Lakefront rental cabins

[Account Closed]

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.

[Charlie MacPherson]

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.