Lake Haven

What a challenge 2020 was for the world! And this time I am not dramatic!

What a grand time to launch a resort- not! But despite it all, a dozen cabins have closed, and groundbreaking has begun at Lake Haven, and soon we should be able to open front doors and walk out onto decks that offer breathtaking vista views of the Lake!

Douglas Lake

Our area prospered through 2020. We closed out our Century 21MVP real estate companies’ sales at an all-time record high. Greg and I sold over $48 million worth of primarily cabins in 2020. That is a crazy good number! As we enter 2021, the forecast for continued growth in the area surrounding The Great Smoky Mountain National Park remains strong. The communities are truly blending; Gatlinburg, Pigeon Forge, and Sevierville are creating a Smoky Mountain experience for tourists that is second to none. Due to COVID, we have many new faces that enjoyed the area for the first time and promise to return.

So what is going to make Lake Haven Resort a good investment this year? Location and Pristine Beauty! It sits 15 minutes from downtown Sevierville, 20-30 minutes to Dollywood Theme Park (depending on the traffic, and I know you know what I mean-LOL). It is on the up & coming main route into our area to avoid traffic – Hwy 411 – from the interstate junction of all Northern tourists coming down I-81 and all Southern tourists coming up from Asheville, NC. The widening of HWY 411 and opening the exit is going to create growth in that direction.

As for “Beauty,” Lake Haven is a mature forest on the top of pinnacle ridges. It offers absolutely glorious long-range views of the main lake channel and then, of course, deep coves of beautiful aqua water fingering around the resort. There are 2.5 miles of lake frontage in Lake Haven Resort.

These lakefront properties offer both mountain and lake views. They include incredible resort amenities such as walking trails around the Lake, a picnic area on the Lake, and a pavilion overlooking Douglas Lake. Lake Haven gives tourists the best of all we have.

But honestly, it will be an excellent investment due to the income from these lodges on overnight rental programs. We will be happy to give you financial proformas on these properties, but they will pay for themselves and generate revenue as long as you don’t stay in them constantly! And if you do – we celebrate with you – the joy of having a second home, and you will have to make your money in appreciation.

What drives the high overnight revenues to continue to be the Great Smoky Mountain National Park remains at eleven million-plus visitors on average. 2020 was a record-breaking year at 12,195,720. That’s a lot of cabin renters! Our cabin renters tell us that staying in a cabin is like having your own “theme park,” “movie theatre,” and arcade hall.” Some don’t make it into the National Park. But they mean to! So they report they will be back as they didn’t have the time to do all the activities that were on their “wish list.” Many of them keep journals on how many hikes they have done and have goals to hike every trail!

So we continue to be the most visited National Park in the United States. We are within a day’s travel time for the majority of the population of the US. Tourism has increased year after year. The Smoky Mountain National Park is a gateway to 500 thousand acres of Appalachian wilderness. There are 800 miles of mountain trails and camping in dense ancient forests, a historic community of Cades Cove where visitors can wander around grist mills, cabins, and experience how life was in Appalachia when our nation was founded. But that is not all the area has to offer: Dollywood Theme Park has 2.5 million visitors annually; there are many themed theatres, dinner shows, attractions, world-class shopping, outlets of every shape and size, and restaurants on every corner, large and small.

So what are we going to build at Lake Haven this next year? Everything! We started with the small one and two bedrooms, but we heard from so many of you this year that you wanted many different sizes, so here we go! In addition to the one and two bedrooms, we will also have a three, a four, a five, a six, an eight, a ten, a twelve, and a sixteen bedroom. The style will remain consistent. The exteriors will be a combination of log, shake, bark, timbers, board, and batten. The color palette will be complementary. No two cabins exactly alike in selections will be built beside each other. The feel will be fresh, clean, contemporary, rustic, and the latest in maintenance-friendly materials.

So call us for a guided tour on the weekend. Or email us for floor plans, financials, and more info.

A Market Snapshot

To say 2020 brought many unexpected changes is an understatement. However, as we enter 2021, we have a great deal of positive momentum.

The “Great Smoky Mountain Vacation Runaway” would be a great title for 2020! We became the destination of choice! Once we were past the late spring COVID-19 lockdown, the race to the Smokies was on. We think the combination of cooped-up parents with kids being schooled virtually and the opportunity to at least Social Distance if not outright quarantine in a cabin full of entertainment enticed people to the area. Truthfully, it was a perfect choice!

Because of this, rental records were broken across the board. Even though they were missing perhaps a month or two because of COVID cancelations, most cabins outperformed any previous year. To our surprise, many of our guests were first-timers to our area. These first-time guests routinely reported they fell in love with the area and promised to return! This is good news for future rental revenues for cabins.

These new guests shared that previously they were on a cruise or were flying to Hawaii, Florida or Mexico coasts, Disney theme parks, or one of the other National Parks.

