Cabin expansion: Can you guys give me your thoughts?
Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votesCabin expansion: Can you guys give me your thoughts?
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes20' x 20' would be 400 SF..... @ $250 SF, you're at $100k. How much more could you get per night, maybe $50-$100...? 200 nights per year is $20k, so a 5 year payback (looked at simply of course).
Then also, would it add to your family's personal enjoyment? That does come into play as well.
Personally, given your current financials, I'd just leave it as is. Simpler is usually better....(If it works, don't fix it :-)
Just my $0.02
19 Replies
- 2yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Will this require the septic tank to be replaced with a larger one to meet code?
I would want a payback that is quicker than 10 years.
I can buy a LTR property that has 3 to 5 year payback, so these are better investments for me.
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes2y
Quote from @John Underwood:
Will this require the septic tank to be replaced with a larger one to meet code?
I would want a payback that is quicker than 10 years.
I can buy a LTR property that has 3 to 5 year payback, so these are better investments for me.
Not sure on the septic, and may have to modify the septic field. Open question on that one.
- 2yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
20' x 20' would be 400 SF..... @ $250 SF, you're at $100k. How much more could you get per night, maybe $50-$100...? 200 nights per year is $20k, so a 5 year payback (looked at simply of course).
Then also, would it add to your family's personal enjoyment? That does come into play as well.
Personally, given your current financials, I'd just leave it as is. Simpler is usually better....(If it works, don't fix it :-)
Just my $0.02
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes2y
Quote from @Bruce Woodruff:
20' x 20' would be 400 SF..... @ $250 SF, you're at $100k. How much more could you get per night, maybe $50-$100...? 200 nights per year is $20k, so a 5 year payback (looked at simply of course).
Then also, would it add to your family's personal enjoyment? That does come into play as well.
Personally, given your current financials, I'd just leave it as is. Simpler is usually better....(If it works, don't fix it :-)
Just my $0.02
Bruce, thank you. Is $250 psf around what you would expect to pay? It would be 20X26.
- 2yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Somewhere around that figure would be accurate. I don't really know what it would go for in your area, but that'll get you in the ballpark for sure. Good luck if you decide to do it, you probably can't go wrong either way as long as you can afford it!
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes2y
I wouldn't do it unless it had a 5 year or less return. Right now around here (I live here in your market) if you are talking basic turnkey - nothing specialized - you're going to be right around $200/sf finished, not including permits or ancillaries (IE you need a bigger septic system, you have to do major grading work for the addition, etc). Prices have jumped up pretty significantly the last few years; I had an addition done in 2021 just when lumber was starting to go berserk and I spent $100/sf *BUT* I use a lot of these contractors in my rental business and it wasn't a turnkey job - I did the electric, insulation, HVAC extensions, painting and trimwork. If those were added in it would have been about $150/sf and that was for a site ready addition without plumbing.
With standard ceilings, and single-story I would expect to spend about $100k for basic turnkey on that addition with a hungry builder.
Skyline Properties - 2yAndrew SteffensBusiness MemberTampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
Im certainly not an expert in the Smokies other than a semi frequent guest - but if you have the cash I would think anything north of 10% is a good way to go. Just make sure you account for everything as I see people mentioning septic and grading etc (things I am no used to and would probably forget). Sounds like a cool project and I wish you the best of luck!!
Vacation Rentals of Florida53 Reviews - Rental Property Investor · North Fork, NY · Member since 2016 · 1k+ posts · 631 votes2y
You have great feedback. But what jumped out to me was the immeasurable in terms of dollars:
“But our family has grown!”
I would do it for that reason alone, since your numbers makes sense without that added value.
- 2yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
Hey @Collin Hays. Another thing you should calculate is the after build value. How much will it add to the homes value in the long run.
You might have 10 years to recoup the overall investment simply as a STR but might net quite a bit more in the long run in equity.
Alone it might not be worth the squeeze to get that juice, but adding in the equity, you could come out far ahead.
Also, If you added slightly more space, could you add the master and another bedroom/bath? 400sqft is a pretty big master/master bath.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes2y
Easy math. Invest $150,000 and arn $15,000 = 10% return. That's worth it.
The DIY Landlord Book4.7247 Reviews - Austin, TX · Member since 2013 · 153 posts · 104 votes2y
One cost to consider is downtime. I've built two cabins in the smokies and they both took about 18 months from start to finish. There's no reason why it should take that long but everything there seems to move on mountain time. I would not be surprised if an expansion like this was estimated at 5 - 7 months and for it to actually take 8 - 10 months.
Would you host guests while construction was going on? If you do, you risk getting bad reviews even if you warn people. If you don't, you lose out on a lot of income and there's a risk that Vrbo and Airbnb might drop you in their algorithms.
When I built my cabins, I placed them on the right hand side of the lot so that I would have room to build a small pool house someday (about the size of a two car garage). I know the added revenue would more than pay for the cost in the long term. But the idea of taking my cabins offline for that long is painful. - Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes2y
Quote from @Nathan W.:
One cost to consider is downtime. I've built two cabins in the smokies and they both took about 18 months from start to finish. There's no reason why it should take that long but everything there seems to move on mountain time. I would not be surprised if an expansion like this was estimated at 5 - 7 months and for it to actually take 8 - 10 months.
