Understanding cabin rental income

cabin rental incomeIf you’ve ever looked at vacation cabins in the Smokies and wondered how much cabin rental income they bring in, you’re not alone.

When buyers contact me about buying a vacation rental cabin that is at least partially for investment purposes, the hottest question on their mind is how much a property will gross in cabin rental income! They are focusing right where they need to: finding a property that will perform well on rentals is essential!

Key is to find a property that will perform well and is a good buy

Sometimes the next thing I hear from them is, “I only want to look at cabins that have a great rental history.” I love their spirit! However, as I share at this point in the conversation with them, just because it isn’t earning top-end cabin rental income doesn’t mean the property won’t. As a matter of fact, I probably am most interested in finding them a cabin that someone is making a mistake on because my staff and I are able to analyze the mistake and correct it.

What determines the ability of a cabin to generate good rental income?

The ability of a cabin to generate revenue is based on a variety of criteria. Perhaps the current owners prefer to use the cabin more often than a new owner will. Maybe the cabin doesn’t have the right décor to attract guests. Sometimes it’s not being marketed as competitively as it could be. Once we identify the exact causes of a low cabin rental income report, we can determine whether or not it’s something that can be corrected before we decide if this is the right cabin for you. If you purchase a cabin that is already performing at the top of its potential, you are most likely going to pay the highest price possible. This is not usually how I like my buyers to spend their money. I love to find a cabin that we can purchase, say, for $300,000, then make about $10,000 worth of changes to make it worth $350,000. And where it was doing a gross rental revenue each year of $40,000 before, now with our changes it is going to reach $60,000. That is the win we are looking for!

We follow the performance of cabins in the rental market

Over the years, I have put together a list of resorts based on discussions with past clients, with rental companies we maintain great relationships with, and from reviewing listings based on how they tend to perform on the rental market. From those discussions and reviews, I am able to keep track of how the rental cabin market is doing overall and which ones are producing the highest levels of income overall for their clients. When it comes to resorts, the ones that generally perform the best on the rental market are located in places that are easily accessible, have great mountain views or pristine Smoky Mountain forest views, are close to shopping and/or tourist attractions, or some combination of the above. While this is not always true for every single cabin, it is a great rule of thumb for our area. One to two bedroom cabins on rental with the strongest performing resorts will be routinely earning up to $45,000 in gross cabin rental income, while 3 to 4 bedroom cabins in the same locations will start producing at or around $60,000 and go up from there. Larger cabins will produce $100,000 and above in cabin rental income, provided they are set up with the right combination of amenities, marketing, and views of the mountains!

The “medium range” resorts tend to do a little more than half what the top-end resorts collect in cabin rental income based on cabin size, number of rooms, and amenities. Meanwhile, 1 to 2 bedroom cabins at the lower end of gross rental amounts will bring in between $18,000 and $30,000 and 3 to 4 bedroom cabins will generally produce between $25,000 and $38,000, on average. With that being said, I do tell prospective buyers not to discount a cabin based on rental history – even if it’s in a lower producing area – until we’ve had a chance to look at why that might be happening. For example, if the cabin is on a high point in the resort and has a great view into the Smokies, it could produce a great deal more than the average for that particular area. Or maybe it’s being used primarily as a vacation destination for the owner during peak season. In that case, the next owner looking at it strictly for investment purposes will do far better with rental income than the current owner has. So it’s an art and not a science, but the performance of cabins can be predicted and the search for the “perfect” cabin will be an analysis of a group of important characteristics. We do have a report that just targets those characteristics. It is called “What Makes a Cabin Profitable?” You can read that article here.

If you would like to learn more about how to create the highest level of cabin rental income possible, or need help finding one you want to invest in, I would be glad to talk with you!

Fantastic investment cabin opportunity

Our first “Cabin of the Month” for 2017 is an immaculate 2-bedroom, 2-bathroom investment cabin at Bear Creek Crossing resort.

investment cabinThis approximately 1,600 square foot investment cabin has produced more than $45,000 in gross rental income! Built in 2006, this investment cabin has not only been very well taken care of but was also masterfully designed to be one of the largest two-bedroom cabins in the area! It features two master suites – each with its own bathroom – a large great room with soaring cathedral ceilings, and an eat-in kitchen. The wrap-around deck is wider than most cabins so it offers plenty of space to sit and enjoy the mountainous setting looking out over Bluff Mountain. What’s more, the deck provides privacy along one side, which is an unusual feature for cabins in this resort.

