Making the Most from Your Cabin Investment

As we near the end of 2019, we’re reaching that time of year where cabin owners who are thinking about their taxes in the spring make the decision to sell their investment/vacation property. Maybe that’s you. In terms of where the market is at, this is the time if you’re thinking about selling.

In my November blog, I talked about why that is true. Low inventory coupled with a flurry of buyers that hasn’t really slowed down despite the lack of properties to choose from has resulted in a resurgence of new construction. 2020 will be a season of building and property values will start to plateau once the construction projects takes root. So if you’re holding an older cabin, now could be a super good time to take advantage of the cycle and sell it. You can purchase something new for just a little bit more. 

The question we are hearing from our buyers and sellers now is how long until we reach the top of where cabins can cash flow positive? Until about two years ago, we were seeing cabins gross roughly 15 percent, on average, of what they sold for. So this means a cabin that sold for $200,000 was yielding a return of about $30,000 gross rental income. Then you’d have the split with the rental company if you were using one, and pay your expenses from your net income. That amount would vary based on taxes, HOA dues, amenity fees, etc. Now that same $200,000 cabin is likely to sell for $325,000 but with about the same gross rental income. You might be able to negotiate a slightly better split with the rental company, but you’re probably looking at around 10 to 12 percent of the sales price in gross rental income, rather than 15. So it will still provide positive cash flow.  We have also seen gross rental revenue increase in cabins that were upscale, fully outfitted and had amenities like a fire-pit;  therefore it is possible that the reduction is actually an increase for some.

So when will we plateau, or slow down in terms of market prices?  I believe it is likely when the purchase price rises to the point that the revenue only covers costs and no longer makes an income.  Then our properties become attractive to those who desire a true second home. Those in the market will be owners who only want revenue to defer some of the cost, whereas a true investor will look elsewhere for passive income. It will be much like you see at the beach where those who are wealthy and have discretionary excess income purchase a second home for their enjoyment and if rentals defray maintenance cost and HOA dues they’re pleased. 

But right now is a wonderful time to sell high if you bought low and a wonderful time to buy something that will cash flow positive pay for itself and give you a tax write off.  Where else can you stay in your investment and watch the sunset? Not in your stock and bonds!

If you’re thinking about buying a rental cabin as an investment, there’s a win for you, too. What’s important is that you buy sooner rather than later and prepare to hold it even if the market plateaus or enters another downturn. Even in the downturn more than a decade ago, our clients who prospered through it did so by using the rental income to pay the cabin off. Then, they waited until the market was on the upswing before selling. Even in those years when property values were low, rental income didn’t change.  In a downturn we become an even more attractive destination.  Vacationers who were going overseas playing in the Caribbean decided to stay closer to home and to drive to their vacation destination rather than fly. Americans believe in vacationing! It’s very close to mom and apple pie. And since we are within a day’s driving distance to 75% of the population of the United States.

Whenever you can it is always a good move to own the latest, greatest, newest, largest in short to have the best.  And sometimes that means remodeling, refreshing, or just buying new. As time marches on, make sure your investment stays strong and at the top of its potential performance! 

My team and I are always here to answer any questions you may have about our local real estate market. Call us at 865-654-2111! We would love to talk with you! We never mind giving you specific values on your property so you can make informed decisions. 

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.

Vacation rental cabins provide great investment opportunity

Our real estate market in the Great Smoky Mountains is known among investors as one of the top 10 places to invest for overnight rentals. Vacation cabins are incredibly popular, and we attract millions of visitors every year. What makes this region such a draw for so many is the variety of offerings. We have the Great Smoky Mountains National Park at our doorstep. Pigeon Forge and Gatlinburg work to be the absolute best at hosting festivals, parties, and other events. Outside of the holiday festivities which always leave our rental market “sold out,” our local communities play host to car shows, concerts, and all sorts of other activities throughout most of the year. On top of that, our local attractions – Dollywood is well known, but also the museums, go-cart and miniature golf, and many other family-themed local businesses that cater primarily to our visitors – provide plenty of fun and entertainment.

So over the years, the vacation rental cabins have added to the experience of being in the mountains. Our rental companies have worked hard to continually develop the cabin model so that it best accommodates guests’ needs, from everything to including game rooms with pool tables to the eventual construction of indoor swimming pool areas within cabins. The goal has always been to make the cabin as appealing as possible to guests so that it stays booked as many nights of the year as possible.

If you’ve been seriously thinking about buying a vacation rental cabin and have been watching our market these last few months, I’m sure you have noticed the trend of our region as a sellers’ market hasn’t slowed down from a year ago. In an article I wrote a year ago, I shared with you that the number of available cabins on the market had begun to slow. Since then, we’ve seen that number continue to decline while the prices have continued to climb. As the prices have reached a point that is almost in line with the price to build a new cabin, we have seen building begin to make a comeback this year.

