When people call about buying vacation or investment property, one of the first questions I am often asked is, “Should I buy a condo or a cabin?” The answer is, “Yes, you should!” Both have great, attractive qualities and serve specific goals, so it really comes down to what your personal preference is for owning a home in the Smokies.
Why You Should Buy a Condo
Condos are the best investment when knowing that what you’re getting will be low maintenance is the most important concern. When you buy a condo, you don’t have to worry about who is taking care of the roads or whether someone may be thinking about building on the next lot over and blocking the view of Mt. LeConte. You have the support of the homeowners association to take care of the building maintenance, the grounds, the roof, etc. In a condo, you’re close to the action for shopping and other activities that make our area so popular. If you’re planning to use the property more for your own purposes than for rental income, a condo can fit that need with a lot less upkeep.
If keeping your costs low is important, then another thing that makes the choice to buy a condo is that insurance is cheaper than on a cabin. You’re basically insuring the contents of the condo unit, so the cost per square foot is about half when comparing apples to apples with a cabin.
And yes, condos can make money if you choose to rent yours out. While you won’t make as much with a condo as you might with a cabin, you can still generate income to help with the mortgage, put in that new flooring, or just have some extra spending money for your next visit to your home away from home. As a condo owner, you are competing with the hotels and timeshares around here. So you have to make sure you are offering a little more for your guests. A well set up, effectively marketed one bedroom condo can bring in about $25,000, and in some places we’ve seen units generate as much as $30,000. Due to the fact that your unit is the same as your neighbor’s, there is a ceiling on what you can earn, though. Changing out the flooring or making other updates won’t really add to the value if you decide to sell it. If your neighbor’s unit sold for $150,000 last week, then that’s about where you can expect your price will be this week, in general.
Why You Should Buy a Cabin
The best reason to buy a cabin instead of a condo can be summed up with two words: rental potential. Where condos have a ceiling on what
they can earn, cabins have a wider spread and are really only limited by their size, location, amenities, and what the views around them are. Some cabins have HOA fees, but just as many do not, or have a very low one for things like road maintenance. You can make improvements, add amenities, and update the décor to raise the value of the cabin.
Cabins in the Smokies also tend to attract a larger pool of customers, people who want the unique experience of sleeping in a cabin in the woods. For some, the cabin stay is the main part of their vacation. So you’re not competing with the hotels and timeshares.
You can also change and update your cabin the way you want and if you make the right changes, they will add value to the property. But you will have to take care of the maintenance yourself or pay someone if you’re in an area without an HOA that includes that. You’re responsible for making sure the cabin is stained and treated for bees on a regular basis.
Next, we created a test for you to see whether you should buy a condo or a cabin.
Rate your stance on each of these scenarios on a scale of 1 to 10.
- You see a bear from your window. How awesome is that? 1 = The opposite of awesome! 10 = Best day ever!
- Bees are swarming around the door to your home. 1= Call pest control! 10 = Let’s build a beehive!
- The roof is leaking. 1 = Time to call my real estate agent. 10 = Time to get my hammer and nails!
- You notice grass growing up along the sidewalk. 1 = Spray some weed killer right away. 10 = It’s just a couple blades of grass.
- You decide to change out the green carpet with hardwood. 1 = I don’t care if it adds value, I just want to change it. 10 = This had better make my property worth more!
If you scored above 40, you would probably prefer a cabin to a condo. You enjoy nature and you don’t mind taking care of the structure yourself (at least, not enough to dissuade you from living in a cabin).
If you scored lower than 25, you will probably want to buy a condo rather than a cabin. You need a property that is well maintained and you want to enjoy your space the way you like without worrying too much about making money on it.
If you scored between 25 and 40, you could go either way. The cabin you need is something in a resort that is maintained by the HOA or by a rental company. Maybe you want a cabin you can outfit in a way to make it worth more but want to be around people while you’re working, or perhaps you don’t want to see grass on the sidewalk but hope the bear will come up on the deck to say hello. Part of what makes the Smoky Mountains so great is that there’s something here for everybody! If you want to learn more about rental properties or need help to buy a condo or a cabin, we are here for you!
