The impact of careless decisions on your bottom line

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The impact of careless decisions on your bottom line

Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes

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.

[email protected]806-672-7102
SMOKY MOUNTAIN FALLS INC.51 Review
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Matt Devincenzo
Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
6y

Why don't you just drop them from your program? It doesn't sound lke they are a good fit with what you offer, so just find someone different that is.

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  • Matt Devincenzo
    Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
    6y

    Why don't you just drop them from your program? It doesn't sound lke they are a good fit with what you offer, so just find someone different that is.

    1Reply
  • Collin HaysBusiness Member
    OP
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    6y
    Originally posted by @Matt Devincenzo:

    Why don't you just drop them from your program? It doesn't sound lke they are a good fit with what you offer, so just find someone different that is.

     We will likely do that. We haven't ever fired a client before, but this one might be the first.

    [email protected]806-672-7102
    SMOKY MOUNTAIN FALLS INC.51 Review
    WebsiteView Page
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  • Ken Boone
    Investor · Greenville, SC · Member since 2015 · 1k+ posts · 1k+ votes
    6y

    Colin,

    My theory is that every 2 bedroom cabin in the smoky mtns has a hot tub and and multicade.  If you don't have both of those you can't even compete with the "average" 2 bedroom cabin up there. I always strive to throw as many extras in my cabins as possible to try and rise above the average.

    It could be that your customer just likes the idea of having their own cabin in the smokys and just wants to have someone else manage it to help "offset" their costs while not using it.

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  • Paul Sandhu
    Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    6y

    Your problems could also apply to people that are trying to do Rental Arbitrage.

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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    6y

    That is why it is better to own so you have full control and are building equity instead of just having a job.

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  • Stephen Ray
    Bel Air, MD · Member since 2018 · 30 posts · 19 votes
    6y

    @Collin Hays I'd love to see your "data" on the examples of how a name change affects whether or not a cabin rents well. This seems really silly. Everything else makes sense. @Ken Boone my 2 bedroom cabin doesn't have an arcade game, just wasn't a good place to put one, and rents EXTREMELY well. But i could be the outlier in that sense.

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  • Collin HaysBusiness Member
    OP
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    6y
    Originally posted by @Stephen Ray:

    @Collin Hays I'd love to see your "data" on the examples of how a name change affects whether or not a cabin rents well. This seems really silly. Everything else makes sense. @Ken Boone my 2 bedroom cabin doesn't have an arcade game, just wasn't a good place to put one, and rents EXTREMELY well. But i could be the outlier in that sense.

     I can’t self promote here, but we had a cabin called Moonshine Manor that did about $22K a year.  We implored the owner to let us rename it.  After 3 years, they allowed us to, and it did $31K over the next twelve months.

    Product names matter.

    [email protected]806-672-7102
    SMOKY MOUNTAIN FALLS INC.51 Review
    WebsiteView Page
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  • Ken Boone
    Investor · Greenville, SC · Member since 2015 · 1k+ posts · 1k+ votes
    6y

    @Stephen Ray...  I get that.  Doesn't always fit and I am speaking in general terms for the average cabin.  There are always other aspects that could make a cabin do better as well.. i.e. location, view, etc..  You do what you can do with the cabin you have to work with.

    @Collin H.    I think some names can be a hinderance to some people.  In your example your customer probably didn't have many folks renting that had an aversion to alcohol with that name.  I can see how that might have turned someone off of that cabin.  In general I don't think they matter too much, however, against common wisdom, I had to change the name of the last cabin I purchased.  It was called Million Dollar Views when I bought it.  The views are amazing but I kept running into problems with cleaners, pest control and guests thinking they were talking about my cabin but were talking about one of the other 10 cabins in that area with the same or similar name.  

    The day before a guest showed up, they messaged my wife, saying that their relative looked at our reviews online, and that if all these problems weren't fixed and the pool wasn't cleaned and on and on.. then they want a full refund.  And we were like whoa.. what are you talking about.  Basically they shared the cabin name with their relatives who went out and googled it. Someone else with a cabin up there with the same name took out a google ad for their cabin.  So their cabin with the same name was popping up on the right side of the google search.  Well they had awful reviews with all kinds of problems.  At that point we said enough is enough and changed the name.  So although I don't think they are hugely important, they do have to fit the area and be as unique as possible in my opinion.

    1Reply
  • Michael C.
    Investor · New York, NY · Member since 2019 · 91 posts · 92 votes
    6y

    @Collin H.

    Hi Collin. We are looking at some cabins in Smokeys. Would be great to connect.

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