This investment cabin was built with the highest quality true log materials and has a beautiful finish to its tongue-and-groove design. The floors are made from high quality hardwood, and the cabin comes furnished with custom-built furniture. Also, the cabin has been freshly stained with high-quality stain product.

Upstairs, the large game loft comes furnished with a pool table, an arcade game, football and Foosball tables! The indoor sauna is an added bonus! The cabin also includes a large custom-built owner’s closet. Located on Timberwolf Way, this cabin is just 12 minutes away from the Pigeon Forge Parkway with perfect access to back roads.

Of course, the resort also offers a swimming pool and other outdoor activities for you and your guests to enjoy! This is the perfect opportunity for investors. The rental income potential means the cabin will pay for itself. You will not be disappointed in this investment cabin!

You can click here to learn more about and to see more photos of the investment cabin and resort.

If you would like to visit this investment cabin, feel free to call me at 865-765-6157, my support line at 865-654-2111, or my office at 865-429-2121.

Sky Harbor cabin can be a fantastic investment opportunity!

Sky HarborIf you’re looking for a great investment opportunity, you won’t want to miss seeing December’s “Cabin of the Month” in Sky Harbor.

This quaint two-bedroom, two-bath cabin can be an awesome way to supplement your income while also providing you the perfect vacation spot for when you want to visit the Smokies. Tucked away in the conveniently located front section of Sky Harbor resort, this cabin is close enough for some shopping in Pigeon Forge or for hiking around some of the trails in the Great Smoky Mountains National Park. Located off the Spur, this cabin is nestled just 10 minutes from either Pigeon Forge or Gatlinburg. The short distance means this cabin offers convenience to you as well as your guests who want to visit either community or the National Park. Because of its proximity to the different offerings of the local area, Sky Harbor resort has a loyal following of guests looking to rent cabins close to multiple activities.
With more than 1,400 square feet of living space in this two-story true log cabin, this home offers a majestic tongue-and-groove design adorning the walls and dramatic, soaring vaulted ceilings. In addition, large timbers, gleaming wood floors, a wall of glass, and a deckedpic11 out game room complete with a pool table make this cabin a strong contender for attracting renters. Your guests can enjoy a cozy evening watching television by the fireplace, a night of fun around the pool table, or relax in the hot tub on the spacious private deck.
Best of all, this Sky Harbor cabin has demonstrated consistent rental history of $38,000 and has plenty of room for growth! With a small bit of investment, you can make some subtle changes that will increase the income potential. We can show you how you can make your new second home/rental property a fantastic income producing investment!
You can learn more about this cabin here.

 Call me at 865-765-6157 or my support line at 865-654-2111 if you would like to visit this property or just have other questions about the rental cabin market. I would love to take you to Sky Harbor see it!

New ‘Mountain Mile’ center coming to Pigeon Forge

For the last few months, I’ve been sharing all the fantastic opportunities that are coming for people who want to own newly constructed rental cabins, both in areas with already established resorts as well as areas where no resorts have existed before. We are working with developers and builders to build new cabins in Sherwood Forest, Black Bear Ridge, Hibernation Station, and Mountain Shadows. I’m very excited to see all the new building coming back to the area after the downturn of the market in 2008 when construction all but stopped.

In our area, there are so many great reasons to own a rental cabin in the Smokies, and I’ve talked about many of those before. But above all else what makes this area such a great place to own vacation rental property is the tourist appeal. The Great Smoky Mountains National Park is the most visited national park in the United States, surpassing the second most visited national park by an almost 2 to 1 ratio! In 2015, nearly 12 million people visited the Smoky Mountains – and that doesn’t include the number of people who just come to visit the tourist attractions of Gatlinburg and Pigeon Forge! Between Dollywood, the number of specialty shops, musical shows, and other activities, our region is one of the most popular tourist sites!

‘The Mountain Mile’

What’s more, the number of opportunities for things to do and see in our area is increasing all the time. One of the most exciting new developments is “The Mountain Mile,” a 1,000,000 square foot stretch of retail and restaurant space spread over more than 174 acres. The new endeavor will include about a mile of frontage along Teaster Lane and is located next to the Cal Ripken baseball complex. The Island and LeConte Center are also close by to the new development. If you haven’t been to The Island recently you owe it to yourself. It is really delightful! The Cal Rip-ken baseball complex and The Rocky Top sports complex have been big hits with our visitors as well. “The Mountain Mile” will be a fantastic addition to that area!