Would you host guests while construction was going on? If you do, you risk getting bad reviews even if you warn people. If you don't, you lose out on a lot of income and there's a risk that Vrbo and Airbnb might drop you in their algorithms.
When I built my cabins, I placed them on the right hand side of the lot so that I would have room to build a small pool house someday (about the size of a two car garage). I know the added revenue would more than pay for the cost in the long term. But the idea of taking my cabins offline for that long is painful.I'd have to take it off market. Probably November through March. If it can't get done in 4 months, I'm out.
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes2y
Quote from @Nathan W.:
There's no reason why a good builder can't get it done in 4 months. I've been amazed though at how many delays I've run into with contractors in that area.
I am talking to a higher-end builder who lives literally 300 yards from my cabin. I ordinarily doesn't do smaller jobs, but he said "Right now I would...there's no new construction right now."
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes2y
Quote from @Nathan W.:
One cost to consider is downtime. I've built two cabins in the smokies and they both took about 18 months from start to finish. There's no reason why it should take that long but everything there seems to move on mountain time. I would not be surprised if an expansion like this was estimated at 5 - 7 months and for it to actually take 8 - 10 months.
Would you host guests while construction was going on? If you do, you risk getting bad reviews even if you warn people. If you don't, you lose out on a lot of income and there's a risk that Vrbo and Airbnb might drop you in their algorithms.
When I built my cabins, I placed them on the right hand side of the lot so that I would have room to build a small pool house someday (about the size of a two car garage). I know the added revenue would more than pay for the cost in the long term. But the idea of taking my cabins offline for that long is painful.You've got it exactly right. Mountain time is like Island time is like Italian time. No one is in a hurry to do anything around here, keeping employees in this field is a joke, and it just flows downhill like that through subs, suppliers, inspectors and the like. The only real exception to that is contractors that have all their own subs, and the corporate homebuilders that bring in their own crews to do entire subdivisions. Everything else takes twice as long as it should take anywhere else. 20 years ago I had a developer in my office that had just relocated up here from Florida and was complaining about how long everything takes, how slow subs were, and how impossible it was to keep anyone on payroll. I told him he might as well accept it as it is or go back to Florida as that's just the culture.
Skyline Properties - 2yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @Collin Hays:
Quote from @Nathan W.:
One cost to consider is downtime. I've built two cabins in the smokies and they both took about 18 months from start to finish. There's no reason why it should take that long but everything there seems to move on mountain time. I would not be surprised if an expansion like this was estimated at 5 - 7 months and for it to actually take 8 - 10 months.
Would you host guests while construction was going on? If you do, you risk getting bad reviews even if you warn people. If you don't, you lose out on a lot of income and there's a risk that Vrbo and Airbnb might drop you in their algorithms.
When I built my cabins, I placed them on the right hand side of the lot so that I would have room to build a small pool house someday (about the size of a two car garage). I know the added revenue would more than pay for the cost in the long term. But the idea of taking my cabins offline for that long is painful.I'd have to take it off market. Probably November through March. If it can't get done in 4 months, I'm out.
I just don't see any way you're going to get that done in 4 months, particularly in today's world. And even more so after I'm hearing about the work culture, or lack thereof, in the area...
- Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes2y
I've been doing land and cabins and I partnered with ex brother in law to get our gc license last year. Built 10 cabins last year with other builders and ourself. This year we're looking to do 10 to 12 ourself.
Here is what I would say. One. 55k in rent per year for a 2,500 sq ft cabin seems awfully low. Especially given you've got a trout stream on the property and its on 2 acres in gatlinburg. Is that a 3 bedroom cabin? Are you using it a ton yourself and thats why rents are so low? I'm assuming you have a hot tub and game room (pool table, large screen tvs, arcade games). If not, maybe try that first.
The other thing I would suggest is possibly looking at an enclosed pool house. A year round pool is going to add way more money than an extra bedroom given you already have a large cabin. If you've got two acres, you should be able to make that work.
In terms of the build time though, people are definitely right on the gc's. They just don't seem to have any sense of urgency out there. They'll finish the block and then it'll take a month before they start framing - for no reason at all.
I had one builder doing three builds for me. Two of the builds he had the t&G done and flooring going in around August of last year. He didn't finish the cabins until february. It was absurd.
I will say this though. As GC's, now that we're doing our own builds, the biggest bottleneck we see is not the building phase as much as it is the permit phase. The permitting phase is worse than just about any area outside a major city. Its not even the depts that are the problem. Its the septic permits and surveyors that are just huge bottlenecks.
We've got a batch of 7 lots we're trying to push over the goal line for building permits and we've got another 12 we have in the works. But its just a nightmare. Just to have a surveyor add a driveway and its spot shots to a site plan is taking over 3 weeks. The well guys are running 3 to 5 months out lately too.