The wild, free and conservative State of Tennessee has become very popular across the nation for relocating and also investing. We continue this year to be in the top five for moving trucks traveling to our area and we were also picked for investors as a great place to place their investment money, particularly for short-term rentals. In the top five was Gatlinburg, Pigeon Forge and Sevierville, that kind of was a complete run!

What does this mean for you? If you have an older cabin, there is not a better time to sell it. The value of cabins is at an all-time high. Inventory is still down. If you are able, take the proceeds and build or buy new construction. New construction is still not at top value, and you have the advantage that you are getting a newer, latest and greatest floor plan, new furniture, new appliances, and a cabin with very little maintenance for the next three to five years. You are also obtaining a cabin that will outperform the older floor plans and older amenities.

If you are a new investor, it is time to put your toe in the water.

Feel free to call us to get a sense of your cabin’s value and whether new construction is possible for you. Alternatively, email us and ask for the latest report on “What Makes a Profitable Cabin.”

A look at the second half of 2020 in Smoky Mountains real estate

As we move through the second half of the year, many of the people who contact us about buying cabins first ask if the challenges from COVID have affected the market. It’s a great question, and something we are constantly monitoring. The answer, though, is not really. The condition we were in with our market through most of 2019 still holds true today. We have a shortage of properties – especially with vacation cabins – and a flurry of ready, willing, and able buyers who are looking to own a second home or investment property in the Smokies. I do still expect there to be some people who need to get the cash out of their cabins for other life pursuits and may be under some pressure to sell, but this is still a sellers’ market. I don’t foresee that changing this year.

The number of buyers hasn’t dropped off, either. This is due to lowered interest rates on financing and a strong tourism market that keeps the rental cabin business profitable. Cabins are booked solid through September and we are seeing an uptick in the number of visitors to the area. Many of those bookings have been scheduled at the last minute. Our guests can stay in a cabin and practice social distancing just as easily as they can at home, so many people find that appealing.

New construction is still an option, too. It’s taking a little longer and it’s still as painful as ever. We’ve seen price increases in lumber and other materials, but lenders are still offering loans on new builds and the rates are as competitive as buying an existing cabin. So, it’s still a viable option if you’re in the position to be patient with the process of waiting to make your money back while it’s being built.

The most important thing to keep in mind is that the rental vacation market is still very strong. We are excited for people to come and visit our area, enjoy the national park, and enjoy the comforts of our vacation cabins. Just remember to be wary of your surroundings, be respectful of our residents and other guests in what is a difficult, stressful time for a lot of people, and bring your mask. But most of all, enjoy the treasures that are here, and enjoy the time with family and friends who come with you!

July featured ‘Cabin of the Month’ in Sherwood Forest

Sherwood Forest’s “Splash Lodge” is our featured “Cabin of the Month” for July!

Splash Lodge is one-of-a-kind spacious 11-bedroom luxury cabin with all the amenities you could ask for or think of – a fantastic investment, and the cornerstone of the Sherwood Forest Resort! It is positioned right beside the resort pool for flat huge parking of buses and lots of guests! The drive to the resort offers easy access and no winding roads. With the most dramatic grand floor plan of the large cabins, it is open and airy. You have a large over-sized kitchen and a dining area that can accommodate up to 44 guests. The cabin also comes equipped with a game loft, a game room, and a theater that is second to none offering a 60′ TV- luxurious tiered seating! Hot tubs are located on the outside decks, but the best of all: a huge indoor pool anchors the fun! It absolutely doesn’t get any better than this!

Over 8,000 square feet of the most upscale design and appointments possible. This cabin is sold fully furnished. The owner’s expectation is this cabin will bring in gross rental of $300,000 by the end of the year. (The owner has another large cabin that generates this level of revenue and this cabin has just been switched to that same program.)

To schedule a showing at this cabin, call my team line at 865-654-2111. To learn more about the cabin, click or tap here.

Looking to save on your tax bill?

I’m excited to share with you information on a new law that went into effect a few weeks ago to help us vacation cabin owners as a result of the COVID pandemic we are working our way through.

The law, called the CARES Act, includes a provision that will allow cabin owners – and other businesses – to charge the losses against taxes we paid in previous years for up to the last five years. Some of the relief you can seek on your taxes under the CARES Act (as listed on the irs.gov website) include:

  • waiving the carryback period in the case of a net operating loss arising in a taxable year beginning after Dec. 31, 2017, and before Jan. 1, 2021,
  • disregarding certain amounts of foreign income subject to transition tax that would normally have been included as income during the five-year carryback period, and
  • waiving a carryback period, reducing a carryback period, or revoking an election to waive a carryback period for a taxable year that began before Jan. 1, 2018, and ended after Dec. 31, 2017.