The good news in this is that even as the prices rise, the number of tourists visiting our region has risen with it. What’s more, we’ve seen the number of people staying a little further outside Pigeon Forge rise with it. In March, local media were reporting record numbers of visitors in places like Wears Valley, as there are ways into the National Park from that side of the county that have begun to be discovered.

For sellers, the important thing to remember is that as construction continues to ramp up, the window of opportunity to sell your cabin will begin to close. Eventually new construction will be as appealing as buying something existing, so we expect to see prices level off – not drop, but stop climbing as buyers shift to a building focus. For buyers, the important thing to remember is that even though the deals of yesterday are gone, cabins are still a very strong investment option thanks to our thriving tourist industry.

If you are planning to buy or sell a cabin, or build a cabin and would like to more about the current market, my team and I are always here to help! Call or text us at 865-654-2111 and we will be glad to answer any questions you have!

Mountain home can be the perfect rental investment!

Our featured “Cabin of the Month” for February is this beautiful private mountain homemountain home situated in the heart of Wears Valley! Its gorgeous mountain views from the double back deck and an open spacious floor plan are perfect for entertaining a large group. With its 4 bedrooms each set up as master suites and large game room, this mountain home makes for the perfect overnight rental!
Conveniently located just 15 minutes from Pigeon Forge, this mountain home provides instant access to the newly opened Foothills Parkway addition! Located on easy to drive roads, plenty of privacy, and a mountain view all make this home a dream getaway for you and your guests!
If you’d like to know more about this property, click here.

If you’d like to schedule a showing at this mountain home, call or text me at 865-765-6157 or call or text my support line at 865-654-2111.

Sherwood Forest resort investment cabin offers amazing opportunity

Our featured “Cabin of the Month” is this amazing investment cabin located in Sherwood Forest resort!

Sherwood Forest resort in Pigeon Forge is one of the top rental vacation investment cabinresorts in the Great Smoky Mountains! This 4 bedroom investment cabin comes with its own indoor pool and full theater setup, providing your guests with the very best of amenities needed to make an outstanding rental experience. Indoor pools in rental cabins generally pay for themselves, and cabins that have them can produce significantly more than those that don’t because they continue to attract guests in the cold winter months at the beginning of the year.
This fantastic investment property is only 5 years old and has a low HOA fee.
To learn more about this investment cabin, click here.

To schedule a showing at this investment cabin, call our office at 865-429-2121 or my support line at 865-654-2111.

Shagbark Cabin can be your vacation home

This 3 bedroom 3 and half bathroom Shagbark cabin located on a generous 2.3 acre lot is one of the most distinct properties in all of Sevier County! The gorgeous natural vertical garden with its roughly 20 feet of creek frontage creates the perfect serene atmosphere for you and your guests.
Shagbark cabinThe cabin’s handcrafted-custom carved wood posts adorn the overly generous more than 2,600 square feet of wraparound decks. This Shagbark cabin’s 2 car garage/workshop is a rare find among cabins in the Smokies. With its plentiful storage, you’ll still have space to park your vehicles in the cabin’s two-car carport, or the mini carport/covered shed.
Other features you’ll find at this Shagbark cabin include its handsome wood burning stove, tongue and groove, cathedral ceilings, an open loft, and custom painted glass ceiling feature. These are just some of the details that make this cabin so special. It also comes equipped with “dusk to dawn” automatic landscape lighting and grade 3 granite counters, taking this Smoky Mountain retreat to an even higher level.
Located just 15 minutes from all of the conveniences of Sevierville or Pigeon Forge, this home is located in the 24/7 gated and guarded mountain community of Shagbark. The road to the cabin offers a nice, simple drive with easy access. Best of all, additional internet choices coming to Shagbark over the course of the year. Be one of the first residents to enjoy the new technology options!

Click here to learn more about this Shagbark cabin.

If you’d like to schedule a visit to see this Shagbark cabin call me at 865-765-6157 or my support line at 865-654-2111.

Enjoy the ‘Blue Smoke’ views of the Great Smoky Mountains

I am so excited! It’s that time of year when the Smoky Mountains show off that famous “Blue Smoke.”

Many of you are of Cherokee descent like me and it just seems right! The Cherokee called it “Land of the Blue Smoke.” Shaconage was their word for it.  You pronounce it “Sha-Kon-O-Heyblue smoke”!  Sounds so good, right?

