Is building a home in Brian Head for STR a good idea?

[Paul Sanders]

Years ago, I fell in love with the Brian Head Utah area as it's close to several national parks, skiing in the winter and lots to do in the summer. I tried to buy a place before the pandemic frenzy took off and was outbid on several properties. Instead, I settled on a property (raw land in a subdivision) on which I could build a home with the goal of renting it out and eventually retiring there (~15 years from now). However, the costs of building have also skyrocketed and with rates climbing I feel like I'm being squeezed out again. I've started the process of securing a conventional construction loan, have a builder lined up and am ready to go once the snow melts. I've researched the other STR's in the area using AirDNA and feel like it's a market that's growing but also seeing more competition coming into the area as a result. I've read through many starter blogs on BP, attended several webinars on this website, and tried to do my due diligence. I'd like to cover the mortgage and expenses of the property and use it a few times a year myself but am increasingly worried about the revenue being able to cover the costs due to rising rates and the large upfront investment of building the home. I have the equity in the property to cover the 20% needed for the loan and the DTI, but just barely.

Reading in the forums I don't see many investors following a similar path, typically instead purchasing an existing property.  Looking for some unbiased feedback on whether or not this approach is workable or too difficult for someone new to this whole process.  What advice would you share?