Great real estate values in the Great Smoky Mountains
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Deborah Korlin

Deborah Korlin is the owner and principal broker of Century 21 MVP in Sevierville, Tennessee, covering real estate in the Great Smoky Mountains area.
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Have you ever thought about owning a cabin?Is owning a cabin for you?

Let’s face it – owning a cabin is not for everyone. It takes a lot of planning, work, and commitment to maneuver through the process. So, maybe you’ve thought about owning a cabin. We know they have been a great source of rental income for a lot of people, and it can be for you, too.

Are you ready to purchase a rental cabin in the Great Smoky Mountains? Let’s find out.

1) Are you are on a first name basis with Dolly –  just kidding, but what about the train operator in Dollywood?  No seriously, do you come to the Great Smoky Mountains multiple times a year and pay others to stay in their cabin?  If you answered yes, then this article is for you.

2) Have you paid off the home you live in, or have you paid it down significantly enough to provide you have what lenders call a low debt-to-income ratio? It’s easy to find out whether a lender will lend you money for a second home or an investment home. If you don’t know a lender or want to check out a few other options for lender financing, just give us a shout and we will send you the names of a few lenders that you can email or call about owning a cabin. They can quickly let you know if they would be able to make a second home loan for you.

3) Do you have a bit of cash that is not set aside in a retirement account?   The down payment on a second home or investment loan is around 10 percent to 20 percent of the amount that you are paying for the cabin.  So if you are paying $200,000 for a cabin, you will need anywhere from $20,000 to $40,000 for the down payment. It really is important for the down payment to come from discretionary funds and not from a retirement account. Though we can find you a cabin that will give you an income – owning a cabin is a means of funding retirement for many of our investors – it is best for it to be the secondary source of your retirement funds. You want the income from owning a cabin to augment and fill in your retirement financial goals, not replace the ones you have already set up for yourself. Remember, you will also have closing costs associated with the loan when you close. It’s not uncommon to ask the seller to pay some or all of those costs for you but it’s important to be aware of what those costs are.

4)  Have you and your family always dreamed of having a place that you could call your own in the Smokies? Of course, you’ve been busy taking care of that family, putting braces on kids, sending them through college, and are just now starting to see the light at the end of the tunnel. You are about to be free of some of the financial responsibilities that you have had in the past. You are in a great position to invest that money, time and energy in real estate.  If you go ahead now and make owning a cabin a part of your future, it can become a legacy and blessing for your family as you enter a new season of life.

5) Can you handle allowing others to serve your needs to take care of your investment cabin? Whether it is staining your cabin, cleaning your cabin, or treating your cabin for wood bees or pesky insects, if you don’t live here you will need to be comfortable with allowing others to help you maintain your cabin. Otherwise your happy cabin in the woods will become a burden to you and you will not be smiling when you think about it.  Here is the good news, though. We have thousands of cabins owners, so we have a whole group of honest, hard-working contractors, cleaners, pest controllers, and other service providers who make their living taking care of your investment property.  The local service industry is how many, many Sevier County residences feed their families and have a good life. We have great relationships with these folks and can give refer you to our favorite folks for every need you have.  But you do have to let them do the work or when you come on vacation you will be working all the time!  I know some of you are like me and recovering workaholics. I’m not cheery unless I have a bit of work to do.  That is okay. Enjoy doing the work when you can, but realize you still are going to need some help.  If you can accept that, you are a great candidate for owning a cabin.

Marketing_Picture-3If you were able to answer yes to the questions above, you can begin dreaming about owning a cabin.  So, let’s review. Once you have your own cabin, you can put that money into your investment purchase and start saving money on vacations. I can show you how. Also, you cannot be late on payments or have uncollected debts if you are going to qualify for a second home loan. You don’t have to be rich, but you do need to have a record of responsibility with your finances to be allowed to borrow the money you will need from the bank.

So welcome to dreaming! Next month I will show you how people succeed with their cabin investments.

In the meantime, if you have questions about owning a cabin, I would be glad to help answer them for you.

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