Seem like a good investment?

[Mike Scott-Smith]

Hello fellow BP members,

We are FL (no income tax) residents and are currently looking at an out of state investment opportunity.  The details are as follows.

All numbers below are approximations (estimated on the higher end of the scale)

• .60 acre wooded lot close to NC mountains - $32,000 with closing costs
• Tree removal for cabin location - $1,500
• Water tap - $1,500
• Septic - $2,500
• Electric connection - $1,500
• Concrete work (driveway etc) - $5,000
• Small 2 bedroom cabin - $75,000 (with all of the BEST features)
• Garage (must have with small cabin) - $7,000

All in cost right about $125,000. There is a creek that runs the boundary of the property in the back, and green space across the street. One lot to the right, and nothing to the left.  The cabins are managed locally on property, and fees are taken from nightly rents. Fees include WiFi, cleaning, basic maintenance, bookings advertising etc... The claim is that a 2 bed cabin with garage nets the owner $12,000-$16,000 per year in returns. Being in the mountain region the cabins rent from April - November and are winterized (or owner used).

If my math is correct, not including any required state income taxes, the return would be approximately 9.5-12% annually (after state income tax 7.5-9.5%).

Does this seem like a worthy investment? I am not at all taking into consideration the appreciation or long term nightly rate increases.

Thanks,