I’m working with a company called ACRS (Accelerated Cost Recovery Solutions) that specializes in helping with tax reduction on vacation cabins through a process called Cost Segregation, “a strategy for accelerating depreciation, reducing taxes, and increasing cash flow,” as their company puts it. The process is simple. Every item in your cabin has a monetary depreciation value that can be determined by someone like ACRS. Whether it’s a pool table, a kitchen set, or even the lamp in the corner of the living room, all of these items can be checked to determine what the value will be for reducing your bill at tax time. Having this study done can save you a bundle, and you only pay about 10 percent of what you get back in taxes for the study.

You should talk to your tax attorney or CPA to see if a cost segregation study is right for you, but in the meantime if you’d like to learn more about it you can check out the ACRS website for a bit more explanation on how the study works.

Right now they are doing a study of my cabins to help me figure out where I can save on my tax bill.  I’ll let you know how it turns out!

The future of rental cabin investments

As we continue to navigate the global challenge of the coronavirus and its impact upon the economy, many are asking what the effect on the real estate market will be over the next few years. In a recent article, I shared about what we learned from the downturn in the last decade when we saw foreclosures and short sales. I don’t expect we will see that sort of thing this time around, for several reasons.

One of the main differences this time is the stimulus and business loan programs that are being offered. The federal government has already issued one-time payments to families – something that didn’t happen during the crash in the late 2000s – and they are considering more. Also, even people who aren’t normally eligible for unemployment are being allowed to sign up for it now due to loss of work. These stimulus packages, if they are all approved, will lead to people earning up to three times as much than they made when they were working – particularly those who were considered lower income earners. The result of this will be seen as early as the third quarter of next year, with an inflation increase of 3 to 4 percent. It will also probably lead to increases in mortgage rates during that same time period, probably closer to where they were before the current pandemic all began.

Right now, interest rates are incredibly low and it is a fantastic time to buy, especially if you are looking at options for long-term investment. As we move into a new season, property values for the strongest investments are expected to increase. Coupled with higher interest rates in that next season, the window of opportunity to buy will close.

On the sellers’ side of things, this is a fantastic time to sell if you own a investment or vacation/second home cabin. Inventory continues to be low and market prices are holding steady, however we know from our past experience that as summer approaches there will be people who need the cash equity from their cabins. Perhaps it was something they were using strictly as a vacation property or it wasn’t earning enough on rental to help the owners stay ahead of the mortgage payments. Those cabins will be priced below market value and their sales will impact appraisal values on cabins that are sold after. So sometime around September we will begin to see a slight shift in appraisal values. Cabins that continue to cash flow will be less likely to be sold during this time, and so inventory will continue to be low. This will also mean new construction will continue to be a popular option for many people.

And it will be worth the wait for the cabin to be built, as the new construction options will include newer, more popular amenities, upgraded materials and design to match what is most appealing for our guests. So when it is done it will be worth more than something that is older and outdated, and will generate more in gross revenue rental income as a result.

As always, I am always available to talk with you and answer any questions you may have about the current real estate and rental cabin market. Stay safe!

Don’t miss seeing this Kodak home!

This 3-bedroom, 2-bath home in Kodak is our featured “House of the Month” for May. Conveniently located, just 2 minutes to I-40, this home offers easy access to Knoxville, Jefferson City, Sevierville, the Great Smoky Mountains, Morristown, and Dandridge! Perfect for anyone who needs lots of storage, the home comes with a detached shop (w/ electric), two storage buildings ( one with electric). With its one-level living, this 3 bedroom 2 bath home is easy to get around in. The home sets on a level, fenced-in back yard. The home also has a recently remodeled kitchen and new HVAC and water heater.

Click or tap here to learn more about this home.
To schedule a showing, contact our team at 865-654-2111.

Newly built in Starr Crest Resort

The incredible craftsmanship and attention to detail creates the perfect blend of Smoky Mountain cabin getaway and contemporary rugged living in this 3-bedroom cabin! Its 180-degree (and then some!) views of the Great Smoky National Park from the 3 stories of decks, its soaring cathedral ceilings, handsome grey-stained tongue-and-groove wood floors, and modern finishes all bring this masterpiece together. The main floor boasts a spacious and open kitchen as well as dining and living spaces for easy entertaining and gathering. The generous master bedroom on the top floor features a wall of glass for privacy and allows you to take in the view while lounging in bed. The downstairs offers a common game and sitting area along with 2 bedrooms and full bath including a double vanity. All cabinets and vanities are painted maple with soft close hardware from Maddron Cabinetry.

This cabin, built this year, is located in Starr Crest Resort – one of the most popular resort destinations in the Pigeon Forge area!

Click or tap here to learn more about this cabin.

To schedule a showing, contact our team at 865-654-2111.

