Our featured “Cabin of the Month” for June is a great investment property in Gatlinburg!
You can learn more about this investment property here.
If you’ve ever thought about ways to increase your rental income, this topic about indoor swimming pools is for you.
One of the things we do to help our cabin owners in maximizing the return on their investment is to keep up with the trends and amenities that are the most appealing in our clients’ best rentals. And one of those things that we are finding to be successful more and more are indoor swimming pools at the cabins in our area. Indoor swimming pools are the latest and greatest amenity for investment cabins. At first glance, that sounds absolutely dreadful. However, before you say no to the idea, let’s talk about what makes indoor swimming pools so attractive to renters.
Let’s start with one of the most apparent truths about rental cabins in the Smokies: any cabin can, and does, rent throughout the summer months, our most popular time of the year for obvious reasons. Kids are out of school and people are vacationing. Dollywood is open. The National Park is holding all kinds of workshops. It’s not commonly known, but it’s true: if you have a cabin that you are renting out to vacationers, then you know you can pretty much count on people to stay at your cabin during the summer. Therefore, if you are an investor, you really never have to be too concerned with amenities like outdoor or community pools as being important to offer guests in the summer time.
The game for increasing investment revenues is to fill in the calendar. You need guests to stay at your cabin during the non-peak months in order to reach that revenue gap that really makes your investment profitable. Indoor pools make that possible. In the first few months of the year when it is cold, snowing or raining, and people just don’t want to go out to do anything, an indoor swimming pool provides hours of fun for your guests. Cabins with indoor swimming pools will attract guests who might not have even made the trip otherwise. What a cool thing for people to be able to stay in a cabin with an indoor pool!
So, let’s look at how indoor swimming pools affect your income.
You’re adding bookings in the winter time, bookings in September before the leaves start to change, and bookings during spring break. These are bookings you probably wouldn’t have had otherwise. It gets you past the unpredictability. In addition to the increased number of bookings, you’re also able to charge a little more for the added amenity. Owners of one to four bedroom cabins who have indoor pools are seeing gross rental income amounts of $20,000 to $30,000 more than owners of similar sized cabins without pools are earning.
How much does it cost? Well, if your cabin can be remodeled to include an indoor swimming pool, the cost to install it starts at about $30,000 and go up to $150,000. You will have some additional expenses each year, such as insurance on the pool (you’ll need to shop around for that, as not everyone offers that coverage) and there will be costs for cleaning that you can pass onto your guests. So the best news is that depending on the amount you would spend to put a pool in, it should pay for itself within just a few years. And if you ever decide to sell your cabin, the pool will increase its resale value.
Before you put an indoor swimming pool in, check with your local zoning board to make sure you are following the safety requirements. Some examples of the requirements include a door lock with a coded pad – preferably one that is high enough up the wall that small children can’t reach it, a motion alarm for the water to alert other guests if someone enters the water, and only one door that allows access to the pool room. You’ll also want to make sure you have a way of controlling the chlorine smell. Also, keep a cover that can be placed over the pool in between guests. This is very helpful in reducing moisture levels in your cabin.
One of our specialties is building cabins with indoor swimming pools, and we’ve been helping clients do that for almost five years. Some of our builders have been constructing cabins with indoor pools for even longer, so we are always here to help answer any questions you have about putting a pool in your cabin – or even building a new one to upgrade to!
As always, my staff and I are here to answer any questions you may have. If you’d like to learn more about how indoor swimming pools can add to your annual rental income, call me at 865-765-6157 or 865-654-2111.
With the shortage of cabins on the market and the high demand to replace them by people who lost their cabin in the wildfires almost a year ago, those of you who dream of having a vacation home in the Smokies are facing some tough competition from buyers with insurance checks in hand. But you can still live your dream if you are willing to make some concessions.
First, you need to know going into the cabin buying process that you may have to offer a little more than what the properties were going for a year ago. Our area is a sellers’ market right now, and property market values are reflecting that in the offers we are seeing. This means you may be competing with investors who are looking for a place that will generate a decent income on the rental income market. To make sure you come out on top, you are going to have to offer your highest and best price.
With that in mind, a higher offer using lending means getting the property appraised for the amount you are offering might be a challenge. As market values have rapidly risen, the appraisal values – the determined worth of the home to help lenders decide if they will approve the requested amount on a mortgage – have not really kept up. But there are things you can do to help it appraise for more. For example, appraisers can consider the gross rental income in the value of the cabin. So, I and my staff will help you find a great rental company able to bring in an amount that will make the cabin worth more in an appraisal.
