Welcome to Business Growth Diaries! Entrepreneurship has exploded. 45% of working Americans have a side hustle! Yet, money still remains taboo.
But that’s all changing. Now more and more entrepreneurs are talking about money because it leads to better outcomes for all.
In an effort to provide personal finance insights through transparency (and share cool stories), I’ve created a series titled Business Growth Diaries that showcases how real entrepreneurs in Charlotte approach money — whether it’s a small side hustle, small business, budding real estate empire, or a fast growing startup.
Want to participate? Take the 12-question Business Growth Diaries survey.
Over the years, 38 year old mortgage professional Ryan Clay has slowly purchased a portfolio of 8 long term rental properties in Charlotte — his latest investment is a mountain cabin.
Ryan and his wife have always dreamed of owning a home in the North Carolina mountains to make memories with their family (married with 3 children) — as well as produce short term rental income.
In June of 2024, they purchased a 4 bedroom cabin in Seven Devils, just west of Boone and Blowing Rock, named S’More to Love.
- Oh, and if you’re interested in renting the property after reading this story, Ryan’s hooking up Tiny Money readers with code “Tiny” for 10% off your stay.
(1) How did you finance this mountain house purchase?
I purchased a University area condo in 2009 at 23 years old for $88,000 and sold it this past summer for $225,000 off market (allowing us to save the standard realtor commissions). The next day, we closed on this mountain house using a 1031 exchange (capital gains deferral).
We plan to either own this home for the rest of our lives, or sell it using another 1031 in the future. This will allow us to ‘trade’ up to bigger homes as our equity position increases and pass a vacation home down to our kids one day, all while protecting us from ever paying capital gains.
(2) How much was the property?
$925,000. The condo sale proceeds were our entire down payment for the mountain house, which is pretty cool.
- The home came fully renovated and furnished. We spent less than $1,000 to get it ready to rent out.
Recently, we invested an additional $30,000 into the property to strengthen its desirability and differentiate our home vs our local competition.
- Mainly retaining walls, path over to a beautiful new fire pit area, new lighting, new beds and mattresses, etc.
We love the location, interior design, and mountain view the property offers — but we are committed to investing whatever it takes to create one of the highest rated and unique homes in the NC mountains.
(3) Did it do okay with the hurricane?
We are incredibly fortunate to have not incurred any damage. Our town of Seven Devils was impacted but not nearly as much as other towns in WNC.
The response from so many North Carolinians in support of local WNC towns has been nothing short of incredible.
(4) How did you decide on nightly rates?
We selected a local management company that understands the right price points based on the current season and overall demand to maximize revenue.
- In an effort to generate momentum and bring a few 5 star reviews out of the gate, we initially priced it below market and have since normalized.
(5) Is the property profitable?
No yet. The main factors here are the high interest rate, low down payment (only the sale proceeds), and high property value.
However, as we’ve established more demand, generated 5-star reviews and normalized the nightly rent, we are inching closer to profitability.
We are also closing on a refinance that will reduce our monthly mortgage payment by $320.
It will likely take a few more years to get to profitability, but over time, I am confident that it will be our most profitable property that we own.
- 75% of our guests are from NC, so as the population in both Charlotte and NC continue to rise, so does demand for vacation homes.
- Airbnb and VRBO has done such an amazing job of normalizing this way to travel over the past 15 years, so the overall guest pool continues to rise as well. Data shows that demand growth will always outpace supply growth over time.
(6) How did you learn the short term rental (STR) space?
Podcasts I listen to include STR Unfiltered, The Art of Hospitality, Slick Talk, Behind the Stays and Short Term Rental Pros.
Books like Airbnb for Dummies and Optimize Your BNB have been helpful too.
(7) Tips for buying and running a short term rental?
Read books, listen to podcasts, visit other Airbnbs, and make a core list of how you would differentiate your home vs your local competition — all in advance of purchasing your first.
Make sure you have a heart and passion for hospitality and travel. It is more of an ‘active’ income vs passive.
Interview and select the right management company for your home. They should be experienced, local, and have a deep returning customer base that can help get you off the ground.
Avoid 3 bedroom homes – saturated supply.
There is more competition now than ever before, so you have to be passionate about the guest experience, be willing to do the work, and be patient. It takes time to slowly build.
(8) What’s next?
We plan to buy 2 more properties within the next 5 years.
- High-end 1 bedroom focused on a romantic couples retreat.
- 5+ bedroom to host large family vacations. You can really separate your home by the number of people it can sleep and amenities you provide.
(9) Anything else?
We want to make an impact and set a great example for other small businesses like ours. We have committed to donating 2% of gross rents to 4 different charities based on the month in which the guest arrives.
We hope to raise this % as we approach and surpass profitability in the next 24-36 months.
Don’t forget: Ryan’s hooking up Tiny Money readers with 10% off if they use the code “Tiny” at checkout.
Have a growing side hustle, small business, or startup? Share money stuff and take the 12-question Business Growth Diaries survey.