Introducing Lake Haven Resort at Douglas Lake

As we work our way through the challenges with the coronavirus, one question we are frequently asked is how the real estate market here is doing. Before this happened, we were in a sellers’ market due to a low number of properties for sale and a high demand among buyers. The result of that sellers’ market has been a strong focus on new construction with many new construction projects planned for this year.

That hasn’t changed. The need for new residential and vacation cabins is still there, and the good news is that there are developers and builders working to meet that demand. One of the areas we have been working with developers is a new resort at Douglas Lake. We are very excited to announce Lake Haven Resort as our most recent construction development project!

Work has already begun to create this gated community. Several of the cabins planned for the resort in the first phase of construction will have lake views in a high-ridge pristine park-like setting. These cabins will be built as one and two bedroom homes that can be placed on an overnight rental program with gross rental income projections of up to $40,000 depending on how much you use the cabin for yourself. As we move into the second phase, owners of cabins built in the current first phase will have the first option on owning in the second phase.

The purchase price for these cabins starts at $199,000 and we have several lenders who will finance the construction project. Contact us to find out more about this project and see if it is right for you!

Effects of coronavirus on Smoky Mountains tourism

The coronavirus has definitely taken most of us by surprise.  This is an unusual challenge we are facing as a nation and as a world community.   However, mankind has an amazing resilient nature.  In times of deep suffering and challenge we see what we are made of, and we often find sacrifice, love and honor in new and unusual places. 

Three years ago we weathered a major fire that burst out of the National Park, just as we were recovering from an economic downturn that had hit the nation.  We found then that we were “Mountain Strong” and I believe we will find that we still are.  And I am sure that we will also find that “God’s Grace is still Amazing!” as well.

Sevier County has always been the destination to “GO TO” when there is uncertainty.  When the terrorist attacks of 9-11 of 2001 made flying overseas or across the nation seemed highly risky we became the go to- vacation destination.  Even a few weeks ago when cruises seemed like not such a good pick- vacationers reported then that they drove to “their Smoky Mountains” instead.  I expect that to continue through this time as we wind down the coronavirus threat throughout the summer. 

I think we can expect that large gatherings will continue to be avoided.  Hotels and close quarter venues will not be popular for some time, probably until the end of the year.  We will continue to have large crowed entertainment areas opening very slowly or sitting out the next tourist season.  Outdoor events, hikes, camping and nature herself will be the focus of family or group getaways. 

Cabins that have their own entertainment centers in them will rise in popularity as a destination in themselves.   A luxury cabin will allow for private dining and safe cooking, something we have come to take for granted, and that may become a special amenity in itself or at least a comfort.  I for one would rather cook with a view!

The Great Smoky Mountains are within one day’s driving distance for 75% of the population of the US, making transportation by car easy.   This will be in our favor.  We are the most visited National Park giving freely its beauty and rest to America without any charge.   The Great Smokies will continue to be and may even be stronger.   We ended 2019 with 12.5 million visitors to our National Park.  That was over a million more than any other year.  The good news for cabin owners is that we could reduce that number significantly and still have an amazing rental revenue for our overnight rental cabins.  

If the manner in which we were able to work through the last economic downturn is any indication at all we will weather this challenge as well.  The last downturn hit many tourist destinations hard but it did not affect the luxury cabin rental market. 

Hotels and low end cabins and chalets were negatively affected however.  The budget renter is often hit the hardest when there is a crisis.  They often do not have savings, they can struggle with discretionary income when jobs are squeezed and they will often not have the money to travel.   I think we can expect the same for this crisis.    

We have three months in our calendar where visitation to our area is at its lowest: January after the first week, the month of May and the last two weeks of August (with the exception of Labor Day weekend) and the mid two weeks of September.  

This April and May I expect to be very quiet.  If you are a cabin owner prepare to not count on much income in May;  plan to come and stay yourself should the coronavirus allow!  That or send your favorite cleaner to do a deep clean in exchange for a complementary stay.  Or if you have a friend that lays tile or is a splendid decorator send them to work on your cabin. 

Take heart – we noticed that in the last challenge, the high-end cabins that were special, taken care of and updated did not drop off in rental revenue.   However, they did take rental revenue away from the outdated cabins; cabins that have not been keeping up with amenities and décor will feel the pressure to compete with a smaller pool of renters as we pull out of this crisis.

With this in mind if you purchased a cabin ten years ago and have not spent money updating it, you should perhaps consider selling it now or updating it.  Do not sit back but proactively place yourself in a strong position for this next season.  Now is still a good time to sell as we may have hit the peak in appreciation for this year.  We still have the sold comparables from this last season to price your cabin at the top of its value.  

When times are tough people love to retreat together, refresh, renew and let nature encourage their souls.  We did not see Americans stop vacationing during the downturn.  They didn’t buy as many souvenirs but they did visit their Smokies.   I expect the same this time.