All Forum Posts by: Collin Hays

So we have a new property on our program.  A very nice, two bedroom property just outside of Gatlinburg.  We projected that it would easily do $40K a year and were planning for that. But the owners jumped in and made a few decisions that would kill the thing.

Number one, they wouldn't let us name the cabin.  They wanted to do it because it was "their cabin" and they wanted their personal touch on it.  Now, we have several examples since 2011 where the name of the cabin makes a huge difference in annual revenue.  I am not going to reveal the name of the cabin in this situation, but suffice to say that it wasn't appropriate for the area and quite silly.  

Next, they decided they wouldn't allow children. Children would translate into more repairs and maintenance.  Wow.  You just made a $20K a year decision there.  Good job.

Next, they decided to go without either a hot tub or a game table.  Now I don't have either of these in my personal home, but when I am surfing homes to stay in in the Smokies and practically every home has these amenities, yours sticks out like a soar thumb.  Sure, we can discount it to overcome these deficiencies, but at what ultimate price?  

We manage 29 properties, and this weekend, 28 of them are booked, except for this one. We project it might rent 3 nights in March.

Some people are too smart for their own good.

Our properties in the Smokies are as busy as ever.  I’m shocked by that, but my working theory is that folks still want to vacation, but they would prefer to drive there than fly or cruise, and they’d like to stay in a secluded private residence.

I know this has been beat to death, but the Smoky Mountains region represents the best yield I have been able to find.  I live 1,100 miles away.  

That said, there will be a point when the prices in the Smokies reach a level where the price-to-earnings isn’t as attractive. They’ve gone up substantially.

Perhaps Lucas Carl could jump in and give an opinion of where we are in that cycle.

 I've built a lot of houses. I've never quite seen anything like the dishonesty and lack of work ethic in eastern TN. Punctuality and completing a good job on time are completely foreign concepts.  If you want to build in Gatlinburg, you'd better go out and do lots of hand shaking, get to know some locals, and settle in for a long project.  It will take triple what it should.

I will second this.  We had a cabin in Gatlinburg burn to the ground in the fires several years ago, and were completely ripped off by not one, but TWO general contractors in trying to get it rebuilt. I ended up moving to Gatlinburg for almost a month myself.  I hired a crew and we went 12 hour days 6 days a week to get it done. I was going broke getting ripped off and I had to take action.  I would say I lost a solid $100K in being ripped off. And what should have taken 6 months took 18.  The folks at the city inspector's office also tend to use out-of-state 'ers as their whipping boy on all of their regulations. They'll flunk you on all sorts of silly things and simultaneously turn a blind eye to significant infractions at your next door neighbor's house because he's a local and in tight with the committee.  Lots of "who you know" in the Gatlinburg area. 

One problem is, there is a gross undersupply of contractors there right now, which means you are ripe for the pickings. There are many hundreds of unscrupulous "contractors" over there that will rob you blind.

You are far better off just self-insuring on this and funding your own "trip insurance" account. The truth is, these policies practically never pay.  The conditions and restrictions are extensive.  Why give all of the money to an insurance company when you can just self-insure and offer the same policy?  It's not like you have any major downside risk - a few nights of rental income is all. 

 How are they superior?  Lower fees?  More bookings?  Both?  I’m interested in hearing more.

Nightmare guests are almost non-existent to me, going back to 2005. I would pick Airbnb or HomeAway - stick with one for your own sanity.

Of course you can download from VRBO what they paid you.  But it's up to you to figure out what they charged you in CC fees.  They don't really want you to know.

I don't see a scenario where the mortality rate in the U.S. is anywhere close to 1 percent, much less 2 percent.  Maybe two or three tenths of one percent.  Realize that that 2% percentage is in mainland China. China ain't exactly the U.S. in terms of healthcare.  Let's look at hip replacement surgery:  In the U.S., the mortality rate within 30 days of surgery is .3 percent.  That's less than one third of 1 percent.  One in 330.   In China, the mortality rate within 30 days of surgery is 2.6%.  One in 35.

Apples and oranges.

However, facts often have no influence on emotion, and right now the reactions in the media, the markets, and around the world are based purely on emotion.