Reasons for Great Smoky Mountain Rental Performance

Why Owning Investment Property in the Great Smoky Mountains is so Affordable!

There are a number of state and local government factors that contribute to how well cabins perform as rentals.  These are just wonderful for Tennesseans!  But they are also fantastic for our friends and family outside of our state that come to invest the time, money, and love! 

Often our best investors start out as just an inquisitive tourist enjoying the slower pace, the pristine nature of the National Forest, the fun of Dollywood, Gatlinburg’s Anakeesta, and the Ripley Aquarium to name a few of the region’s many popular attractions. But then they end up buying a second home that then becomes a financial blessing to generations to come – in additional income, in tax breaks, and in a place to vacation “free.” Then finally when it is sold the renter guests have paid off the mortgage. Between that and the property appreciation, wow!  All of this conspires to become a big part of our clients’ financial strength for them and their families.

So how do the different factors work together to make this possible? Let’s explore the major ones:

1.

Our property taxes are exceptionally low. Compare a beach destination to a Smoky Mountain destination and you will be shocked at the difference.  Many of you come from states where your own home property tax is 5 to 10 times more than what your second Tennessee home would be.  Note our sales tax is high, which means the tourists are helping pay for the roads and infrastructure. Should you decide to move to your second home, there’s more good news: Tennessee doesn’t have state income tax. 

2.

Our insurance is very affordable, because unlike beach destinations we don’t have hurricanes and flooding. Our properties are built for rugged rental use with few “claim incidents”. An average 2-bedroom cabin is $150 a month for homeowner insurance.

3.

Our HOA fees are low. Resorts are our bread and butter, so we are simple and straightforward. HOAs in most of our tourist-focused communities are not loading a resort with amenities that drive up prices, like golf courses, elaborate pools, elaborate club houses, or onsite management. Nature cooperates by being beautiful all on its own so expensive landscaping, irrigating, fertilizing and mowing is not necessary.

4.

Utilities costs are low, due to TVA creating hydropower from our dam-controlled lakes. Our seasons are fairly mild with cold temperatures that only last a few days.  We have little ice or snow. Just enough to be fun and earn our residents a couple of days out of school! But not expensive.  We use “heat pumps” instead of electric and gas heat due to the milder climate. We also have high mountain breezes cooling our cabins in the summer and many rain showers, pressure washing and also making our climate more temperate and mild. All of this is good for utility bills.  Many cabins also have well water, which costs less than $10 a month for the electricity.

Coupled with all these other positives, we also have very little red tape in the process of building and maintaining our overnight rental properties. We are a very conservative area, favoring the entrepreneurial spirit and a belief in individual freedom to own property unencumbered by large, local government.

This philosophy has created a thriving tourism market for our guests, and an investment opportunity for those who want to share some ownership in our community! 

These are some of the “hidden reasons” our area performs year after year in the top tier of the nation for short term rentals!

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