Investment Property Red Flags: Why We Decided to Not Invest in a “Perfect” Airbnb Opportunity

The experience I’m sharing comes from a property that initially seemed like a great opportunity but quickly revealed major red flags after deeper research. Like many investors, I’ve learned that not every potential short-term rental is a slam dunk. Sometimes, even when the revenue aligns with market averages, the reality of the property doesn’t make sense for long-term success.

I’ll also draw from lessons learned with our Kentucky property, a project that taught me invaluable insights into what to look for, and what to walk away from.

The Property That Seemed Perfect

The property in question was a one-bedroom, one-bathroom cabin in Bryson City, North Carolina, about five hours from our home in Raleigh and just an hour outside Asheville. Already listed on Airbnb, the cabin had steady past bookings and appeared, on the surface, to be a relatively safe, low-cost investment.

Our Raleigh realtor connected us with a trusted agent in the Asheville/Bryson City area, who provided the listing details and revenue numbers. At first glance, the income wasn’t spectacular but was consistent. To validate the data, I ran the property through AirDNA which is a platform I use frequently to benchmark performance.

According to AirDNA, the average one-bed, one-bath short-term rental in Bryson City earns about $28,000 annually. The cabin we were considering generated around $26,000 in 2024, close to the market average. With a listing price in the $165,000–$169,000 range, the numbers appeared manageable, especially since annual expenses were reported at $15,000, leaving around $11,000 in profit.

From a purely financial perspective, the deal looked low-risk. A one-bedroom, one-bathroom property also comes with lower upkeep demands, which made the idea even more attractive.

First Red Flags: Calendar and Reviews

Digging deeper, however, cracks started to show. When the agent sent over the Airbnb listing, I checked the calendar first—something I always do. Despite being listed in one of the busiest seasonal markets (the North Carolina mountains during fall foliage season), the property’s calendar was practically empty. August had only a couple of bookings, September had none, and October had just one.

For a region where guests typically book around 30 days in advance, seeing such sparse reservations for peak season was concerning.

Next, I looked at the reviews. With a 4.85-star rating, it wasn’t a disaster, but it also wasn’t the standard I hold for my own listings. Usually, low ratings come from two areas: cleanliness and communication. Both are fixable with better systems, so I wasn’t alarmed at first.

But then I read more closely. Multiple reviews mentioned the neighbor’s dogs approaching guests as they arrived and barking late into the night. While no one described the dogs as aggressive, the consistent mentions painted a clear picture: guests seeking a peaceful mountain retreat were instead dealing with nonstop noise and unexpected canine greetings.

Having dealt with enough challenges in past properties, I knew this wasn’t a problem I wanted to inherit. Asking neighbors to control their dogs would likely create long-term tension and ongoing issues. For me, that was a major red flag.

Financing Complications

By this point, I was already uneasy. But the next hurdle came with the financing. While we had the funds available to put down a 20%+ down payment, we quickly learned that the sellers were only accepting cash offers or a commercial loan.

That raised big questions. Not only did we not have $169,000 in cash on hand, but I also didn’t want to deal with the higher interest rates and potential prepayment penalties that come with commercial loans.

When we dug deeper, the reason became clear: the property didn’t have a stove or oven. While it had a cooktop, that doesn’t qualify for conventional financing. In order to get a conventional loan, a home must meet certain standards, like having a functional oven. It was a detail I hadn’t realized before, and one that immediately complicated the financing options.

Hidden Costs and Oversights

Things got murkier when we discovered that the current owner had a commercial loan on the property. Oddly, this expense was missing from the numbers we were initially provided. That meant the supposed $11,000 profit was actually wiped out by mortgage payments, leaving the property operating at a loss.

Whether it was an intentional omission or just an oversight, the lack of transparency was another red flag. Combined with the missing stove, the barking dogs, and the weak booking calendar, the picture became clear: this wasn’t a profitable or sustainable investment.

On top of all this, the region had recently been hit hard by Hurricane Helene, which significantly impacted local tourism. By mid-July, the property had only earned $8,000 for the year, with no signs of recovery for the fall season. This was theKey Lessons Learned

Looking back, the red flags seem obvious. But when you’re eager to expand your portfolio, it’s tempting to put blinders on. Here are the biggest lessons I took away from this experience:

1. Due Diligence Starts Early

You don’t need to wait until the inspection phase to spot issues. A careful look at the Airbnb listing, revenue numbers, and reviews can tell you a lot about whether a property is worth pursuing.

2. Location-Based Risks Matter

Even beautiful areas come with risks. Factors like declining tourism or natural disasters can dramatically affect occupancy and profitability.

3. Neighbor Issues Can’t Be Ignored

The guest experience starts the moment they view your listing and continues until checkout. If recurring problems, like barking dogs, are out of your control, they can ruin the experience and hurt long-term success.

4. Watch for Hidden Costs

Unexpected details, like missing appliances or the burden of a commercial loan, can drastically change the financial reality of a property. Always dig deeper into the numbers. time when it should have been at its busiest.

Walking Away Is Sometimes the Best Choice

At the end of the day, the only box this property checked was the purchase price—and even that fell apart once financing became an issue. My main goal is to build a sustainable short-term rental business with consistent cash flow. This cabin simply didn’t align with that vision.

Sometimes, walking away from a deal is the smartest move you can make.

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Real estate investing isn’t just about profit margins. It’s about sustainability, guest satisfaction, and minimizing risk. If either the long-term market potential or the guest experience is compromised, a property can quickly become more trouble than it’s worth.

And if you already own a short-term rental but want to increase occupancy, boost nightly rates, or elevate your guest experience through branding and marketing, I’d love to help. You can schedule a discovery call through the link in the show notes to learn more about how my co-hosting and branding services can take your property to the next level.

Ready to take the stress off your plate and hand the details over to an experienced co-host?