Absolutely you should! The good news is that Gatlinburg, Sevierville and Pigeon Forge are in the top five places of the nation to invest your real estate money, month after month! With all the unsettling financial news, interest rates rising and the powers that be just doing their best to head us straight into a recession you need to be sharp but not paralyzed. No doubt we have a crazy real estate climate right now nationwide, but one thing has not changed: 13 million visitors to the Great Smoky National Park! When times get tough, people travel to the Smokies. They cancel overseas flights, they don’t choose cruises, they choose to drive to their mountain getaway for some down time. They need the slow pace, the old streams and huge trees to remind themselves that life is still good. The fact that we are within one day’s driving distance of 70% of the population of the US also makes the numbers work in your favor.
The last difficult financial climate we faced as a nation brought overall property values down. However, our rental revenue never dropped off. This is our expectation for this next season we are facing. Be prepared to hold property and rent it. Right now is not the time to flip property unless you are able to improve it significantly. If you are, then go for it! However, most of us need to create value in our investment by small upgrades and let our renters enjoy and pay for it for us!
So, invest wisely, but invest. Make sure the property you put under contract meets the five following criteria. Use these steps to guide you, and make sure you can check off each one affirmatively:
1). It’s in a good location, within 20-25 minutes easy drive of attractions such as the shopping strips of Pigeon Forge and Gatlinburg, the National Park, dining, shopping, and Dollywood! Rental properties that are too far away don’t perform as well. You might find something that will pay for itself further out, but typically not a cabin that will make money like the ones within that radius.
2). It’s got good bones! Look for a cabin with an open floor plan, walls of glass, and has enough square feet for game room, theatre amenity. A cabin that has a private bath for each bedroom will rent for more, so that is something you will want to have. The exception is unless the bathroom is attached to a bunk room – kids can share! Also, make sure the bedrooms are large enough for King Beds.
3). It photographs well! Some cabins are just photogenic, and that matters! You are going to rent by the photographs. Some really nice cabins just don’t capture well in photography, so be savvy and aware of that in your search!
4). It is built well! Do an inspection and pay attention to large items of concern. Does the water drain away from the foundation? Are trees hanging over the roof and prematurely aging it? There will be small items, so be prepared to hire a handyman to correct if you are not able to negotiate those repairs. Don’t lose a great cabin over $1,2000 worth of handyman refreshing. There could be simple items like doors and cabinets that need to be adjusted due to not closing well, GFI outlets that need to be replaced because they’re not tripping correctly, decks or rails that need touch up stain, or the landscaping that is sad and in need of improvement. These are all items you should be prepared to correct in the first week you own it. But be prepared to walk away from a poorly built cabin that has a foundation issue the sellers will not correct.
5). You can do a small amount to make it special! Don’t spend your last dollar on the purchase! You need to refresh the property, so you’ll want to keep a little back in order to push the cabin just a bit more into “extremely special”. Buy an extra game or two, upgrade the electronics, and remember that anything tired needs to go (bedspreads, pillows, throws, etc.).
Follow these steps and you will be on the right path to making money with your investment cabin property. If you’re planning to hire a rental company to manage it, get in touch with them before the purchase is finalized so they can be helping you get it ready to rent on day one. If you need help finding a cabin, contact me. My team and I will be glad to help you with your search for your perfect investment!
