Gatlinburg Investment Cabins

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MARANATHA CABINS OF PRESTIGE, LLC.

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MARANATHA INVESTMENTS BUILDS ONLY THE MOST SPECTACULAR INVESTMENT CABINS IN THE GREAT SMOKY MOUNTAINS AND OTHER TOP TOURIST DESTINATIONS AROUND THE UNITED STATES.

IF YOU ARE LOOKING FOR AN INVESTMENT CABIN THAT IS SURE TO HAVE THE EDGE IN THE GATLINBURG, PIGEON FORGE AREA, MARANATHA INVESTMENTS IS THE COMPANY TO RELY ON TO PROVIDE THAT EDGE.

CABINS THAT ARE NOT ONLY SPACIOUS WONDERS IN CONSTRUCTION, BUT ARE BUILT TURN KEY, READY TO RENT WITH ALL THE NORMAL AMENITIES SUCH AS GAME ROOMS, HOT TUBS, JACUZZI'S, AND LARGE SCREEN TV'S. WE ALSO OFFER CABINS WITH FULL SIZED SWIMMING POOLS, EXERCISE ROOMS, AND LARGE SCREEN HOME THEATER ROOMS WITH FULL SURROUND SOUND SYSTEMS THAT MAKE YOUR RENTAL GUESTS A PART OF THE MOVIE EXPERIENCE.

MARANATHA CABINS OF PRESTIGE, LLC.

THE EXCLUSIVE RENTAL MANAGEMENT COMPANY FOR MARANATHA INVESTMENTS BUILT PROPERTIES.

ONCE YOU OWN ONE OF OUR LUXURY CABINS YOU CAN REST ASSURED THAT OUR RENTAL MANAGEMENT COMPANY WILL PROVIDE YOU PROFESSIONAL, HONEST, AND DEPENDABLE SERVICE IN EVERY ASPECT. AS AN ABSENTEE OWNER YOU NEED A COMPANY THAT YOU ARE ENTIRELY COMFORTABLE WITH IN THE MANAGEMENT OF YOUR INVESTMENT.

WE INVITE YOUR QUESTIONS ON EITHER ASPECT OF OUR BUSINESS. WHETHER PURCHASING AN INVESTMENT PROPERTY OR THE MANAGEMENT OF A MARANATHA BUILT PROPERTY.

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

MAINTAINING THE CONDITION OF THE INVESTMENT: Taking a large overnight rental property that sleeps ten people as an example of the difference between a second home and an income producing investment property.  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 property. 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 investment property rather than your second home. It's nearly  impossible to consider anything but the bottom line return on any investment property. 

CAN’T THE MANAGEMENT COMPANY SCREEN PEOPLE SO THAT ONLY THE BEST PEOPLE USE MY PROPERTY?  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 PROPERTY 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 investment property 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 investment property 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 investment property 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 property. 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 INVESTMENT PROPERTY? There are a number of variables. The rental management company must get the property 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 property and furnishings is maintenance, not management.  They make money by the management and booking of your property.  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 INVESTMENT PROPERTY. 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 property, your investment will provide you an excellent return on your money.

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The following was written by Jay Holeman. After years of experience in the overnight rental business both as a cabin owner and then in a top rental management position, he is well qualified to offer the advice below based on experiences on both sides of the fence:

THE PROS AND CONS OF OWNING A VACATION RENTAL CHALET AS AN INVESTMENT

MAINTAINING THE CONDITION OF THE INVESTMENT

 For example, let’s take a four-bedroom property that sleeps ten people.  Over the course of a year, more than 600 people will stay there. Several hundred of them will be drunk. Several hundred of them will be children with various degrees of adult supervision. Many of them will not be nice people and they will not be nice to your property. They may take your bedding or your pictures. Their kids may track mud into your house. The whole family or frat house my eat greasy chicken on your furniture and not care that the French fries get ground into the carpet.  

We could go on, but I think you get the picture…you need to look on your “cabin in the woods” as an investment property rather than your pristine second home. 