How you can rent your cabin and still enjoy it
But you may say, “I don’t want to rent my cabin because I don’t want to share it!” That’s okay. We can help you figure that out, too. We know rental companies who will take great care of your property and your belongings. You can use it as much as you want, but when you’re not there you’re going to want to generate income on it to help with the mortgage. And you can do things to make sure it is being rented by guests who will care as much about taking care of the cabin as you do.
- Outfit it with the very top end furniture, appliances, and amenities. With the better quality items in the cabin, you can charge a higher price per night to help pay for those items. Give more, and ask more.
- Appeal to a smaller group of people. Limit the number of people allowed to rent your cabin. If you try to pack in more people, you will attract groups that are looking to spread the cost around and the more people in the cabin at one time, the more likely things will get broken.
- Prohibit pets. The last thing you want when you come to your “home away from home” is to discover pets have destroyed your favorite lamp, or scratched up the flooring. You can bring your pets, of course, but there’s nothing requiring you to let other people bring theirs!
- Pick something in a private area. Even something private can still be part of a resort, such as Brothers Cove, or Shagbark – which is protected by a guard gate around the clock. Maybe you would like a cabin in a residential type setting such as Sky Harbor (as long as crazy, winding roads are your thing).
- Look for something you will have to remodel. I often tell clients our number one goal in helping them buy something is to find someone else’s mistake that they can correct affordably. It’ll be cheaper to buy, and the money you put into remodeling will pay for itself with the additional rental income it generates. When furnishing or remodeling, make sure to choose materials that are more durable – ceramic tile, granite, distressed woods, stone, slate, etc. Avoid things like soft pine that scratch easily, or carpet that will stain and tear over time. Also, sheetrock is generally something you should replace with wood walls, tongue and groove, or something that gives it more of a traditional cabin feel.
- Have the cabin deep cleaned once a year. If you do this right before you come for your big vacation trip of the year, the positive impression it will leave for you as you walk in on the first day will help set the tone for the whole trip!
In conclusion, if having a cabin here that you can use for vacationing any time you want is a dream of yours, don’t let the current market situation discourage you. Lenders’ rates are low and most lenders only require 10 percent down payment. If you can swing it, you should put down 20 percent so that you aren’t charged what’s called PMI. It’s a form of insurance required by the bank when you owe more than 80 percent of the loan value. And, don’t wait. As the economy improves, the more buyers there will be. While we are in the process of building back what was lost, and building new cabins in new areas, the shortage of available properties here will continue. So the longer you wait, the more the cabin is going to cost.
If you want to learn more, or need help finding a vacation cabin that’s right for you, I and my staff are always here to help!
When people call about buying vacation or investment property, one of the first questions I am often asked is, “Should I buy a condo or a cabin?” The answer is, “Yes, you should!” Both have great, attractive qualities and serve specific goals, so it really comes down to what your personal preference is for owning a home in the Smokies.
Why You Should Buy a Condo
Condos are the best investment when knowing that what you’re getting will be low maintenance is the most important concern. When you buy a condo, you don’t have to worry about who is taking care of the roads or whether someone may be thinking about building on the next lot over and blocking the view of Mt. LeConte. You have the support of the homeowners association to take care of the building maintenance, the grounds, the roof, etc. In a condo, you’re close to the action for shopping and other activities that make our area so popular. If you’re planning to use the property more for your own purposes than for rental income, a condo can fit that need with a lot less upkeep.
If keeping your costs low is important, then another thing that makes the choice to buy a condo is that insurance is cheaper than on a cabin. You’re basically insuring the contents of the condo unit, so the cost per square foot is about half when comparing apples to apples with a cabin.
And yes, condos can make money if you choose to rent yours out. While you won’t make as much with a condo as you might with a cabin, you can still generate income to help with the mortgage, put in that new flooring, or just have some extra spending money for your next visit to your home away from home. As a condo owner, you are competing with the hotels and timeshares around here. So you have to make sure you are offering a little more for your guests. A well set up, effectively marketed one bedroom condo can bring in about $25,000, and in some places we’ve seen units generate as much as $30,000. Due to the fact that your unit is the same as your neighbor’s, there is a ceiling on what you can earn, though. Changing out the flooring or making other updates won’t really add to the value if you decide to sell it. If your neighbor’s unit sold for $150,000 last week, then that’s about where you can expect your price will be this week, in general.
