Looking to build? We can help!

As we wrapped up 2019 – a year of watching building begin to make a comeback – we saw resorts expand into new areas, new resorts begin to develop, and cabins to be built in new areas across the county. Wears Valley quickly became a popular destination choice as visitors discovered the roads that lead directly into the National Park from that side of the county.

We’ve had the pleasure of working with local developers and builders to expand the rental cabin options through new construction, too. In Hibernation Station, we’ve introduced buyers to the development of that resort. Cabins there range in size from as small as two bedrooms up to 16 bedrooms and are being built with indoor pools, which increases the overall rental income these cabins can make. Right now, there are six lots still available but they are going fast!

We are helping builders and developers with lots in several existing resorts, too. In Eagles Ridge resort, we are working with a seller who will build to suit the next owner. The lot can accommodate a large 8-12 bedroom cabin or two smaller cabins if you prefer. Down the road in Sherwood Forest, two 6-bedroom cabins measuring almost 5,000 square feet can be built within as little as 2-3 months from the start of project date. And in Black Bear Ridge, there’s an 8-bedroom cabin underway if you’re looking for something larger.

Lastly, in addition to these, if you’re looking for a smaller cabin that comes with an indoor pool, a log home company is working to build cabins with two to four bedrooms at Alpine Mountain. At Eagle Crest, 1-3 bedroom cabins – also with indoor pools – are available.

We will have more to announce as the year progresses about other new construction projects taking place across the Pigeon Forge, Gatlinburg, and Wears Valley area! In the meantime, if you are interested in learning more about any of these projects or need help with your own project, we would love to talk with you! If you currently own a cabin, we can show you how you can sell it to finance your new construction project. Call our team line at 865-654-2111 or reach us at the office at 865-429-2121.

Finding the Win in Real Estate in 2020

Throughout 2019, our theme has been “building is making a comeback.” And it has. We’ve seen so many new cabin construction projects over the last year, including a few resorts we helped developers and builders to implement. Hibernation Station was one of our team’s most exciting projects! We absolutely love some of the new products!  In particular “log” cabins that are being constructed from a special concrete that is not only indistinguishable from a traditional log cabin, but also higher quality and lower maintenance.  Carpenter bees aren’t going to bore into concrete! 

Part of what has made building so popular is the fact that we have a shortage of available cabins for sale. As early as last spring, we began to see prices climb on vacation rental cabins due to the high demand among buyers, and if it was an awesome cabin, the demand was even greater. This past year, it was not uncommon to see a cabin receive multiple offers within days, sometimes hours, of coming on the market. And the later it was in the year, the more those offers were. Our team has had several cabins listed that were under contract within a day or 2. The demand has just pushed the prices higher and higher, until we will very soon reach a point where the cost to buy a cabin matches the cost to build one.

So going into 2020, the most important thing to keep in mind when building a cabin is that you need to build with the current trends in mind. You want to stay on the front of the changing designs.  You will want your new investment cabin to reflect what people are looking for now and tomorrow. Before you all go away screaming and pulling your hair out, here are a few tips to keep in mind that will make the project easier to manage.

Choose the floor plan that best fits the most popular desires. Some of the concepts that are out of date now are elements like tiny kitchens where the refrigerator is positioned up against the stove, whirlpools in the bedroom, no game room, no special media-theater amenity and non-existent outdoor areas because the cabin is sitting at the edge of a wooded cliff overlook. Instead, the next generation of cabins will have larger kitchen spaces, a defined dining area, a private bathroom for every bedroom, and space for outdoor living, kitchen, fire pit area. Indoor pools and swim spas are also popular if you have the space in your floor plan to include them. All of these amenities will add to the gross rental income and should pay for themselves. Elements that have never gone out of style; walls of glass, rustic elements, the cabin look and feel, drama and openness to the floor plan, lofts.

