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

3407 Covemont Ln

3407 Covemont Ln

Sevierville, TN 37862

$725,000

2 bd · 2.5 ba · 1,604 sqft · Listed 2d ago

View on Realtor.com →
Rental historyEst. land %Negative cash flow

Year built

2026

Sqft

1,604

Lot sqft

17,424

HOA / mo

None

Furnished

No

List date

2026-09-25T16:48:21Z

Revenue

Annual revenue

$51,049

ADR

$214

Occupancy

65%

Cleaning fees (12 mo)

$10,259

Confidence

Med (67.3), 23 comps

Comp revenue range (p25 / median / p75)

$35,373$48,086$52,471

  • Cozy, home away from home, cabin near Pigeon Forge

    2 bd · 2 ba · sleeps 6 · 397 ft

    Revenue —ADR $175Occ ≈ —4.7★ (323)

    Airbnb

  • Sleek A-Frame Cabin | Rooftop Sun Deck & Hot Tub

    2 bd · 2 ba · sleeps 8 · 476 ft

    Revenue —ADR $310Occ ≈ —4.9★ (37)

    AirbnbVrbo

  • Smoky Mountain Breeze | Wears Valley | Hot Tub

    2 bd · 2 ba · sleeps 7 · 0.1 mi

    Revenue —ADR $212Occ ≈ —4.4★ (10)

    AirbnbVrbo

  • Hot Tub - Fire Pit - Screened Deck - Game Area

    2 bd · 2 ba · sleeps 6 · 0.1 mi

    Revenue —ADR $236Occ ≈ —4.8★ (11)

    AirbnbVrbo

  • Bold A-Frame Design, Rooftop Deck, Hot Tub

    2 bd · 2 ba · sleeps 8 · 0.2 mi

    Revenue —ADR $295Occ ≈ —4.9★ (41)

    AirbnbVrbo

  • Peaceful Smoky Mtn Cabin w/ Hot Tub, games & View!

    2 bd · 2 ba · sleeps 6 · 0.2 mi

    Revenue —ADR $235Occ ≈ —5★ (265)

    AirbnbVrbo

  • FREE Tickets-Hidden Cove Cabin-Hot Tub-Fire Pit!

    2 bd · 2 ba · sleeps 8 · 0.3 mi

    Revenue —ADR $294Occ ≈ —5★ (48)

    AirbnbVrbo

  • Fenced yard and Luxury Dog Room, Doodle Re”Treat”

    2 bd · 2.5 ba · sleeps 8 · 0.3 mi

    Revenue —ADR $358Occ ≈ —5★ (14)

    AirbnbVrbo

  • Private Luxury Apartment Smoky Mountains Jacuzzi

    2 bd · 2 ba · sleeps 4 · 0.3 mi

    Revenue —ADR $123Occ ≈ —5★ (435)

    Airbnb

  • Hot tub-Firepit-Gameroom

    2 bd · 2 ba · sleeps 10 · 0.4 mi

    Revenue —ADR $266Occ ≈ —4★ (17)

    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

$51,049

NOI

$28,157

Cash flow /mo

-$1,560

Cash needed

$226,250

Cash-on-cash

-8.3%

ROE (yr 1)

3.4%

Cap rate

3.9%

DSCR

0.60

Year-1 write-off

$163,983

Year-1 tax shield @ 32%

$52,474

Year-1 return on equity

  • Cash flow (annual)-$18,724
  • Principal paydown$4,744
  • Appreciation at%$21,750
ROE3.4%
ROE incl. year-1 tax savings (32% bracket, STR loophole)26.6%
Opex, cash-needed & tax-savings breakdown

Annual operating expenses

  • Management (20% of revenue)$10,210
  • Platform fees (3% of revenue)$1,531
  • Maintenance / capex (5% of revenue)$2,552
  • Utilities & supplies$4,200
  • HOA$0
  • Property tax$48
  • Insurance (STR-rated)$4,350

Cash needed to close

  • Down payment (25%)$181,250
  • Closing costs (4.0%)$29,000
  • Furnishing (bought new)$16,000

Tax savings if the STR loophole applies

  • Tax shield @ 32%$52,474

No county tax record split for property tax, insurance rate and the land/building split, so those use market defaults — edit the price above; 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

$616,000

Short-life (5/15-yr)

$146,000 · 24%

Year-1 deduction

$164,000

Year-1 tax shield @ 32%

$52,000

Land 15% (market default, no usable tax-record split) · building $470,000 over 39 years · new furniture $16,000

Based on: 1,604 sq ft, built 2026, 2 bd / 2.5 ba, unfurnished, listing features (deck, fireplace, appliance list, septic, wooded lot).

IRS-guide safe-harbor floor: $91,000 in year 1 (12% short-life, $29,000 tax shield), the conservative amount following the IRS audit guide's residential classification table.

5-year property$102,800

  • Kitchen cabinetsdefault

    $9,300 new × 100% good × 1.87 allocation

    $17,400

  • Kitchen countertopsdefault

    $7,600 new × 100% good × 1.87 allocation

    $14,300

  • Decorative trimdefault

    $2,800 new × 100% good × 1.87 allocation

    $5,200

  • Mirrorsdefault

    $300 new × 100% good × 1.87 allocation

    $600

  • Shelvingdefault

    $900 new × 100% good × 1.87 allocation

    $1,700

  • Window coverings (16)default

    $4,000 new × 100% good × 1.87 allocation

    $7,500

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

    $4,100 new × 100% good × 1.87 allocation

    $7,700

  • Kitchen & laundry equipment plumbingdefault

    $7,200 new × 100% good × 1.87 allocation

    $13,600

  • Kitchen, laundry & data equipment electricaldefault

    $4,400 new × 100% good × 1.87 allocation

    $8,200

  • Appliances (range, microwave, dishwasher, refrigerator)listing

    $5,700 new × 100% good × 1.87 allocation

    $10,700

  • Furniture bought newlisting

    $16,000 new × 100% good · bought separately

    $16,000
15-year land improvements$59,700

  • Paving: driveway & walks (paved)default

    $8,300 new × 100% good × 1.87 allocation

    $15,500

  • Landscaping (minimal)listing

    $4,000 new × 100% good × 1.87 allocation

    $7,500

  • Patiosdefault

    $1,600 new × 100% good × 1.87 allocation

    $3,000

  • Decks & porches (attached)listing

    $18,000 new × 100% good × 1.87 allocation

    $33,700
Building, 39-year$469,800

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

    $174,100 new × 100% good × 1.87 allocation

    $325,500

  • Building plumbing & fixturesdefault

    $18,000 new × 100% good × 1.87 allocation

    $33,700

  • Building electrical & lightingdefault

    $17,600 new × 100% good × 1.87 allocation

    $32,900

  • HVACdefault

    $18,100 new × 100% good × 1.87 allocation

    $33,800

  • Hardwood & tile floorsdefault

    $6,200 new × 100% good × 1.87 allocation

    $11,600

  • Fireplaces (2)listing

    $5,300 new × 100% good × 1.87 allocation

    $9,800

  • Septic systemlisting

    $12,000 new × 100% good × 1.87 allocation

    $22,400

About the property

Depreciation schedule: typical cost seg study

Year5-yr15-yrBuildingTotal
1$102,800$59,700$1,500$164,000
2$0$0$12,000$12,000
3$0$0$12,000$12,000
4$0$0$12,000$12,000
5$0$0$12,000$12,000
6+$0$0$420,100$420,100
Total$102,800$59,700$469,800$632,200

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.