CAN’T THE MANAGEMENT COMPANY SCREEN THESE PEOPLE SO THAT ONLY NICE PEOPLE USE MY CHALET?

 Not very well.  We try, by making sure all the guests are aware of the rules, and by looking them over when they check in.

 CERTAINLY WE CAN EXPECT THE MANAGEMENT COMPANY TO CHARGE GUESTS FOR THINGS DAMAGED AND MISSING

Yes and no.  We do charge the guests’ credit cards for damages when discovered.   We 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.  We have no trouble with the rental money since we collect it in advance of their stay.  But, we seldom know of any damage they have done until after they have left. 

It is just not possible to field a corps of inspectors 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 we 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.  We do have a good oversight program, which you will read about later in this handbook.  These “Owner Representatives” inspect on a regular basis to ascertain the condition of the cabins and the effectiveness of the cleaning staff.  When they do find damage, it is often too late to know whom to charge.   Is this a perfect system?  No, but we are constantly working toward improving it.

THE CHALET WAS NOT AS CLEAN AS WE WOULD LIKE IT TO BE

Well, it’s probably not as clean as we would like it to be either.  In a hotel environment, 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.  Our units are spread out over the whole county, and it is simply not possible to inspect every time.  We would like to tell you that your investment property would always be ready for a white-glove inspection, but that would not be true.  We pay our housekeepers more than other providers and our staff turnover is quite low. 

Our standards are high, and the maintenance and enforcement of these standards continues to be our goal.

WHAT CAN I DO TO MAKE MY CABIN RENT MORE OFTEN? 

The best answer is for you to seek the help of an Owner Representative.  It is their job to inspect your cabin on a regular basis and make recommendations for ways to improve its performance.  The Owner Representatives are in constant contact with the reservation personnel and are familiar with your “investment’s” relative position in our 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 Smokey Mountain market.  The more bells and whistles your cabin has, the better its chances to stand out from the rest.  It will cost you money to keep your cabin up-to-snuff, but it will cost you more to ignore the recommendations of your owner representative.  It is important to realize that, from an income standpoint, we are partners.  The more income your investment property generates, the more you make and the more the management company makes.  It is in our best interest, as well as yours, for your investment to be a strong producer.

 WHEN A PROSPECTIVE GUEST MAKES A RESERVATION, WHO DECIDES WHICH CABIN GETS RENTED?

 If the guest found us on the Internet, they will probably have made some decisions before they ever call.  Many times they have even picked out the cabin or chalet they want to stay in.  In other cases, the reservationist will help them select a cabin to fit their needs and time frame.  Our primary focus is to give the guest the best cabin available, period.  The reservationists are expected to at least familiarize themselves with, and visit, each cabin and chalet so that they can accurately represent the properties to the guests.  We currently have fourteen reservationists, and we feel pretty good about their relative fairness in regard to the suggestions they make.

WHY DON’T YOU RENT THE PROPERTIES ON A ROTATION BASIS?

 A rotation concept rewards the investor/owner who puts the least into his property.  The result is a downward spiral of product quality resulting in a declining base of repeat customers.  Our “rent the best available” policy rewards the investor who puts forth the “extra” to please the guests.

 WE THINK OUR CABIN SHOULD BE LISTED AS A PREMIUM, AND YOU ONLY HAVE IT RATED AS A DELUXE.

We want your investment to earn as much as possible.  If you price a new Chevy for as much as a new Mercedes you won’t sell many Chevys.  There is nothing wrong with a Chevy, but is must be priced lower to be competitive.  The rental ratings are created so that your cabin will be competitive within its classification.  Many times we have lowered the classification of a cabin and seen an increase in income.

 MY CABIN WAS BOOKED FOR $90 A NIGHT, AND IT IS SUPPOSED TO BOOK FOR $150.  WHY ARE THEY GIVING MY CABIN AWAY? 