Be patient with the construction process. As building becomes more popular, the wait time for a cabin to be built can increase. Even after you pick out the lot that can accommodate the design you have selected, you may find that you need to wait a little while due to other steps before building can begin. You will need to secure permits and HOA approvals, conduct surveys and appraisals- all before you break ground. So while you’re waiting, you’re obviously not making money on your investment. You need to make sure you can manage the long game until your cabin is finished. As a good rule of thumb, plan on about a sixteen months from start to finish.

Be willing to sell an existing cabin to finance your new build. If you have a rental cabin already, don’t remodel it – sell it. It’s less expensive to build something correctly than it is to remodel. Additionally, new cabins are at the top of the rental market because of the adjustments in the amenities. So it will cost as much or more to remodel something existing to make it match what’s being built new (where it’s even possible), but probably won’t increase the value to match that of a new cabin. The value of a new cabin is between 20 to 25 percent more than an existing cabin of similar size. In fact, many of our top investors making their living on vacation cabins are selling their existing cabin to build a new one. Roughly 90 percent of our Hibernation Station clients were people who owned in another popular resort, Sherwood Forest.

In the coming months, we will be sharing details on new resort projects that are developing and what is happening with the existing cabin market. I expect the trend of multiple offer situations on existing cabins to continue, so if you prefer to buy than to build you will need to prepare yourself to win the bid. I will share more on how to do that in my next blog article.

Design your own cabin at Cobbly Nob

This month’s cabin of the month is a pre-construction build in Cobbly Nob. In this 3 bedroom, 3.5 bath you can pick your finishes and colors. The cabin design included more than 2800 square feet in the desirable Cobbly Nob community. Located on a beautiful, private wooded lot, the cabin design also includes two master suites each with private baths, and one large bedroom downstairs. The cabin’s open floor plan offers high quality, brand new materials! The kitchen opens to the great room, with the dining room located in between. Other amenities include a half bath on the main level and the downstairs has a super large recreation/media room.

This cabin is perfect for a second home or as an investment overnight rental property. Pics are of like construction by this builder. To learn more about this cabin construction, click or tap here.

If you’d like to visit the property or talk with us about this build, please call me and my team at 865-654-2111 or 865-765-6157.

What’s next for investment cabins?

As we near the end of 2019, we are in a very interesting place in the market. Inventory – the number of properties for sale – continues to run low. Why is that? The reason inventory is low is multifaceted. As many of you remember, we had a massive wildfire in November 2016. Many cabins and chalets, and some residences, were destroyed by the fires. The devastation resulted in the removal of literally hundreds of cabins from the rental market. Some rental companies lost 100 cabins overnight. While a few of the owners of those affected properties have built them back (or still are actually in the process of building back), many of those properties will never be built back the way they were. The codes for cabin construction have changed and tightened up from a decade ago. So because of the infrastructure such as septic fields, narrow winding roads, or inclines where a fire truck cannot gain access, the county or the permitting authorities – Gatlinburg, Pigeon Forge or Sevier County – might not approve a building permit.

Replacement construction was affected by other factors, too. For example, just the sheer number of those structures in need of rebuilding made obtaining the necessary materials for construction difficult and expensive. Also, the availability of contractors has been a challenge. Where so many of the projects are funded with insurance money – meaning the cash is immediately available – those will tend to take precedence over ones that are being financed through a lender where the project involves a bit more approval, oversight, and paperwork to keep the money flowing during the construction process. So if you want to build something new you’re going to be competing with that group.

What makes building the most appealing in spite of the challenges, however, is the shortage of properties for sale on the market these days. At the time of the economic downturn just over a decade ago, the resulting housing crash held the property values low, making it unattractive for sellers to sell. But with the improvement of the overall economy, prices have risen and sellers have been able to meet their goals. Now once where they were okay with delaying the decision to sell, most of them have already moved ahead and sold in that group of properties that changed hands with the first flurry of buyers after the wildfires. So, that group of properties is gone and there are fewer cabins available to sell. This whole situation causes values to climb.

Of course, real estate prices tend to cycle, and we are back where we were before the economic downfall of the overall country with values for many cabins. In other words, we are reaching the top of the market.