You can learn more about the plans for “The Mountain Mile” here.

The continuing addition of quality entertainment, shopping and sports venues increases the value of your property as well as produces renters for you! I love that when these national companies have done market studies it has led them to us! We knew that we were a wonderful and special place. It’s affirming that their numbers and research agree with us!

We are looking forward to the development of “The Mountain Mile” and all it is going to add to our region!

Custom built home is ‘Cabin of the Month’

This custom built cabin in the Smokies can be the perfect investment opportunity!

 If you’re looking for jaw-dropping, completely breathtaking views of the Smokies at a cabin just minutes from Gatlinburg, you’ve found it in this custom built home on Ridgeline Way! Gatlinburg is one of the fastest growing tourist destinations in the U.S.!
Located in Laurel Highlands, this custom home is a top-of-the-line pristine construction. It’s close to the new Rocky Top Sports Complex and is directly across from the Great Smoky Mountains National Park which means it offers excellent rental income potential. After a day out on a hike or at the sports complex, you and your guests can enjoy a game night around the pool table or at the arcade while relaxing in the basement, or sit on the deck and relax while admiring the magnificent views!
 custom built cabin
This magnificent vacation or second home has been painstakingly hand-hewn with a 100 percent hand-sanded tongue and groove pine interior.  Paired with Australian Cypress wood floors, these beautiful features really make this cabin stand out and will be a draw for your vacation guests! The cabin’s three-bedroom, three-bathroom layout sets on just under two acres and offers more than 3,300 square feet of luxurious enjoyment on multiple levels. The cabin’s spacious rooms have 10-foot plus ceilings as well as large walk-in closets. No expense was spared in the construction of this custom built home, starting with the poured concrete walls and reinforced rebar, dove tail corners, all the way to the three covered decks and commercial grade cooking appliances! It also comes outfitted with a wet bar, a 700 bottle wine cellar. The decks have recently been paired with aluminum railings. Instant hot water and gleaming granite counters take this cabin to another league.  Other features include cathedral ceiling, ceiling fan, a large master bedroom, a loft, recreation room, and washer and dryer connections.
Make this your Smoky Mountain “Dream Home” today! You can view more details about this cabin here.

If you would like to visit or learn more about this custom built cabin, call me at 865-765-6157 or my support line at 865-654-2111.

New ‘Hibernation Station’ resort can be your retirement home

Looking for a cabin you can eventually make a retirement home? Hibernation Station could be the perfect place for you!

If you’ve been following our newsletter and blog articles the last couple of months, then you know the exciting news for us this year has been the new cabin construction getting started! If you are looking for a cabin in a brand new resort that can serve as a second home and eventually, a retirement home, then Hibernation Station is a resort you will want to consider.

Located near Wears Valley and Walden Creek, Hibernation Station will include as many as 30 cabins when it is completed. The great thing about this new resort is that the lots are very large, so the cabins built there won’t be “cookie cutter” designs. It’s still a bit cost prohibitive to build small cabins, but we have designs for 3, 4, 5, 6, 8, 10, and 12 bedroom cabins. We’re far enough long in the process that new buyers can tweak a few cabin floor plans that we have already built in other locations.

Hibernation StationAlso, because of the size of the lots, each cabin in Hibernation Station will have at least some privacy. You won’t see cabins right next to each other like you do in other traditional vacation resorts that specialize in overnight rentals. We’ve also made creating a resort where people can live if they choose to one of our top priorities. We’re including some unique amenities that are meant to appeal to owners in a way other cabins usually don’t, hint- think garages!!

You read that right – cabins in Hibernation Station will include a garage for people who plan to move into them at some point. They can be a great retirement home down the road, but you’ll be able to increase your rental income in the meantime while the garage is being utilized as a game room for your guests. In fact, if you just want to move in right away once it’s finished, you will be able to do that! Live it in for a few years and then rent it out if you prefer. Or make it your second home if you like. These cabins at Hibernation Station will be built with flexibility to meet several goals and change as the seasons of your life change.

