Investment alternatives…townhouses vs. small resort

[Catalin B.]

I am wondering what experienced investors/builders might think about the following investment scenarios (sort of passive income):

1. Buy the right piece of land and build a five/six row of townhouses and rent them out (@1,500 sf/unit, maybe rent them @$1/sf or a bit more)
2. Buy a beachfront property overseas and build a small resort (six luxury villas/bungalows) each with private plunge pool and stunning views (charge $350/$400/night)

-option 1 is less risky than option 2 but rewards are considerably lower for option 1.

-option 1 has lower entry costs since the beachfront properties can get very expensive (anywhere from $2/sf up to $20-$40/sf)

-construction costs in US are considerably higher…$120-$140/sf vs. $75-$80/sf overseas (high quality)

-loan service costs are cheaper in US vs overseas…

-reselling in US is much easier vs overseas

-maintenance people, managers and operation costs are way lower for option 2

I know that these are very broad different scenarios with a lot of variables…however I am trying to see if I can get some feedback.