It’s called yield management. The odds are that the person sitting next to you on an airplane did not pay the same as you did for their seat. Airlines offer discount pricing when they feel the need. An empty seat on an airplane doesn’t make any money. An empty cabin doesn’t either so we frequently run specials. This does make owners reports difficult to understand but our theory is the some money is better than nothing. Our specials tend to run less than 30 days out so that we can make the greatest number of full price bookings before activating the specials. The nicest cabins are in the greatest demand and are least affected by the specials.

Our base rates are determined by demand factors, relying heavily on data from previous years. The greater the demand, the more we charge. On occasion we may reduce the base rate to be more competitive, but the trend over that past few years has been upward.

 This is not an exact science, but you can be rest assured that we are equally motivated to book your cabin for as much as the traffic will bear.

 HOW MANY NIGHTS WILL MY CABIN BE BOOKED OR WHAT IS THE OCCUPANCY RATE?

 Our marketing department uses occupancy rates so that they can gauge product availability against predicted demand, as another way of maximizing your income.  We gauge success in dollars rather than by the number of nights booked.

 This is not an exact science, but you can be rest assured that we are equally motivated to book your cabin for as much as the traffic will bear.

SHOULD WE DO SOMETHING SPECIAL FOR RESERVATIONISTS TO HELP INCREASE OUR BOOKINGS?

 No.  The reservationists are paid a base hourly rate plus commission for the cabins booked.  To the best of our knowledge, they are the highest paid in our industry.  If you would like to send a thank you card or some cookies to show your appreciation to the group as a whole, this is acceptable.  If you wish to send a gift to an individual reservationist we insist that the value not exceed $30.  Gifts of greater value will be viewed as a bribe and are absolutely unacceptable.  Any violation of this policy will result in the immediate termination of our management agreement and the employment of the reservationist.  No exceptions.  Reservationists are just that.  Their job is to book your cabin and try to please the guests.  If you have a concern, you will need to talk with your owner services representative.

WHAT HAPPENS WHEN A REPAIR OR REPLACEMENT IS NEEDED IN MY CABIN?

 This is an area where conflict can arise.  There are a number of variables here. We must get the property up and running as soon as possible, 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 in-house.  We are available for emergencies and can respond quickly, 24 hours a day if necessary.  We cannot do this for free.  Making repairs to your property and furnishings is maintenance, not management.  Our charge is currently $20 per hour, plus parts. We make our money by the management and booking of your property.  We provide the light maintenance services as good managers, but they are not included in your management agreement.   Outside maintenance fees will run $45.00 per hour or more in our area.

 More involved repairs, such as air conditioning, hot tubs, electrical, etc., we will contract out to qualified, insured companies.  We do not ask for, nor accept any referral or kickback fees from contractors.

 HOW DOES IT WORK? 

We stipulate in your management agreement a $300 spending limit.  That means we can spend up to $300 on your behalf without your having to be notified.  On rare occasions, when a problem requires prompt action, and we are unable to make contact with you immediately, we will exceed this limit.  For example:  An air conditioner compressor breaks down in July.  The guest does not want to hear about waiting to get approvals.  They want it fixed now and usually remind us how much they are paying per night. We 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 us an extra housekeeping and hot tub service.  We all lose if we have to refund the guest’s money and send them away.

I GOT ANOTHER CHARGE FOR $250, HOW DO I KNOW THE HOT TUB WAS EVEN BROKEN?

You probably won’t. If you don’t trust that we are acting honestly and in your best interests you should end our relationship as soon as possible. All successful relationships, business or otherwise, require trust. You won’t have peace of mind without it and money is not as important as peace of mind. Some relationships just don’t work. No offense, no hard feelings.

WHAT IS MICRO MANAGEMENT?

 I have saved this topic for last, because it is probably the most difficult subject to discuss without offending people.  Please don’t be offended.  We want our program to work profitably for all parties. This is the most common cause of misery for the owners of investment property as well as management. Let us suppose that you are considering contracting with us to manage your property.  That means you must delegate, to us, the authority to manage.  You must trust that people you barely know will act in your best interest.  I know this is very difficult for some folks to accept, and yet very easy for others.  True, we will make mistakes from time to time, but we have been doing this for some time now, and we DO know what is required to maximize the income from your investment.

