The paperwork is signed, the money has changed hands, and you are now the proud and excited owner of a Smoky Mountain cabin. Now is the time to decide what you will use the cabin for. There is more than one thing you can do with the cabin. You can use it as your second home or a family vacation spot. You can rent it out long term. You can also use it as a vacation rental.
Is this cabin slated to be a place for you to retire? If so, renting the cabin out until that time comes can be an option you may want to consider. If you and your family aren’t planning on visiting the cabin or using it as a vacation destination, a long term rental might be suitable but if you’d like to use your cabin as a vacation spot, a vacation rental program could be right for you.
Once you’ve decided to use the cabin as a vacation rental, the next order of business is to determine whether you’ll be renting and promoting the cabin yourself of will you be signing up with a property management company who will handle all of that for you. There are pros and cons with both of them.
Renting the cabin out yourself can be a major undertaking, especially if you are living hundreds of miles away. Some things you’ll need to consider are how are you going to advertise the cabin and how are you going to handle reservations. Who will you hire to clean the cabin and put it back in order after each guest stays? Who will you hire to do the upkeep such as lawn maintenance, scheduling trash pickup, scheduling exterminators when needed, scheduling building and appliance maintenance issues, etc? And the list goes on. There’s a lot to think about when trying to rent the cabin out on your own and though you may find one person who will be responsible for all maintenance and upkeep, you will still be the one who handles the income and outgoing expenses, not to mention all of the record keeping required for tax purposes and even consumer complaints.
A few benefits of handling your rental yourself are you have full control, you schedule your own time in the cabin and you don’t give a percentage of the income the cabin generates to someone else. You will, however, pay certain fees to some websites where you advertise though, so keep that in mind. Some may even require a small percentage of booking fees.
You will also need to decide how you will handle damages done by guests to your property or contents, and refunds to guests who may have legitimate reasons to ask for a refund. You’ll also have to fend off requests for refunds from disgruntled guests who just don’t deserve one.
Does it sound like a confusing, daunting task trying to handle all of this yourself?
There is the other option of signing on with a property management company.
If the cabin you purchased was already on a rental program with a property management company, you may have the option of keeping the cabin with that company. If it wasn’t, call a few property management companies and ask them to come and look at your cabin to determine the income potential from rentals.
When deciding on a property management company, there are many things to consider. All property managements companies will require you to sign a contract. In the contract there will be provisions about what percentage of rental fees go to the management company and what percentage will go to the owner. There are also the cleaning fees for cleaning of the cabin after guest stays and the contract will state who pays for that. Most times it’s an added fee that the guest will pay. Who will pay for the linens and towels? Will it be your expense or the management company’s? What is the agreement when it comes to appliance breakdowns? Is there a limit the property management company is allowed to bill you for repairs before they contact you? What is the limit? Will you get a monthly or quarterly statement? Who pays the fees for credit cards? Does it come out of your percentage or theirs? Is there a basic monthly fee you’ll be responsible for just for lawn maintenance, etc.? What sort of insurance policy are you required to keep on the property for liability, etc.? A lot of management companies will require a one million dollar liability policy be kept on the cabin. There are many insurance companies that will help you with this sort of policy especially for rentals. There are many, many things to consider. Look over the contract and be sure to understand everything.
Signing with a property management company like Pioneer Rental Management can take a lot of the weight of owning a vacation rental cabin off your shoulders and there will be a lot less frustration on your part when it comes to handling bookings, maintenance, complaints and the like. You’ll need to discuss with the property management company a few things. When you sign with them how many weeks a year can you block out for yourself? Can you block out weeks for friends and family? Can you only block weeks for immediate family? Will the property management company be giving away free stays for promotional purposes? How many? A cabin owner needs to keep in mind when blocking out days or weeks for themselves of for friends or family, those time periods will not be income earning.
If you do block out weeks or days, it’s a good idea to stay away from peak seasons and holidays since those time periods can garner a higher rental rate and will potentially book faster. In the Smoky Mountains near the Gatlinburg/Pigeon Forge area, also areas near the Great Smoky Mountain National Park, peak seasons are the summer months and the month of October. In the fall, the Great Smoky Mountains National Park is the perfect destination for viewing the changing fall foliage and cabin rentals are usually booked solid with rates adjusted slightly higher, as with holidays such as Thanksgiving and Christmas and New Year’s. These times are not only financially beneficial to your property management team; they are also beneficial to you for generating income.
Another thing you need to remember is that even though you own the cabin, after your stay you will more than likely be required to pay the normal going rate for the cleaning fee. The cabin still has to be cleaned after your stay to be ready for the next guest. You will also need to be aware that even you, the cabin owner, will need to honor the normal ‘check out’ time. There might be another guest coming in to stay the same day you are departing.
Which brings up the question of will your property management company supply you with a way to check their booking calendar so you can not only see what days are open for your private use of the cabin but also be able to keep track of bookings for the cabin so that you can gain insight into what times of the year show more traffic and are more profitable or what times of the year are pretty much vacancies.
And what happens in the slow season? The months of January, February, and March can be very slow in terms of bookings, especially if you have a larger cabin. Most bookings may come from short weekend getaways instead of week-long stays and even then, your cabin may go unoccupied for a month or two. So, how does your property management company handle the slow season? That would be a good question to ask. Do they run specials or discounts to help attract guests?
And what happens when you don’t have any paying guests for one pay period, whether it be a month or a quarter? You will need to pay the regular upkeep fee that you have agreed upon in your contract, the only difference being the fee won’t be subtracted from your earnings because you had no bookings. You will have to pay the fee yourself but remember, it’s better to have your cabin looked after even when there are no bookings and the fee is well worth the peace of mind, not to mention expense of broken water pipes or a tree branch damaging the roof while no one is around. Your property management company will keep tabs on your cabin, even when no guests are staying there.
All in all, having a rental property management team can lead you to much success with your cabin rental.