Speaking of the game room, the amenities in these cabins at Hibernation Station will rival anything you might find in resorts like Black Bear Ridge – indoor pools (these are the biggest draw in vacation cabins right now), tongue and groove designs throughout, walls of glass, lots of use of log trim, etc. Furniture comes included in the new constructions and the décor will be the highest quality, with ceramic tile slate and rock mosaic showers. Hibernation Station cabins will generate as much in gross income as anything we’ve have built in other areas in Pigeon Forge and Gatlinburg. A three bedroom cabin is producing $80,000 and more!

Our builder for this resort is a well-known and well respected builder in our area. Mountain Cabin Builders LLC, founded by Jeff Harris, has been very beloved by many of our past clients who have had cabins built. They have asked Jeff to come back and create additions after their new home or cabin was finished. Jeff has been building homes and cabins in our area for almost 20 years and is a high caliber custom builder. We are very excited to be representing him on this project!

One other thing about Hibernation Station resort – we are building a spec cabin, which is very rare to be able to do these days. But because this is a new resort we want our potential buyers to have something they can see to help them visualize what their own cabin could look like when it is done.

You are going to find that building a new cabin is a bit more expensive 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. For these cabins, the personal touches we’re putting into them to serve as second or retirement homes is something you won’t find too much of in the Smokies. The bottom line is that new cabins outperform older cabins.

Our past clients who have transitioned to newly built cabins can testify to that. About half of our new construction 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!

Call me at 865-765-6157 or my support line at 865-654-2111 if you want to learn more about Hibernation Station.

You won’t want to miss seeing this investment opportunity!

Our Cabin of the Month for October is a must-see fantastic investment opportunity!

fantastic investment opportunityThis gorgeous 4-bedroom, 5-bathroom cabin on Towering Oaks Drive is a fantastic investment opportunity! With an already strong Vacation Rental By Owner (VRBO) annual rental history income of more than $70,000, the property can absolutely pay for itself!
You and your guests will be dazzled by the amazing view from the deck of the home while relaxing in the hot tub. You can enjoy the warmth of the fireplace while sitting on the couch, or challenge a friend to any of the games available within.pic5
Conveniently located in Sterling Springs, this cabin is only five minutes from Sevierville and 10 minutes from Pigeon Forge.
Just recently stained, this investment opportunity boasts nine-foot high ceilings in its open great room and offers a generously spacious kitchen, gleaming tongue and groove walls with solid wood floors, and of course, the over-the-top game room completely decked out with pool table, arcade and air hockey. With a finished basement, this cabin provides more than 2,200 square feet of living space.

If you would like to know more about or schedule a visit to this fantastic investment opportunity, call me at 865-765-6157 or my support line at 865-654-2111!

New cabins being built at Black Bear Ridge

I’m so excited about the new construction in the resorts this year (as announced last month), and leading the way in the new development projects is Black Bear Ridge.

black-bear-ridge-resort-sign

Many of you know Black Bear Ridge has been one of the most popular resorts in our area mostly due to the location, being just an easy 10 minute drive from all the attractions in Pigeon Forge.  The resort suffered a terrible fire several years ago and many cabins were damaged or destroyed in this fire.  The really good news was that it occurred on a Sunday and no one was injured.  The other good news was that my clients who lost their cabins in Black Bear Ridge Resort recovered fully with wonderful insurance that paid them for rental proceeds lost and paid them to build their cabin back.

Now, there is good news for you as well. With so much new construction planned in Black Bear Ridge, you now have an opportunity to own aBlack Bear Ridge new cabin in the resort. What’s more, most of these will have pools on the lower level! Many of them have outstanding views as well.

These cabins at Black Bear Ridge are being built by investors who will finish them and then sell them to new owners.  You can choose one while it is being completed. If you time it right, by the time your loan is completed, your cabin will also be finished. Some of these will be just right for second homes. Some will be perfect for rental programs generating heavy incomes due to the amenities such as a game room, indoor pool, large bedrooms, wonderful views, and of course, superb location. They are all true log on the main floor and are finished with gleaming tongue and groove walls that renters absolutely adore! 

The new cabins at Black Bear Ridge come equipped with fireplaces, granite counter tops in the kitchen, and large attractive ceramic showers. Each floor plan is different and the number of bedrooms and sizes vary greatly as this is a unique situation where the size is “grandfathered in,” based on what cabin it is replacing.