Why You Should Buy a Cabin
The best reason to buy a cabin instead of a condo can be summed up with two words: rental potential. Where condos have a ceiling on what they can earn, cabins have a wider spread and are really only limited by their size, location, amenities, and what the views around them are. Some cabins have HOA fees, but just as many do not, or have a very low one for things like road maintenance. You can make improvements, add amenities, and update the décor to raise the value of the cabin.
Cabins in the Smokies also tend to attract a larger pool of customers, people who want the unique experience of sleeping in a cabin in the woods. For some, the cabin stay is the main part of their vacation. So you’re not competing with the hotels and timeshares.
You can also change and update your cabin the way you want and if you make the right changes, they will add value to the property. But you will have to take care of the maintenance yourself or pay someone if you’re in an area without an HOA that includes that. You’re responsible for making sure the cabin is stained and treated for bees on a regular basis.
Next, we created a test for you to see whether you should buy a condo or a cabin.
Rate your stance on each of these scenarios on a scale of 1 to 10.
- You see a bear from your window. How awesome is that? 1 = The opposite of awesome! 10 = Best day ever!
- Bees are swarming around the door to your home. 1= Call pest control! 10 = Let’s build a beehive!
- The roof is leaking. 1 = Time to call my real estate agent. 10 = Time to get my hammer and nails!
- You notice grass growing up along the sidewalk. 1 = Spray some weed killer right away. 10 = It’s just a couple blades of grass.
- You decide to change out the green carpet with hardwood. 1 = I don’t care if it adds value, I just want to change it. 10 = This had better make my property worth more!
If you scored above 40, you would probably prefer a cabin to a condo. You enjoy nature and you don’t mind taking care of the structure yourself (at least, not enough to dissuade you from living in a cabin).
If you scored lower than 25, you will probably want to buy a condo rather than a cabin. You need a property that is well maintained and you want to enjoy your space the way you like without worrying too much about making money on it.
If you scored between 25 and 40, you could go either way. The cabin you need is something in a resort that is maintained by the HOA or by a rental company. Maybe you want a cabin you can outfit in a way to make it worth more but want to be around people while you’re working, or perhaps you don’t want to see grass on the sidewalk but hope the bear will come up on the deck to say hello. Part of what makes the Smoky Mountains so great is that there’s something here for everybody! If you want to learn more about rental properties or need help to buy a condo or a cabin, we are here for you!
Prayers for Gatlinburg after fire
All of us at Century 21 MVP are so devastated to see our community ravaged this week by a raging fire that quickly swept across 500 acres of the Great Smoky Mountain National Park, into Gatlinburg, and down toward Pigeon Forge.
As many of you have heard by now, a fire that started on Chimney Tops was carried by wind to nearby areas on Monday and quickly spread across the National Park. By the end of the day, it had spread so rapidly that it reached Gatlinburg and spread across to Pigeon Forge. The entire city of Gatlinburg was evacuated, as were homes around Wears Valley.
Thankfully, the rain we had been praying so long for arrived late Monday evening, but not soon enough to avoid the evacuation of approximately 14,000 people from Gatlinburg. Tuesday afternoon, it was reported that three people have lost their lives in the fire, and some families are still separated and searching for each other. 100 structures in Cobbly Nob burned and at least 30 buildings in Gatlinburg were destroyed by the fire. We also learned Tuesday morning that 100 buildings at West Gate are gone, as well as cabins in Black Bear Falls. In all, about 150 structures were destroyed by fire in Sevier County. The National Guard was called in to provide aid and evacuation centers were set up for displaced residents. Volunteer firefighters from multiple fire departments are still out battling the blazes to keep them contained while we wait for more rain to come. Police officers have been going door to door to evacuate people. And many lost power as the strong winds – reaching gusts of almost 90 miles per hour at times – pulled down electric poles and power lines that contributed to the spread of the fire.
City officials told local news outlets that half – about five miles of the city of Gatlinburg – was affected by the fire, but not the downtown area.
Firefighters continue to battle fires
By late Tuesday morning, 14 fires were still reported to be burning but firefighters are continuing to do everything they could to contain them while we await more rain. Please keep our communities, our emergency personnel, and all of those directly effected by these fires in your thoughts and prayers during this difficult time.