 All this, does not mean your needs, instructions and opinions don’t count.  To the contrary.  But, when you hire a management company, you have given them the steering wheel and made the decision that you will sit back and enjoy the ride… letting them do the work.  Monthly reports tell you how the investment is doing, and you can contact your Owner Representative at any time to discuss concerns.  We are more than patient and will try to help you through the adjustment period, but please understand, we cannot change the way we do business for one owner.  If you don’t trust our driving, or think we are on the wrong road, then you are free to take the wheel yourself or find a new driver you will have confidence in.  No offense, no hard feelings.

 Since you’ve made it this far, let me share a conversation I had with a very successful owner who has at least a dozen rental properties.

 I called the owner, Mr. B and told him that his couch was worn and we were getting complaints from guests. To this Mr. B says, “OK… ” I then asked him what he wanted to do about his worn out couch. After a long pause, in his slow southern drawl, he asks, “Can you get  me a new couch?” I told him that we certainly could and asked him what type of couch  he wanted? After an even longer pause, he responded even more slowly this time,  as though he was talking to a somewhat dimwitted child and said, “Jay,  I want you to get me the couch that will make me the most money.”

 I’ve never asked Mr. B if he liked the couch that we picked for him and he never mentioned it but the cabin made over $60,000 that year.  As of this writing, we are negotiating with him on the purchase of yet another investment cabin.

 Since I haven’t put you to sleep yet, I’ll tell another story.

 I should have figured out that there might be a problem during the real  estate closing when Mr. And Mrs. C first bought their cabin.  They read  the front and back of each and every document.  If you’ve ever wondered  how long it takes to read every word of small print on every closing  document, I now know the answer.  It takes four hours.  Most closings take 30 to 45 minutes.

Their cabin was sparsely decorated in a less than charming theme, combining  the best of K-Mart, Motel 6 and 1980 garage sale. Mr. and Mrs. C called us at least once a week on our 800 number, so that  they could maintain their own calendar to insure that we didn’t rent their cabin without paying them.  Every time there was a cancellation we got a  call,  “Where did the booking go?”  “What happened?”  “Why did they cancel?” They had very strong opinions about what the nightly rates should be on  their cabin.  If we ran a special, we got a call.  If we didn’t run a special, we got a call.  If there was a charge on their owner’s report for anything, we got a call.  If the cabin didn’t make as much as they thought it should in a given month, we received an e-mail, had a meeting and we got a call. We debated credit card fees, how to clean a hot tub, the proper way to fold  towels, spring cleanings, yard maintenance, window cleanings, marketing,  owner report formats.  You name it, and we debated it.

After two years, that seemed more like a hundred, the relationship finally ended. 

No offense, no hard feelings.

This next story is the catalyst for writing this paper. We are working with an investor that owns a great property who will probably not make it. Their investment property isn’t much more than a year old we are already their second management company.

 Mr. and Mrs. X have a stunning 3 bedroom investment with a fantastic view, two massive river rock fireplaces, granite countertops, great furnishings and almost total seclusion. 

 They refuse to install a pool table or air hockey although they have plenty of space. The have decided that they don’t need a big screen TV. They refuse to replace their full sized beds with queen or king size. They will not put in a washer and dryer.

In a recent owners statement they got charged for two toilet brushes and a misplaced remote control. About the same time there was a guest complaint about the hot tub cleaning. They were so distressed with these minor issues that they felt the need fly up here from Florida to straighten us out.

 The total cost of the remote control and the two brushes was $45. The cost of ignoring the recommendations of their owner’s representative for 7 months and not trusting our advice on their investment is about $15,000 plus airfare.

Despite our best efforts I expect that this relationship will end soon. They will get the first copy of this and likely terminate our contract immediately. It is probably best to get this over with sooner than later.

No offense, no hard feelings.

Jay Holeman

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