If you love visiting the Great Smoky Mountains at any time of the year, you probably already know our region is one of the top tourist attraction areas in the world. In the last few years, we've seen the number of people who have visited here reach into the millions, with as many as 12 million people - a new record set in 2019 - coming to hike the Smokies, play at Dollywood, shop in Pigeon Forge and Gatlinburg, or visit one of the hundreds of attractions our area has to offer visitors. From car shows to live theater and music to pleasant walks and drives through the Great Smoky Mountains National Park, our area has so much for visitors to do almost the entire year.
The glue that holds it all together is our vacation cabin market. With very few exceptions, people who come here for the activities and attractions want to stay in a log cabin while they're here. So if you are someone who is looking for a way to invest in an idea that will generate additional income for yourself without adding to your budget, vacation cabins may be the perfect fit for your goals. Many of our clients have found success with renting vacation cabins to our tourist guests.
The best part is that even for people who just want to have their own place to stay when they are here on vacation 2-3 times a year is that if they are running those cabins on a solid rental program the rest of the time, the cabins will at least pay for themselves. This means other people who stay at your cabin are paying your mortgage (and all the upkeep fees that go with it!), paying for your vacation, and creating the potential for extra income for you and your family the more it is rented.
So, what do you need to get started? Well, the first thing is to figure out what style of cabin best fits your personal goals. Are you looking for something that you would use personally more than for renting, or do you want to just make the most money you can with the cabin by renting it out? Do you want a cabin in the woods surrounded by trees for privacy, or is being in a resort where you can dive into the community pool more your cup of tea? Will your family and friends be hitting you up for time at the cabin, or is this a place no one you know is close enough to visit? Are you looking for a smaller cabin to get started, or do you believe bigger is better and want to go all-in for a place that can make big bucks? Figuring out all of these things ahead of time will help you - and us - spend the time on your adventure as efficiently as possible, looking at the right places in the right areas.
If you are looking for something beyond just a vacation cabin that you intend to mainly keep for yourself and your closest friends and family, our region has plenty to offer in that category, too. You are going to work from a bit more rigid set of criteria, though. Some of the items you will want to consider:
Location - Everyone knows that one. The most important part of real estate is location, location, location. In terms of a rental cabin this means close to as many of the major attractions, but not too close. Remember, people who want to rent a cabin in the woods want it to be, well, in the woods. So if it's in the middle of a typical residential neighborhood or has a view of the condos and the Pigeon Forge Parkway, it's not going to rent as well. Likewise, if it takes more than 30 minutes to get back to town or the National Park, most people aren't going to pick it over the one five miles closer to the things they want to do.
Amenties - The more amenities your investment cabin has, the better. This includes the obvious such as mountain views, a pool table and hot tub, and sleeper sofas so more people can stay in the cabin to the not so obvious such as wooden log bed frames, arcade games around the game room, a theater room, and a fire pit where your guests can gather outside and admire the mountains while cooking hot dogs and burgers on the grill. If you are able to go after a larger cabin, the not so obvious is also going to include an indoor swimming pool that will attract guests during the cold winter months of January and February while everything is shut down. Your cabin will rent at times other cabins won't if it has an indoor swimming pool.
Fees and service costs - These include expenses like monthly HOA charges, property taxes, utilities, the mortgage, etc. Generally the cheaper these are, the more money you can make - but some of these costs can positively affect your gross rental incomes so you don't want them to be almost nothing. For example, a higher HOA may mean your water and sewer is included, or it could mean you're helping pay for a community clubhouse and/or swimming pool that is shared by the resort you're in. So these community amenities add value - and income - to your cabin.
Rental potential - This is absolutely the most important component of finding the right investment cabin, as it encompasses all of the previous categories. More than that though, it has to have the right look and layout to attract guests looking for comfort during their stay. Remember, these cabins are the hotels of the Smokies. This means they have to provide luxury and the feel of being in the woods. They have to have the right features that photograph well for marketing the cabin to overnight renters. Stainless steel or black appliances photograph better than white appliances. A larger kitchen space for cooking is more desirable when you are sleeping more than 6 people. Most of all, everyone wants to have some semblance of privacy at night so cabins with at least semi-secluded sleeping spaces are generally preferred. If the bedrooms in the cabin each have their own bathroom, that's even better. Lastly, it's important to remember that even if the cabin isn't making a lot of money when you tour it, what matters is that it can make more. This is what we like to call "buying someone else's mistake." When you can make simple changes to the cabin without having to put a lot of money into it, the cabin will be listed cheaper than what a top performing cabin will sell for and you can turn it into one that you can list for far higher when you're ready to move on to a bigger cabin in a few years. (That's what many of my investor clients do!)
If you would like to learn more about our rental cabin market or see cabins in our area, contact me today by phone or text at 270-452-1473. I would love to help you on your adventure!