When thinking about the best real estate investment ever, think about purchasing a cabin with a view of the Blue Smoke. The fact that it changes all day with the weather is superb.  Sometimes it disappears and then an hour later, mountains upon mountains appear like from nowhere.  It’s part of the joy that visitors have when they come. It is equivalent to buying beachfront property.  Of course, you may have to “wait” for the property to come along and sometimes there is a compromise on the fact the drive is a little “crazy”— but weigh it out. The drive can’t be too crazy. Maybe you should load up your grandmother and your two year old and see if any one throws up breakfast.  If so, no matter how amazing the view you need to pass. But if you can put it on your list of top wants in a property that would be good.

blue smoke

Just as a side note, where does all that blue smoke come from? Volatile organic compounds, or VOC, is fog from vegetation. The plants take in carbon dioxide and give off oxygen. The VOC’s refract light that results in gorgeous bluish tint.  They have a high vapor pressure, which means they can form vapors at room temperature. Millions of trees, bushes, and other plants create a concert of VOC’s and we have Shaconage. This is also shared with the Blue Ridge Mountain range. As I was born on the Blue Ridge Parkway in Galax, Virginia, perhaps it is in my blood. Some of you might know that Galax is an awesome mountain bush but also home of the Fiddler Festival known nationwide for great Bluegrass.

But back to great investments.  So what is a view worth in dollars and cents? An appraiser will often not give value for a “view,” but in reality a lot without a mountain view might be worth $40,000.  The same size lot on the top of that resort will be sold for $90,000.  And rental revenue from a cabin with no view will be $70,000 a year on a typical well outfitted 3-bedroom with a view. Add another $15,000 or more of gross revenue a year. It makes me love Shaconage even more!

However, do not despair if you cannot find the mountain top view of Blue Smoke. I have several alternatives for you that will get you very close to if not on the mountain top itself. I can help you find a cabin on a water amenity, such as a creek or waterfall, or perhaps a place on a small mountain with a lake of its own! Find a cabin with a pristine private view where your guests feel like they are Adam in Eve in the garden of Eden before they had kids! When you find the private setting, place a fire pit or a garden to meditate in, or a walking path to go exploring.  And last of all stack your cabin with fantastic amenities such as giant screens with a  home theater, crazy arcade games, driving games, shooting games, putt- putt courses, sauna’s, and gourmet kitchens to make our local chefs envious.

If you want to learn more about the science behind Blue Smoke, check out this article on the subject here.

Starr Crest Resort cabin can be a fantastic vacation home or top rental investment

Starr Crest Resort cabinOur “Home of the Month” pick for May is this perfect vacation Starr Crest Resort cabin.

With the means to pay for itself when you’re not using it, this Starr Crest Resort cabin is a gorgeous true log cabin located on an over sized lot!  The lot is very private, which is a rare find for Starr Crest! Make this your vacation home or a rental investment property.
Offering front and center views of the famous Mt. LeConte this 1,500 square foot cabin on Lone Eagle is conveniently located just under two miles from the Pigeon Forge Parkway and is only a few minutes more to the Great Smoky Mountains and Gatlinburg. This cabin features walls of glass with handsome wood interior, ample parking, and a spacious floor plan. Coupled with the great community amenities at this Starr Crest Resort cabin, it makes for the perfect mountain getaway. Best of all, the cabin has the potential to be a top performer on a rental program or rent it yourself on VRBO.
The resort’s HOA includes pool and playground access and takes care of the wide and easy-to-access roads.

You can see more details about this Starr Crest Resort cabin here.

If you’d like to schedule a visit to this Starr Crest Resort cabin, call me at 865-765-6157 or my support line at 865-654-2111.

Make this 2-bedroom cabin your vacation home

For our March “House of the Month,” we’ve selected this beautiful 2-bedroom cabin in Parkside Village.

2-bedroom cabinNow you can own your own perfect getaway with this cozy two bedroom and two bath cabin smack dab in the center of Wears Valley! It’s located just minutes from town and offers easy access to either Townsend or the National Park. This is a mountain lover’s dream!

Well maintained and newly stained, this 2-bedroom cabin’s open floor plan will offer you the chance to relax with family and friends or enjoy a nice game of pool in the downstairs game room.

You can learn more about this 2-bedroom cabin here.

Turn this into your cash-flow nest egg today! Contact me at 865-765-6157 or call my support line at 865-654-2111 to visit this 2-bedroom cabin.

This 1-bedroom cabin is March feature

For our March “Cabin of the Month,” we’ve chosen this 1-bedroom cabin nestled in Parkside Village.

Taken care of by a great owner, this 1-bedroom cabin offers the perfect opportunity to get away from it all and just relax in the quiet of the woods. Located in the heart of Wears Valley, this is your1-bedroom cabin chance to own your very own quaint one bedroom and one bath. Make it your second home or continue to enjoy it as an income producing rental property!
The great open floor plan flows well and is perfect for you and your closest family. Adorned with small handcrafted details that really make this cabin stand out from the rest. Step out onto your back deck that is wonderful for grilling or enjoying a cup of coffee on a crisp Tennessee spring morning.  And of course, it comes equipped with a covered hot tub so that you can enjoy a relaxing soak, rain or shine!

To learn more about this 1-bedroom cabin, click here.

If you would like to schedule a visit to see this 1-bedroom cabin, contact me at 865-765-6157 or call my support line at 865-654-2111.