Will values continue to climb? That’s a difficult question because the construction industry is not at the level it was previously, it has room to grow. There is much more demand for new construction then cabins or homes being built, which would indicate we can continue to see appreciation in market prices. Interest rates might remain low and visitation to the area is at an all time high. We are a top choice among retirees looking to relocate and those who just prefer a slower pace. 

On the flip side, what would cause the high market prices to end or slow down? One very dominant reason why it would slow would be the competition of more new construction projects. As the construction industry makes a come back and its infrastructure is filled, supply will begin to meet the demand once more. We’re reaching a point where new construction is the preferred purchase, as the price of building something new and the price of buying move closer in line with each other.

In addition to price comparison, the other biggest reason that building will become more appealing is because new construction takes into account the new desires and amenities of that renters look for, such as theater rooms, large game rooms, large luxurious bathrooms, indoor pools, etc.  Also new construction will have less maintenance cost appliances. HVAC systems, water heaters, etc. will last longer then something that has some age on it so it will tend to compress the price of older cabins. Generally speaking, they will not be able to rise any further in price than new construction prices.  

So if you are thinking about selling, this is the time. I hope you will choose wisely. And remember – there’s always a win in real estate. We’re always here to help you understand and sort out what that win is for you based on your personal goals.

Large acreage site could be perfect development opportunity!

This incredible large tract of property located adjacent to The Great Smoky Mountains National Park could be the perfect development opportunity, if you’re looking for a unique investment. The tract is very close to the Greenbrier entrance of the Great Smoky Mountain National Park, Gatlinburg, the Rocky Top Sports Center and other major attractions in our region. This nearly 38 acre tract with incredible Mountain views, contains approximately eight acres of pasture, a mountain stream, and some basic road ways already cut in. This tract is ideal for private development, potential cabin development , campground site, equestrian activities. Contact us by phone or text at 865-765-6157, 865-680-5850, or 865-654-2111 to request to see conceptual plans for other developmental ideas. These engineered conceptual drawings offer insight for possible development.

To learn more about this property, tap or click here.

New construction: picking the right lender

Last month, we talked a bit about the re-emergence of building in the Great Smoky Mountains. With the market on the upswing due to so few cabins on the market and a huge demand among buyers, the prices on existing property have steadily climbed to a point not seen since before the downturn. As those prices began to reach the cost of building, new construction is beginning to appeal to buyers.

If you are excited about the possibility of owning your own vacation or rental cabin but can’t find exactly what you are looking for on the market and have the patience to wait out the building process, you may be at a place where building your own cabin is your best option!

As you work out in writing exactly what you are looking for in a cabin and picked the perfect builder to construct your dream cabin on the perfect lot for where you want the cabin to be located,  you’ll also need to be interviewing lenders about their different types of loans. One of the most important things you will need to know is how the project is going to be financed.

If you are very fortunate, you may come across a development project with the design you’re looking for where the builder is being financed by the lender directly. So then you would just buy the property as you would any existing home or cabin once it’s finished. The floor plans are pre-designed and while you may have some say in changes, most of the time it will be built according to the approved specifications.

Another great way to manage the financing of the project is to find the lot that meets all the goals of your floor plans and purchase it ahead of starting the project. If you have the cash to purchase the lot or if you can afford to wait until the lot is paid off, it’s possible the lot can be used as the down payment for the construction project. You just need the design to appraise for enough that the lot will cover the down payment. This is where the expertise of a real estate agent can be invaluable.

Different lenders offer different types of loans, so it’s important to know what your options are with the lender you pick to fund your project. Some will offer construction loans so you may have two closings – one for the construction project and a second for the conversion of the loan into a traditional mortgage. Others will offer a one-time closing.

During the building process, the lender will issue draws. These are payments made to the builder for materials, work performed, etc. As the buyer, you are generally only responsible for the amount borrowed on with each draw and payments you make are interest-only for the duration of the building process. So you can know fairly well ahead of time how much you can expect your payments to be as construction progresses.

