For our March “House of the Month,” we’ve selected this beautiful 2-bedroom cabin in Parkside Village.
Now you can own your own perfect getaway with this cozy two bedroom and two bath cabin smack dab in the center of Wears Valley! It’s located just minutes from town and offers easy access to either Townsend or the National Park. This is a mountain lover’s dream!
Well maintained and newly stained, this 2-bedroom cabin’s open floor plan will offer you the chance to relax with family and friends or enjoy a nice game of pool in the downstairs game room.
You can learn more about this 2-bedroom cabin here.
Turn this into your cash-flow nest egg today! Contact me at 865-765-6157 or call my support line at 865-654-2111 to visit this 2-bedroom cabin.
For our March “Cabin of the Month,” we’ve chosen this 1-bedroom cabin nestled in Parkside Village.
To learn more about this 1-bedroom cabin, click here.
If you would like to schedule a visit to see this 1-bedroom cabin, contact me at 865-765-6157 or call my support line at 865-654-2111.
The most common type of phone call we receive from buyers looking for real estate in our market usually starts out something like, “I’ve never really owned vacation rentals before but I want to buy one with great rental history!”
The conversation then turns to identifying what exactly they are looking for in an investment property and what their budget is for buying real estate. Once we have those parameters figured out, the next point to focus on is understanding what their long term plans are with buying real estate. Always be looking for real estate property with the expectation that you will sell at some point. This is the first, most important step in the process of buying real estate. We have found that it is fairly common for investment cabin owners to relist their cabins within five or so years. Either their investment strategies evolve leading them to buy other cabins or to invest in other ideas, or life happens and their focus on where they want to spend their investment dollars changes. So, always buy with the sale in mind. What does that mean? Well, it means there are several criteria you want to do your best to meet as you search for the best investment.
- It’s got to be in a great location. Location is everything, as I’m sure you know. You’ve got to buy something in a great location. You can change almost anything about a home but you can’t change the location. You can’t move a house if it’s in a bad location. So how do we define “great location?” Well, in the Smokies, a great location is generally something that has a beautiful view of the mountains, is close to attractions, and is relatively peaceful. If your investment property doesn’t meet at least some of those criteria, it had better offer something incredibly unique that renters will find appealing.
- Buy the lowest priced property of the best quality on the block. You definitely don’t want to own the most expensive home or cabin in the resort, and the reason is this: when you get ready to sell, you will have a hard time getting that piece of real estate to appraise for what you want from it. Appraisers look at similar properties in the same area of the property for sale as much as possible, and often times a property that is priced higher than the ones around it sold for has trouble getting approval for the price you are being offered. Without an appraiser’s stamp, a lender won’t be able to authorize the deal unless the buyer is willing to pay the difference up front. Most buyers using a lender usually can’t (or won’t). By going after something that is less expensive, you have enough room to maneuver as it appreciates in value.
- Buy as high quality of property as you can afford. People are always looking for the best deal, and I personally love helping them finding someone else’s mistake that they can turn into a win. But even with that goal it’s important to remember that the cheaper something is, the more you will have to spend to turn it into a gold mine. You want to buy real estate property with good bones that will hold up better without much maintenance. On that subject, don’t buy something with an outdated, obsolete floor plan. You want to buy something that can be changed to keep up with the interior design trends. So buy something with potential to be great without having to completely rebuild from scratch.
Remember, the goal in real estate investing is to make money with the property, both on the front end over the years as you rent it and on the back end when you sell it for a profit. If you’re not striving to reach those two goals, it might be someone else buying your mistake instead!
Next month, I’ll take you through some of the strategies I encourage my buyers to use once they’ve found the “diamond in the rough” so that remodeling the home increases their profits rather than cutting into it.
In the meantime, if you have any questions about the local real estate market, my team and I are always here to help and answer questions.
For our “Cabin of the Month” of January, we’ve selected this vacation home in Cedar Falls.
To learn more about this vacation home or to schedule a showing, call us at 865-654-2111.
