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.
This month, I have some fantastic news that I am very excited to share with all of you! New cabin builds in the Great Smoky Mountains are about to begin!
It has been about 7 years since new cabin building came to a halt following the housing crash in 2008. Slowly but surely the market has steadily recovered to the point that building is no longer so cost prohibitive that it can’t be done.
One fantastic example is Sherwood Forest Resort. It has been leading the way for the latest season of new cabin building. Sherwood Forest Resort had many special attributes that made that possible. They also had very high quality developers who have been tenacious and humble and willing to endure the trials necessary to make a comeback. Sherwood Forest is in a superb location. First, it’s close to both Pigeon Forge and Gatlinburg. You can be at Dixie Stampede sitting down to dinner in less than 10 minutes! Secondly, it is in a location with gas lines, utility water and a sewer system already in place. The infrastructure is so important when it comes to new resort development. Many cabins in our region have wells and septic tanks but new construction has to meet different regulations for things like water pressure. Developing the infrastructure in areas without a system already in place can make a new cabin too costly, such as the cost of installing a septic system if it has to be put in because the cabin can’t connect to a public sewer or water line. The resort at Sherwood Forest also came “cable ready.” Most importantly, the resort provided larger water lines to each of its fire hydrants to increase the water pressure. Larger cabins such as these also require higher water pressure levels for their sprinkler systems, so having the public utility system provided for that need, too.
Did I mention the view? It’s awesome! Guests at Sherwood Forest are looking right at the National Park, and more specifically, Mt. Le Conte! Best of all, the cabins in the resort were able to be built without having to blast rock in order set the cabins’ foundations.
The Sherwood Forest cabins were designed with the most discriminating renter in mind at every stage of design and construction. To start with, these new cabins were outfitted with the highest quality material, tongue and groove walls throughout, ceramic tile, and granite commercial flooring. Each was constructed with walls made of glass, incredibly huge game rooms, open floor plans, stone fireplaces, private baths for each bedroom, theaters and the biggest amenity – an indoor pool. The idea was to have a cabin so magnificent that once a visitor stayed there they would never want to stay anywhere else again! To accomplish that, we made sure they were jam packed with entertainment, hot tubs, decks overlooking the park where guests could sit and enjoy the views, spacious places to enjoy the Great Smoky Mountain with family and friends.
And our vision paid off for our investors. The rental income has been absolutely fantastic! Three bedroom cabins are generating over $100,000 in rental income a year and it just gets better from there. We actually have a 12-bedroom that is bringing in revenues over $300,000. All this means that you can buy a cabin, enjoy vacationing with your family, and make money at the same time. In fact, many of our investors have moved money from other type of investments. One comment we have heard more than once is, “your family just can’t enjoy your stocks and bonds like you can enjoy a cabin!” We think they have a good point!
Now, a few other resorts are opening up for new cabin construction as well.
Hibernation Station in the Wears Valley area is clearing lots as we get ready to launch a new 5-bedroom plan this fall. Mountain Shadows in Gatlinburg is also tweaking a floor plan that will be second to none, and Black Bear Ridge Resort is being built back. In Black Bear Ridge there are many interesting floor plans being built where the fire took its toll almost three years ago now. We are confident these new cabin designs will perform as well for their owners as Sherwood Forest has.
You are going to find that a new cabin costs a little bit more than buying something already built, but many of our owners feel like the additional investment is worth it when they consider the rental incomes generated from a cabin designed for rentals. The bottom line is that the new cabins are outperforming the older cabins. About half of our new cabin owners are not new to cabin ownership. They have done well with cabin rentals in the past and they see the potential in the new cabin construction so they have placed their older cabin on the market and used the proceeds to build a new one.
If you are a cabin owner and would like to find out if investing in new development by selling your current one is the right decision, we will be happy to give you some of the parameters we consider important when making that decision. Or, if you would just like to discuss the pros and cons of cabin building further give us a call and we will be happy to brainstorm with you. We have made new construction a specialty, despite the challenges! We will continue to focus on building and will be happy to share the good as well as the bad. New cabin building is not for everyone but for those it is right for there are definite benefits!