If building your own cabin is the path you are considering, we can help you. We have worked with a number of builders on dozens of construction projects and would be glad to share our experience and expertise with you.

New cabin construction designed with indoor pool

Admire the breathtaking long range views from this 6 bedroom, 6 bathroom, 2 and a half bath cabin! Located just 10 minutes from the Pigeon Forge Parkway, this is your Smoky Mountains investment waiting to happen. With a projected yearly gross income ranging between $120,000 to $150,000, your second home can make you a second income! This cabin offers plenty of potential with its spacious more than 4,400 square feet, its sparkling granite counters, hardy wood-look floors, handsome tongue and groove walls, an outfitted game room, an outfitted theater room, and private indoor pool – the latest attraction for guests to the Smokies looking to rent a vacation cabin. vacation cabinOpen floor plan, high ceilings, and expansive decks are perfect for entertaining guests. Best of all, its just a short drive to the attractions. This is just one of our latest construction projects taking place in Wears Valley, so the pictures are of similar finished 6 bedroom cabins within the developing Smoky Mountain Ridge resort (actual floor plan may vary based on how the lot sets).

You can view more details about this cabin here.

To learn more about this and our other cabin construction projects, call me at 865-765-6157 or my support line at 865-654-2111.

Deciding When to Build

For the last few months we’ve been sharing with you about how building is making a comeback due to the lack of properties for sale in our market. More and more lenders are offering loans for building. Lots are in abundance even when residential homes and cabins are the opposite. Contractors are taking on building projects.

rebuilding after wildfireFor most people, building is an option when you either can’t find exactly what you want or your dream home/cabin is in the wrong location for where you want to be. Because buying is still a little cheaper – and easier – I recommend trying to find something existing that checks your boxes first, but if what you’re looking for just isn’t out there, then that’s when you should consider building.

So what’s the first step in building? Well, before anything else you will want to have a list of “non-negotiables,” items that are must-haves for your home or cabin. Do you want an open floor plan? How many bedrooms? What square footage is acceptable for your new home? Do you need the cabin you’re building to cash flow as an investment, or is this going to be more of a vacation property? Once you have this list nailed down, then you can start looking for the lot where you want it to be built. It’ll help you in the long run if you know before you buy the lot that it can’t be permitted for a 3-bedroom because the field line is too small if you need your home to have 3 bedrooms. It’s going to cost a lot more if you go about it the other way around.

Next, you will need to interview builders as part of the bid process for the construction project. While most people prefer to go it alone, this is one area where working with a real estate agent who has a firm understanding of construction can really be helpful for you. A knowledgeable real estate agent can help pair you with the right builder for the project. If you found the perfect floor plan in a different location, maybe the builder will be available or at least be able to provide the building plans for your home. Your agent can also provide you the names of lenders who offer construction loans. My team and I know a handful of lenders we work well with and are positive about when it comes to new build projects. And we know great builders who do fantastic work, too.

The other area where working with a real estate agent can be beneficial is in helping you save money on the project. If you design it correctly, it’s possible to make the project appraise for a value that’s far higher than the cost of building it will be. This could be a win for you if you are able to use the lot you are purchasing as part of the deal as a down payment on the project.

In next month’s article, I will walk you through the process of how lenders typically set up the loan and offer some tips on things you can do to manage the financing for the project as your home or cabin is being built.

Buying in a sellers’ market

sellers marketAround this time last summer, I shared with you that we are living in a sellers’ market in the Great Smoky Mountains. One year later, that fact hasn’t changed. The number of properties available – particularly vacation rental cabins, since that is our primary residential market in this area – has dropped below where it was last year while the number of buyers looking hasn’t. In fact, the interest among potential buyers has continued to increase, which has in turn continued to drive up the prices of available homes. This is great news for your if you own a cabin and are considering selling it, but it has proven to be somewhat frustrating for buyers who find the prices to be a little more than they were planning or who don’t want to make a seemingly impulsive decision and end up either missing out on the cabin they love or just giving up on the idea completely.

