The Great Smoky Mountains are one of the hottest tourist destinations in the United States. With an average of about 12 million visitors a year, more family friendly than most tourist destinations, it is the perfect place to invest in real estate.

Overnight rental cabins has almost replaced motels as the preferred lodging in the area. Whether people want seclusion, to be in the heart of all the activities, or somewhere in between, it's all available in overnight rental cabins. Whether it's a condo, small romantic log cabin for two, or luxurious cabins that will accommodate a few generations of the family. It's all available.

There are many positive aspects about owning mountain rental cabin verses beach rental cabin. Beach rental cabin is by far more seasonal than this area.

People visit the mountains in the summer for the beautiful lush forest surroundings, the sparkling clear, cool mountain streams to play in. Or to just be in a world that existed long ago for the natives by getting off the beaten path to enjoy some of the most spectacular natural scenery in the world.

They come to the mountains in the winter to enjoy all the great winter activities that can only be experienced in this mountain winter wonderland. There are still the opportunities to just relax somewhere quiet, so quiet that you can actually hear the snow fall around you at times. Or you have almost every winter activity that exists to take part in.

All year long there are hundreds of shops, restaurants, outstanding shows, or anything the tourist's heart desires. Gatlinburg and Pigeon Forge have been favorites of families for generations. They enjoy one of the highest return visitor rates in the nation.

The adverse conditions that plague coastal cabins in the past several years simply aren't a concern here. Rental cabin taxes in Sevier County are some of the lowest in the nation. Those are two factors that many investors are starting to be deeply concerned with in coastal areas.

If you are thinking about investing in an rental cabin, we have some very important information for you in the following. It is an honest, down to earth statement about what you can expect in case you're new to this type rental cabin. It is not meant to discourage you, quite the contrary. It is meant to help you realize there are positive as well as negative aspects in owning rental cabin. But the Positive far outweigh the negatives if you are aware of this information up front.

OWNING A OVERNIGHT RENTAL CABIN AS AN INCOME PRODUCING RENTAL CABIN

Investing in an overnight rental cabin can be very profitable and rewarding. Many overnight rental cabin owners are so pleased with their return that they have purchased additional cabins as investments.  There are many owners who own more than one cabin.  A well-located and managed rental cabin, equipped with the right amenities, can pay for itself with very little effort from its owner. 

Income, plus tax benefits and appreciation can make for a very good investment.  If you view your rental cabin as a second home you may have a problem with the nature of rental cabin. 

During the buying process, the realtor probably explained the great income potential, and the fact that you could enjoy the personal use of the cabin or chalet when you wanted to use it.  In general, they are correct.  The process is, however, a little more complex than that.  Actually, rental cabin investments may not be a good investment for everyone.  To ensure that you will have the whole picture before investing, you should be aware of the limitations and problems with owning an rental cabin of this type. Having a complete understanding of overnight rental cabin from all sides will more likely make your experience a positive one.

MAINTAINING THE CONDITION OF THE INVESTMENT: Taking a large overnight rental cabin that sleeps ten people as an example of the difference between a second home and an income producing rental cabin.  Over the course of a year, several hundred people will probably stay there. Some of them may be drunk. Some of them will be children with less adult supervision than you expect. Many of them will not be considerate people and they will not be considerate to your rental cabin. They may take your bedding or your pictures when they leave. Their kids may be messy in your house. The whole family or group might eat greasy foods and it gets on your furniture and not care that the it gets into the carpet.  

You really need to look on your rental cabin as an rental cabin rather than your second home. It's nearly  impossible to consider anything but the bottom line return on any rental cabin. 

CAN’T THE MANAGEMENT COMPANY SCREEN PEOPLE SO THAT ONLY THE BEST PEOPLE USE MY RENTAL CABIN?  Not very well.  They try by making sure all the guests are aware of the rules, and by observing them when they check in. But there are times when they can't judge people accurately at check in.

 CERTAINLY WE CAN EXPECT THE MANAGEMENT COMPANY TO CHARGE GUESTS FOR THINGS DAMAGED AND MISSING? Most rental management companies do charge the guests’ credit cards for damages when discovered.   They often find, after they have gone, that they are able to dispute the charges with their credit card company.  This renders the management company helpless and leaves the chalet owner stuck.  They have no trouble with the rental money since they collect it in advance of the stay.  But, they rarely know of any damage until after they have left. 

It is just not possible to go out and check every item in every cabin after every turnover.  At turnover, the housekeepers usually notice if a television or a picture is missing.   Given the number of cabins they clean each day and the fact that all cabins are different, they may not notice missing knick-knacks and small damages.  On a busy day rental companies may have as many as a hundred turnovers and only a five hour window to get them all cleaned.  This is quite a challenge in itself.  The good news is that most vacationing guests are decent, caring people and do not steal or damage things. 

