Resort Valuation

[Tim Johnson]

Hello BP!

I have a connection to an older couple that are interested in selling their resort in norther Minnesota.  It's been family owned for 60 years. It's beautiful...a dozen fishing cabins in Northern Minnesota on an entire peninsula of a lake surrounded by state forest land.  

The way I've valued multifamily properties is to calculate the Net Operating Income (Gross Income - Expenses) and then divide by desired cap rate.  When I do this for the resort, I'm not getting numbers that approach the properties value.  (I feel like the property is quite valuable, but current revenues are small).  

Are there any other considerations when valuing vacation rentals? Or does anyone have any advice?  I haven't really worked with vacation rentals before.

P.S.  The cabins are too close together to be split up and divided off.