Black Bear RidgeIncomes for these new cabins at Black Bear Ridge will vary based on how you finish your cabin with games, a theater, a hot tub, etc. Some of the three bedrooms will bring in incomes of around $70,000. Some of the four and five bedrooms will have incomes in the $100,000 and higher.  Again depending upon what you are offering and how you are renting your cabin through. Many rental companies are interested in renting these cabins as they would love to have a cabin with an indoor pool as part of their offerings. We have several rental companies who have expressed interest in offering a high percentage split to new owners as a means to entice them to rent the cabin with their rental company. We are happy to help you navigate those decisions should you decide on one of these cabins.

It is also of interest that recently the lenders have begun to consider the income of a cabin when figuring out how much mortgage you can afford.  They will allow a percentage of the income to be considered. This often will allow  you to qualify for more cabin than you would normally expect.

Finally, let me share with you a secret about choosing a new construction cabin: sometimes when viewing these cabins you need to go see finished cabins in order to understand what you are seeing. When buying a cabin without décor and furniture or finishing touches like lighting, landscaping, paving etc. it takes more of an imagination to see the finished product. But for those who can in vision it a super great value can be had – the latest floor plans, the best amenities, new everything! You might want to consider taking a look at Black Bear Ridge! If you’d like to know more, I and my staff are always available to answer questions.

Call me directly at 865-765-6157 or my support line at 865-654-2111. We will be glad to meet with you about the available lots in Black Bear Ridge!

Investment Property or Vacation Cabin?

Are you thinking about buying a vacation cabin in the Smokies?

vacation cabinLast month, I wrote a blog about the key steps to helping you decide if you are ready to own a vacation cabin in the Great Smoky Mountains. If you are, congratulations! You are about to start your very own adventure. The next thing you need to decide is what you are going to do with your new piece of property once you claim it.

You have two ways to go with your “second home” cabin. The first option is to keep the vacation cabin as a personal treasure, refusing to share it with anyone but friends and family. Alternatively, you could decide to put your cabin on a rental program for visitors and tourists. That will be an appropriate choice for many of you. It’s tempting to keep the cabin to yourself in order to be able to enjoy it anytime you want. However, it is incredibly more lucrative to you allow a rental company to rent your vacation cabin out when you are not staying here. I also encourage vacation cabin owners interested in generating rental income to work with rental companies in the area. This way, you have someone watching after your vacation cabin day in and day out and you can generate substantial income that will pay for your mortgage, pay your utilities, and best of all, provide you a profit that will supplement your income.  If you are able, you may prefer to rent your vacation cabin out yourself through websites like Vacation Rental By Owner (VRBO) if you like. That is a whole subject for another article which I will cover in an upcoming blog.

For now, let’s look at the differences between holding our cabin for just you and your family and friends versus allowing others to rent it as a vacation cabin.

Here are several considerations I am frequently asked about when showing rental cabin property:

  • How hard are renters on a vacation cabin when they are staying in them – do I wish to share? Well it depends. The really good news is that many of the materials cabins are constructed out of are very, very durable. Actually, this is the largest objection our cabin dreamers have. “But the renters will tear up my cabin!” We have not found that to be the case if you will follow a few important guidelines. You will find that log walls and wood floors don’t scuff and show wear like your residence, which is full of dry wall and surfaces that damage easily. The tongue-in-groove is practically indestructible and the log railings are already distressed, so when a suitcase nicks them they look further aged – oh how beautiful! Stone fireplaces, hardwood floors, granite counter tops, slate looking ceramic tile, furniture that is made of twigs, log beds and bunks, etc. – these are all basic elements of cabins in the Smokies! So with a careful eye to choosing material that wears like iron you can maintain a cabin over many years and it will seem timeless.On the other hand, materials to avoid include Chinz, light weight fabrics on furniture, light colored, solid fabric, and flimsy, poorly made furniture. A good rule of thumb to remember is you might as well not even buy it if you will be replacing it. Instead of shiny, slick surfaces that show scratches, opt for heavy, already distressed finishes. Also, carpet is an absolute no-no. You just can’t keep it from staining unless it looks like cameo.So we’ve covered the décor and structure, but there are other factors to look at when answering the question, “How hard are renters on a vacation cabin”? Our experience has been that low-end vacation cabins renting for the lowest nightly rates tend to be treated the harshest. Also, cabins that would be attractive to “frat/sorority parties” fall in that category. The cabins most cared for by renters are those who cost the highest nightly rates. We also find that renters who pay for a vacation cabin in the higher price range don’t damage fine items. They know how to turn on a gas fireplace and light a grill, whereas the renter who is paying the discount rate often makes bad decisions that might end up damaging a vacation cabin. Therefore we encourage our owners to purchase as “nice” a cabin as possible and outfit it with as high quality and upscale of items as possible in order to appeal to the more discriminating, neat renter. This is not a perfect plan, but it is a really good one. Also, I would encourage you to pay attention to your décor – who are you attracting? The rental company you choose also plays a part in this. Who does your rental company market to? We find certain companies focus on “packing them in.” Their vacation cabins are as my grandma would say, “rode hard and put up wet”. You will need guidance so spend some time considering your rental company’s approach. We have a handful of companies that market to the “high end” and are very particular about who they rent to. Their vacation cabins are pristine when guests arrive and the guests rise to the occasion leaving the cabin in great shape.
  • Can I get into the cabin when I desire to use it myself? Yes, rental companies will allow you to block off anytime that you and your guests would like to come and enjoy a vacation. Most rental companies will not restrict you. If you are interested in realizing as much income as possible however, we advise that you plan your vacation in the “off–season” moments. Try to never come on the holidays. Actually, the nightly rental rates will sometimes double for holidays. If you can be spontaneous, the best option for you is to watch your booking online so you can run away to your mountain getaway between rental bookings. If you have a very difficult schedule and can only come when your responsibilities allow, it might be best to own a vacation cabin as a second home instead and just rent out to friends and family, or even no one at all! It can be your secret getaway that refreshess your life and gives you the energy for the high level at which you are required to perform day in and day out.
  • What about stolen items? Our clients report they have very little stolen. Though again, it seems to follow high end cabins vs. the Birds_Nest-14discount low end vacation cabin. Someone paying a high nightly rate doesn’t need your bear soap dish, but someone staying as “cheap as possible” may want to add to their savings by swiping a bear statue. Rental companies have an inventory list and are supposed to check it, but it is difficult and not always perfect. This is another reason that interviewing and checking reviews and references for rental companies is critical. We are happy to guide you to some wonderful companies to interview and consider. You might be surprised to find that our VRBO clients do the best. It seems that when a renter talks to the owner they feel a heightened since of responsibility and accountability.If you stomach is turning over just reading this month’s installment in the series and your imagination is going wild, then you need to really reconsider whether a second home is a better choice for you than an investment cabin. You can make money another way and enjoy your vacation run away!
  • Is maintaining a cabin a nightmare? Is it intense? Is it expensive? Maintenance is important as this is an investment and also will bring more rental income if it is in tip-top shape. But here’s the good news – we have a huge local industry built around maintaining property for long-distance owners. Most of our cabins are owned by out-of-town folks. Around here, there is someone to do everything. We even have people in the Smokies region who are willing to work as supervisors. These are people you can hire to check in on your cabin. They will send you pictures, organize and arrange your cabin, and coordinate maintenance. If you are working with a rental company, they also will be onboard for helping with this aspect. If instead you love to take care of property yourself – if you are a “do-it-yourself” type ready to go with a paint brush in hand, if a shower to tile just makes you smile, then you can save money, make money, and enjoy the Smoky Mountain all at one time. (If this describes you, then you are probably a really good candidate for VRBO.) It isn’t extremely expensive to maintain a cabin. You do need to budget for a really good high end staining of the exterior every 5 years. Don’t skimp on the stain either, Sikens is a product all others are compared to. If you go cheap, it will need restaining in 2 years.While we’re on the subject of exterior cabin maintenance, you will also need to keep it under a pest inspection service contract. Wood bees and other insects can destroy a cabin in short order if someone isn’t keeping it treated. Every once in a while, a deep clean needs to be done and windows reached and cleaned.

So that’s it. Making money with cabins is such a wonderful way to enjoy your vacation home, and can give you the resources you need to enjoy a vacation of your own! But it’s important to go into the cabin buying process with your eyes wide open. I hope I have given you some items to consider that may help you decide if you are ready to own a vacation cabin overnight rental. Just a warning, they are contagious. I have many owners who after getting their feet wet with one now own three and four.