OUR RENTAL CABIN WAS NOT AS CLEAN AS WE WOULD LIKE IT TO BE WHEN WE STAYED IN IT. It’s probably not as clean as the rental management company would like it to be either.  In a hotel it is much simpler to clean rooms without kitchens, hot-tubs, etc. and it is possible to inspect all of the units at every turnover.  Overnight rental units are spread out over the whole county, and it is simply not possible to inspect every time.  Companies would like to tell you that your rental cabin would always be ready for a white-glove inspection, but that would not be true. 

Rental management companies standards are high, and the maintenance and enforcement of these standards continues to be their goal. This is just as important to both the owner and the managing company for the end result of higher guest satisfaction.  Both you and the management company benefit from the exercise of high standards.

WHAT CAN I DO TO MAKE MY CABIN RENT MORE OFTEN? The best answer is for you to seek the help of your management company.  It is their job to inspect your cabin on a regular basis and make recommendations for ways to improve its performance.  The management company is in constant contact with the reservation personnel and are familiar with your rental cabin in relative position in their current inventory and the general market trends for your area.

Amenities, such as big screen TV, pool tables, and air hockey tables are a big plus and expand the market for your cabin or chalet.  You are competing with several thousand cabins in the Great Smoky Mountain area.  The more amenities your cabin has, the better its chances to stand out from the rest.  It will cost you money to keep your cabin up to par, but it will cost you more to ignore the recommendations of your rental management company.  It is important to realize that, from an income standpoint, you are partners.  The more income your rental cabin generates, the more you make and the more the management company makes.  It is in the management companies best interest, as well as yours, for your investment to be a strong producer.

HOW MANY NIGHTS WILL MY OVERNIGHT RENTAL BE BOOKED OR WHAT IS THE OCCUPANCY RATE? There are many factors that determine this. As mentioned above, amenities are so important to a overnight rental rental cabin. Locations are important, but with guest preferences being so widely diverse as to location of the rental unit, it isn't nearly as important as amenities you provide to make the unit desirable.

WHAT HAPPENS WHEN A REPAIR OR REPLACEMENT IS NEEDED IN MY rental cabin? There are a number of variables. The rental management company must get the rental cabin up and running as soon as possible if it's occupied, with the highest regard for the comfort and convenience of the guest.  Many light maintenance problems such as tripped breakers or broken blinds can be taken care of by the rental company.  The rental company is usually available for emergencies and can respond quickly, 24 hours a day if necessary. 

They cannot do this for free.  Making repairs to your rental cabin and furnishings is maintenance, not management.  They make money by the management and booking of your rental cabin.  They usually provide the light maintenance services, but they are probably not included in your management agreement.

Involved repairs, such as air conditioning, hot tubs, electrical, etc., will usually be contracted out to qualified, insured companies. If time permits, you are usually welcome to contract with anyone you choose. But remember, your rental management company probably knows the local folks who are good, dependable contractors they can depend on for excellent, accurate service.

 HOW DOES IT WORK AS FAR AS SPENDING LIMITS ARE CONCERNED WITHOUT MY APPROVAL? Your rental management agreement should stipulate a spending limit.  That means they can spend up to that amount on your behalf without your having to be notified.  On rare occasions, when a problem requires prompt action, and they are unable to make contact with you immediately, they will exceed this limit.  For example:  An air conditioner compressor breaks down in extremely hot weather.  The guest does not want to hear about waiting to get approvals.  They want it fixed now. The rental company will always try to save the booking without moving or losing the guests.  Moving the guests will not only cost you a booking, but will cost an extra housekeeping and hot tub service.  Everyone will lose if the rental management companies have to refund the guest’s money and send them away. And if there is a bad experience in your rental unit that isn't resolved quickly, you've lost an important repeat guest that prefers your cabin or condo.

HOW DO I KNOW THERE WAS ACTUALLY A PROBLEM? You more than likely won’t. If you don’t trust that the rental management company is acting honestly and in your best interests you should end the management agreement and change companies as soon as possible. All successful relationships, business or personal, require trust. You won’t have peace of mind without it.

THIS SHOULD GIVE YOU SOME HONEST INSIGHT TO OVERNIGHT RENTAL rental cabin. The reality is that hundreds of investors have been very successful, happy owners. Well pleased with the return on their money invested. If you choose the right rental management company for your overnight rental rental cabin, your investment will provide you an excellent return on your money.