However, if you’re in love with the dream of owning a vacation cabin in the Smokies, there’s hope. There are things you can do and ways you can approach the opportunity, even in this market. The three things you want to focus on is making the successful bid, making it make sense with your investment plans, and making sure the decision to make an offer doesn’t feel impulsive (if like many of us that is an area you struggle with).

Study the market ahead of time. We frequently send out listings via email to people based on criteria they provide us weeks, even months, ahead of their plan to visit the area and pick a cabin. Of course, just about everything you look at now will be under contract and/or sold before your trip in the fall. However, the more you know about what’s on the market and what the prices look like before you make the trip, the easier it will be for you to spot exactly what you want when you go inside the home or cabin that will be for sale when you get here. And it won’t feel quite so impulsive when it matches something else you saw weeks ago that you really loved online.

Ask your agent to preview the home. When you live in another state, making a day’s drive on a Tuesday afternoon to see a cabin Wednesday morning before driving home in the afternoon so you can be back at work on Thursday isn’t always the most practical. If you don’t have a way to view the cabin before Friday afternoon, it might be under contract by then. So one of the services we offer our clients who we know are serious about buying a property is to go and check it out for them. We know what they are looking for in a home or cabin and can usually send photos or videos, or give a call while we are at the property walking around. Then, you can make an informed decision about the specific property and if you like it based on your agent’s feedback, be able to go ahead and make an offer following the tips I suggested last year.

Consider building your own home. The other good news is that if you can’t find exactly what you want, or you have time to plan out your vision for owning property in the Smokies is that building is making a comeback because of the shortage of properties for sale. So that is an option you should consider.

If you would like to know more or need help navigating the market, my staff and I would enjoy the opportunity to work with you on your adventure! You can call or text me at 865-765-6157 or my support line at 865-654-2111. I can also be reached via email: deborah@deborahkorlin.us

Building is making a comeback

As we reach a point where listings are scarce, we are entering a new season where building is making a comeback! It is an exciting time, as we have not had much new construction since the downturn more than 10 years ago. Since that time, it’s been cheaper to buy than it has been to build, but these past few months we have seen that trend began to shift. The number of residential properties for sale in our market is the lowest it’s been in quite some time. This has resulted in prices – especially for vacation rental cabins – increasing significantly, finally reaching a point where they are selling for amounts during the peak times in the early 2000s.

The top 3 reasons to choose building over buying

Over the last year, we’ve seen many buyers become discouraged with the market prices, which is understandable. But if owning a vacation cabin is something you’d like to pursue, there are a lot of great reasons to consider building. The best reason to pick building over buying is that you can create your cabin to meet the current trends that make it as profitable as possible. For example, a cabin with an indoor pool will gross significantly more than a cabin without one, and there are options for building a cabin with an indoor pool at a price that makes sense. It doesn’t even have to be a big cabin like it once did as the price for building a 1-2 bedroom cabin is much more in line with where the prices for buying an existing cabin are now. Indoor pools pay for themselves.

Secondly, you can pick your location. That doesn’t sound like a big deal until you consider the fact that with so few cabins, the ones in the best locations that are priced correctly will have offers on them even before they are listed due to the high demand, or multiple offers on them within a day or 2 of being listed. But there is an abundance of lots in a variety of places and many of these have fantastic views. So with the number of lots so high, you can almost assuredly find a place that will have the surroundings you want, whether that be a wooded area or one up on top of a mountain where your guests can admire the view.

Third, lenders are providing competitive options for building as it becomes more popular. We’ve had several lenders reach out to us about their construction loan options in the last few months, some of whom have revamped what they’re doing to keep up with the changing market.

If you haven’t found the vacation cabin you are looking for, building may be the best option for you. We’d love to talk with you about how we approach new construction and help you find the perfect lot for your goals!

(Or if you just want to know more about the pros and cons of building, we are here to help with that, too!)