Of course, I also have very happy second home owners who wouldn’t think of allowing someone in their special mountain home. They too are benefiting from owning a cabin. Whichever way you decide to go with it, cabins are meant to be enjoyed, so there’s no wrong decision as long as you are happy owning one. If you don’t think you will enjoy it, then that’s okay, too – it’s not for everyone.

If you would like to learn more about owning a vacation cabin or if you have other real estate related questions, please call my support line at 865-654-2111 or my office at 865-429-2121.

Owning a Cabin – Getting Started

Have you ever thought about owning a cabin?Is owning a cabin for you?

Let’s face it – owning a cabin is not for everyone. It takes a lot of planning, work, and commitment to maneuver through the process. So, maybe you’ve thought about owning a cabin. We know they have been a great source of rental income for a lot of people, and it can be for you, too.

Are you ready to purchase a rental cabin in the Great Smoky Mountains? Let’s find out.

1) Are you are on a first name basis with Dolly –  just kidding, but what about the train operator in Dollywood?  No seriously, do you come to the Great Smoky Mountains multiple times a year and pay others to stay in their cabin?  If you answered yes, then this article is for you.

2) Have you paid off the home you live in, or have you paid it down significantly enough to provide you have what lenders call a low debt-to-income ratio? It’s easy to find out whether a lender will lend you money for a second home or an investment home. If you don’t know a lender or want to check out a few other options for lender financing, just give us a shout and we will send you the names of a few lenders that you can email or call about owning a cabin. They can quickly let you know if they would be able to make a second home loan for you.

3) Do you have a bit of cash that is not set aside in a retirement account?   The down payment on a second home or investment loan is around 10 percent to 20 percent of the amount that you are paying for the cabin.  So if you are paying $200,000 for a cabin, you will need anywhere from $20,000 to $40,000 for the down payment. It really is important for the down payment to come from discretionary funds and not from a retirement account. Though we can find you a cabin that will give you an income – owning a cabin is a means of funding retirement for many of our investors – it is best for it to be the secondary source of your retirement funds. You want the income from owning a cabin to augment and fill in your retirement financial goals, not replace the ones you have already set up for yourself. Remember, you will also have closing costs associated with the loan when you close. It’s not uncommon to ask the seller to pay some or all of those costs for you but it’s important to be aware of what those costs are.

4)  Have you and your family always dreamed of having a place that you could call your own in the Smokies? Of course, you’ve been busy taking care of that family, putting braces on kids, sending them through college, and are just now starting to see the light at the end of the tunnel. You are about to be free of some of the financial responsibilities that you have had in the past. You are in a great position to invest that money, time and energy in real estate.  If you go ahead now and make owning a cabin a part of your future, it can become a legacy and blessing for your family as you enter a new season of life.

5) Can you handle allowing others to serve your needs to take care of your investment cabin? Whether it is staining your cabin, cleaning your cabin, or treating your cabin for wood bees or pesky insects, if you don’t live here you will need to be comfortable with allowing others to help you maintain your cabin. Otherwise your happy cabin in the woods will become a burden to you and you will not be smiling when you think about it.  Here is the good news, though. We have thousands of cabins owners, so we have a whole group of honest, hard-working contractors, cleaners, pest controllers, and other service providers who make their living taking care of your investment property.  The local service industry is how many, many Sevier County residences feed their families and have a good life. We have great relationships with these folks and can give refer you to our favorite folks for every need you have.  But you do have to let them do the work or when you come on vacation you will be working all the time!  I know some of you are like me and recovering workaholics. I’m not cheery unless I have a bit of work to do.  That is okay. Enjoy doing the work when you can, but realize you still are going to need some help.  If you can accept that, you are a great candidate for owning a cabin.

Marketing_Picture-3If you were able to answer yes to the questions above, you can begin dreaming about owning a cabin.  So, let’s review. Once you have your own cabin, you can put that money into your investment purchase and start saving money on vacations. I can show you how. Also, you cannot be late on payments or have uncollected debts if you are going to qualify for a second home loan. You don’t have to be rich, but you do need to have a record of responsibility with your finances to be allowed to borrow the money you will need from the bank.

So welcome to dreaming! Next month I will show you how people succeed with their cabin investments.

In the meantime, if you have questions about owning a cabin, I would be glad to help answer them for you.