sale)$0

Tax savings if the STR loophole applies

  • Tax shield @ 32%$82,628

Property tax, insurance rate and the land/building split come from this listing's county tax record; other assumptions match the daily feed (see tasks/plan.md).

The write-off comes from the cost segregation estimate below. Not tax advice.

Cost segregation estimate

An estimate from the listing: every part of the home is priced from national construction costs, less wear for age, and the price (less land) is spread over the parts in proportion. The headline is what a typical cost seg study would claim for this property. The answers below are optional refinements.

Depreciable basis

$1,096,000

Short-life (5/15-yr)

$256,000 · 23%

Year-1 deduction

$258,000

Year-1 tax shield @ 32%

$83,000

Land 9% (county tax record, market value split) · building $841,000 over 39 years

Based on: 3,105 sq ft, built 2023, 2 bd / 2.5 ba, furnished, listing features (hot tub, deck, patio, game room, fireplace).

IRS-guide safe-harbor floor: $150,000 in year 1 (13% short-life, $48,000 tax shield), the conservative amount following the IRS audit guide's residential classification table.

5-year property$134,700

  • Kitchen cabinetsdefault

    $12,600 new × 88% good × 1.95 allocation

    $21,600

  • Kitchen countertopsdefault

    $10,300 new × 88% good × 1.95 allocation

    $17,700

  • Decorative trimdefault

    $5,400 new × 88% good × 1.95 allocation

    $9,300

  • Mirrorsdefault

    $300 new × 75% good × 1.95 allocation

    $400

  • Shelvingdefault

    $900 new × 88% good × 1.95 allocation

    $1,500

  • Window coverings (31)default

    $7,800 new × 70% good × 1.95 allocation

    $10,600

  • Carpet, vinyl & laminate (40% of floors)default

    $8,000 new × 75% good × 1.95 allocation

    $11,700

  • Kitchen & laundry equipment plumbingdefault

    $9,800 new × 94% good × 1.95 allocation

    $18,000

  • Kitchen, laundry & data equipment electricaldefault

    $5,900 new × 94% good × 1.95 allocation

    $10,900

  • Appliances (range, microwave, dishwasher, disposal, refrigerator, washer, dryer)default

    $8,100 new × 75% good × 1.95 allocation

    $11,800

  • Hot tub (freestanding)listing

    $9,000 new × 70% good × 1.95 allocation

    $12,300

  • Furniture conveyed with the sale (used)listing

    $16,000 new × 40% good · out of the price

    $6,400

  • Game-room equipment (used)listing

    $6,000 new × 40% good · out of the price

    $2,400
15-year land improvements$120,800

  • Paving: driveway & walks (paved)default

    $11,600 new × 88% good × 1.95 allocation

    $19,800

  • Landscaping (typical)default

    $11,100 new × 88% good × 1.95 allocation

    $19,100

  • Patioslisting

    $14,000 new × 88% good × 1.95 allocation

    $24,000

  • Decks & porches (attached)listing

    $34,900 new × 85% good × 1.95 allocation

    $57,900
Building, 39-year$840,900

  • Structure: foundation, framing, walls, windows, doors, roof, interior finishesdefault

    $338,100 new × 95% good × 1.95 allocation

    $626,400

  • Building plumbing & fixturesdefault

    $35,000 new × 94% good × 1.95 allocation

    $64,200

  • Building electrical & lightingdefault

    $36,600 new × 94% good × 1.95 allocation

    $67,200

  • HVACdefault

    $35,000 new × 85% good × 1.95 allocation

    $58,000

  • Hardwood & tile floorsdefault

    $12,000 new × 88% good × 1.95 allocation

    $20,600

  • Fireplacelisting

    $2,600 new × 88% good × 1.95 allocation

    $4,500

About the property

Depreciation schedule: typical cost seg study

Year5-yr15-yrBuildingTotal
1$134,700$120,800$2,700$258,200
2$0$0$21,600$21,600
3$0$0$21,600$21,600
4$0$0$21,600$21,600
5$0$0$21,600$21,600
6+$0$0$751,900$751,900
Total$134,700$120,800$840,900$1,096,400

Model-based estimate, not an engineered cost segregation study. The IRS doesn’t approve studies; get a professional study before filing. Using these losses against W-2 income needs the short-term rental exception (average stay ≤7 days + material participation). The 39-year building life applies because stays average under 30 days, a separate test (27.5 years for a long-term rental). Federal only: Georgia disallows bonus depreciation, Ohio adds back 5/6 of it, and Tennessee has no personal income tax. Not tax advice.

Market note

STR allowed in most of Sevier County; inside Gatlinburg city limits only in overnight-rental zones.