We are finally reaching the end of 2017 and wow, what a year it’s been! We started with one of the worst tragedies our region has seen as we watched the Smoky Mountains and parts of Gatlinburg burn just over a year ago. So many vacation and rental cabin owners were devastated by the wildfires and we worked with many of them as they made the tough decision to either build back or buy something else. As the costs of materials and construction climbed over the year due to catastrophes in other parts of the country, even people who planned to rebuild their rental cabins slowly abandoned those plans because the price of doing that was just too much.
The rental cabin market in 2017
Not everyone who owned a cabin was eager to sell, though, so what we ended up with was a market of anxious buyers without enough cabins on the market to meet the demand. And many of them had cash from their insurance checks, so they were willing and able to pay a little more than someone who was new to the idea of buying a cabin, or who was working with a lender. The result was that prices of existing cabins began to steadily climb as well. The price to buy remained lower than the price to build throughout the year, and we still haven’t reached the point where building and buying are equal in price.
The number of residential properties, including rental cabins, didn’t quite reach the number sold in 2016, but the average price of such properties increased roughly $25,000 on average and our total sales for the Great Smoky Mountains region passed $540,000,000. Nearly 1,100 of the properties sold were vacation and rental cabins. With the flurry of buyers, we saw properties on the market sell very quickly, sometimes in less than a week if they were competitively priced or in a fantastic location for the right buyer.
So what does all that mean for 2018? Well, the number of residential homes and rental cabins for sale in our market will continue to be down and the market for buyers will remain a competitive one. This is good news for sellers but not good news for buyers. If you are thinking about buying a cabin, sooner is better than later. The longer you wait, the more difficult it will be to find a property within the price range you want to be in and the more competition you will have for what’s available. The market price for residential property will continue to climb until it reaches a point where the cost of building is a reasonable option. The most important thing to understand in that statement is that the cost of building isn’t likely to go down in the foreseeable future, either. So as the price of building climbs, it will be that much longer before building and buying are the same price.
Finally, none of this is exact science. In fact, there’s a lot more art to it than science. But what we do know is that the vacation rental cabin market is booming and because of that, cabin owners generally aren’t likely to sell their investment properties as long as they can make more with the rental income than they can from the sale of the cabin. The other factor for owners is the tax depreciation. Until that is used up, they will keep going. (Talk to your tax attorney if you want to understand more about how tax depreciation can be beneficial to you in the vacation cabin market.) And, the increasing number of buyers, especially people who are moving their investments from the coast line to the mountains, is expected to continue. This high number of buyers will drive the market.
As always, my staff and I are here to answer any questions you have about the rental cabin market.
Our featured ‘Cabin of the Month’ for December has incredible mountain views of the National Park!
To schedule a visit to see this cabin and its amazing mountain views, call me at 865-765-6157 or my support line at 865-654-2111.
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!
Don’t miss seeing this Shagbark cabin!
This secluded Shagbark cabin is our featured “Cabin of the Month” for November. With its beautiful woodland views, you can make this your own vacation or rental home, it may be just the place you’re looking for. If a cabin with plenty of privacy but close to the action is your preference, you will want to stop by this property in Shagbark Resort.
Recently updated with new furniture and appliances, this charming one bedroom, two-bath log cabin’s handsome tongue and groove design pairs well with its wood floors. Nestled on almost two acres, this more than 1,400 square foot home provides marvelous valley views without and a beautiful open floor plan within. The home’s master bedroom is located on the main floor. In the loft, you will find a game room and additional sleeping area for your guests!
Located in Shagbark Resort, this cabin is part of a beautiful mountain community with a manned guard post and locked gate around the clock for security. Amenities at the resort include a pool, a tennis court, and a club house.
Best of all, it’s located just 15 minutes from the Pigeon Forge Parkway and all the attractions for vacationers looking to enjoy a private setting during the evening after a long day of shopping and activities in town!
Click here to learn more.