Lakefront rental cabins

Account Closed · 2017-07-05T06:00:59-07:00

I found an opportunity to buy a pretty good sized lot on the corner of a river and a very popular eventful lake here in MI. There are currently 11 cabins, 24 spaces for camping and some permanent Mobil homes on site. There is a beachfront area, area to park boats and it seems like a lot of potential for additions and changes. Being that it's a lake front property, I think rv/camping sites might be limited. My thought was to build more cabins to generate more revenue. I am not sure on the details yet but I believe the cabins are annual renters like lease options. Being that it's a lake and there are events in the summer and winter, this may make more sense to build more cabins so people can rent, stay and bring boats. My goal would be to generate income all year round to pay bills and make passive income in a sense. I can also leave areas vacant for camping out of the 24 available spaces. What is all involved with cabins on the water and what type of things would make more sense on a lot like this? Also in MI, what are some legal things I need to know? It is a commercial lot from my understanding.

Alex Deacon

Investor · Pittsburgh, PA · Member since 2015 · 1k+ posts · 1k+ votes

9y

@Account Closed I would tread lightly no pun intended. This is a bit aggressive for you unless you are well versed in this market. Maybe you want to partner up with another investor who is successful in this area of RE. I dont know much about the market you are talking about but when I buy here in my market if I am not sure of the pros and cons I slow everything down and research as much as possible before moving forward.

Good luck to you Jeff.

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Charlie MacPherson

China, ME · Member since 2014 · 3k+ posts · 4k+ votes

9y

Be sure you have a good handle on the water and septic situation. I would spend the money on both a professional septic inspection and water quality test. Don't go cheap on either.

I'd also want to talk to the septic pumping company the seller used to get a history over the last 5-10 years to see if it's been properly maintained.

With recreational watercraft, consider liability insurance for accidents or deaths.

The other potential zinger I see is flood insurance. Talk to a local agent to get a quote.

Finally, I might do a test by building only a few cabins and use other spaces for RVs and tent camping. I suspect you're right about more revenue coming from cabin rentals, but it would be smart to verify that before you go all in on construction.

PS - make sure you provide wi-fi across the entire property. Otherwise Mom and Dad are going to be faced with very cranky kids.

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Account Closed

OP

Shelby township, MI · Member since 2017 · 17 posts · 2 votes

9y

Thank you Alex and Charlie. I am in the research stages right now. My partner owns personal property on this lake and was looking to buy a rental property out there and possibly turn his into one. He has became close with residents there, one of which just signed for a similar deal. My partner is also doing research. On this particular lake, there is a sewer system but has well water from my understanding. We are looking into this as well with this property. If this owner is tied in to the system that's a huge plus. Thanks for bringing up the septic points Charlie. WiFi was also on my list. I like the idea of starting with a few additional cabins. First we are going to find out what the current situations are on the existing cabins. Like I said we are in the research phase as we speak and still need to contact the owner. Its been listed for a couple years but does not have a for sale sign out front. My partner has a friend there that is a realator. I think this property has a lot of potential. My other idea was to build a central shower/rest area for additional cabins. With the annual renting or leasing, we are looking into what owners are charging there and what the pros and cons are. We also thought about the liability insurance for boat rentals or even having docks for boats to be docked. We even ran the idea of possibly building a tiny house community but that's a whole other story itself and is just an idea at the moment. We are more focused on what the property produces as is and what mods we can make to increase income. Again I appreciate the feedback.

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Rene Remington

Auburn, CA · Member since 2016 · 26 posts · 9 votes

9y

Hi Jeff,

Sounds like a great property. It also sounds like a big project to start with I agree with both Alex and Charlie. My motto slow and steady wins the race. Best of luck.

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Account Closed

OP

Shelby township, MI · Member since 2017 · 17 posts · 2 votes

9y

Thanks Rene! Yes I know it can be a potentially big project but I'm no stranger to taking on bigger projects and neither is my partner. I am trying to get all the info together to really analyze this property carefully. We have a potential investor lined up already. We both research before jumping into anything regardless of what it is and we both have a lot of connections that can be useful. My main concerns right now are the books and year round income, coming from the property. I have the tendency to modify things regardless of what it is I'm doing, to increase value. I do believe this property hasn't really been advertised much for business and can use updating to more modern times. My partner is going to speak with the owner real soon, maybe as soon as this weekend. We will go from there. I just wanted to know If anyone has experience in this field and can give any tips that we may be missing or not aware of before we speak with him.

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Sarah Present

Denver, CO · Member since 2015 · 31 posts · 2 votes

6y

Hi Jeff - how did it work out? Did you purchase the cabins? :)

Sarah

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Lakefront rental cabins

Lakefront rental cabins

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