Its a puzzle game no doubt. But then again we bought one lot in gatlinburg that already had the permit in place and we should be finishing it up around the middle of next month. Its a 3/3, 2,550 sq ft cabin. So it can be done if you really have tight subs and can push them to start each phase as soon as the previous one ends.
There are some other tricks we've learned to improve quality and turnaround as well - prefinished siding and tongue and groove. Saves about a month or so. We now do our own site prep and plumbing as well which were some of our bottlenecks before.
In terms of adding 400 square feet and how that might affect occupancy, you should be able to get that done easily in four months. Again, that assumes that you're not counting the permit phase and it assumes that you won't need a new septic.
You should be able to prep and pour the footers on the days you have occupancies. Then shut it down to frame it up, put your roof on and close it up in a couple of weeks. A couple weeks to get your subs in there real quick for electric and hvac (split system I'm assuming), and plumbing for the bathoorm. A week for the inspections. Insulate and inspect that in a week. And then t&G (use the prefinished stuff so you don't have to deal with spray) and flooring. Then final trim and inspect. I think three months should get it if your gc can line his guys up even a little.
Again, the problem I've seen is that these gc's just don't seem to really care if the cabin is sitting weeks or even months at a time between phases - and for no apparent reason either.
One thing I would add. Be sure to get a fixed priced contract from the gc. Most of these guys out there want to do "cost plus" contracts so that you're responsible for all the labor and material costs and they just tack on their 18 to 20% on top. They'll then give you a "rough" estimate but tell you its just an estimate and that the contract is solely cost plus and then they've got you. - Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes2y
Quote from @Mike H.:
I've been doing land and cabins and I partnered with ex brother in law to get our gc license last year. Built 10 cabins last year with other builders and ourself. This year we're looking to do 10 to 12 ourself.
Here is what I would say. One. 55k in rent per year for a 2,500 sq ft cabin seems awfully low. Especially given you've got a trout stream on the property and its on 2 acres in gatlinburg. Is that a 3 bedroom cabin? Are you using it a ton yourself and thats why rents are so low? I'm assuming you have a hot tub and game room (pool table, large screen tvs, arcade games). If not, maybe try that first.
The other thing I would suggest is possibly looking at an enclosed pool house. A year round pool is going to add way more money than an extra bedroom given you already have a large cabin. If you've got two acres, you should be able to make that work.
In terms of the build time though, people are definitely right on the gc's. They just don't seem to have any sense of urgency out there. They'll finish the block and then it'll take a month before they start framing - for no reason at all.
I had one builder doing three builds for me. Two of the builds he had the t&G done and flooring going in around August of last year. He didn't finish the cabins until february. It was absurd.
I will say this though. As GC's, now that we're doing our own builds, the biggest bottleneck we see is not the building phase as much as it is the permit phase. The permitting phase is worse than just about any area outside a major city. Its not even the depts that are the problem. Its the septic permits and surveyors that are just huge bottlenecks.
We've got a batch of 7 lots we're trying to push over the goal line for building permits and we've got another 12 we have in the works. But its just a nightmare. Just to have a surveyor add a driveway and its spot shots to a site plan is taking over 3 weeks. The well guys are running 3 to 5 months out lately too.
Its a puzzle game no doubt. But then again we bought one lot in gatlinburg that already had the permit in place and we should be finishing it up around the middle of next month. Its a 3/3, 2,550 sq ft cabin. So it can be done if you really have tight subs and can push them to start each phase as soon as the previous one ends.
There are some other tricks we've learned to improve quality and turnaround as well - prefinished siding and tongue and groove. Saves about a month or so. We now do our own site prep and plumbing as well which were some of our bottlenecks before.
In terms of adding 400 square feet and how that might affect occupancy, you should be able to get that done easily in four months. Again, that assumes that you're not counting the permit phase and it assumes that you won't need a new septic.
You should be able to prep and pour the footers on the days you have occupancies. Then shut it down to frame it up, put your roof on and close it up in a couple of weeks. A couple weeks to get your subs in there real quick for electric and hvac (split system I'm assuming), and plumbing for the bathoorm. A week for the inspections. Insulate and inspect that in a week. And then t&G (use the prefinished stuff so you don't have to deal with spray) and flooring. Then final trim and inspect. I think three months should get it if your gc can line his guys up even a little.
Again, the problem I've seen is that these gc's just don't seem to really care if the cabin is sitting weeks or even months at a time between phases - and for no apparent reason either.
One thing I would add. Be sure to get a fixed priced contract from the gc. Most of these guys out there want to do "cost plus" contracts so that you're responsible for all the labor and material costs and they just tack on their 18 to 20% on top. They'll then give you a "rough" estimate but tell you its just an estimate and that the contract is solely cost plus and then they've got you.Our cabin is about 20 miles from Gatlinburg, so it doesn't fetch in rent what Gatlinburg cabins do. I also lend it out to friends and family quite a bit. Really good point on the "cost plus" deal. It sure makes sense - the builder has no skin in the game in controlling costs whatsoever. I've never really considered that but makes perfect sense.
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