If I build it will they come? Considering unique-STR island

[Gabe Lemons]

Considering buying an island on a river in the pacific NW with an existing house that needs some work. I think it's got great potential to create a unique STR experience. I can imagine some challenges having an island house with boat access presumably needed for everything. Existing house looks ok just needs some modernization and upgrading to maximize the opportunity. Anyone have any experience with something similar? Any chance I make money on this or do I need a figurative slap in the face to avoid blowing a bunch of money here?

[Michael Baum]

Hey @Gabe Lemons, give me some details. Where is this located. I am in the PNW. I can give you some idea if it will work or not. I have kind of an idea of what you are talking about....

[Gabe Lemons]

@Michael Baum

PM’d you

[Michael Baum]

Ok @Gabe Lemons, sent you a PM back with thoughts.

Basically, no way it will cash flow, IMHO.

[Paul Sandhu]

Originally posted by @Michael Baum:

Ok @Gabe Lemons, sent you a PM back with thoughts.

Basically, no way it will cash flow, IMHO.

 I was going to say the same thing.

[Kevin Boyd]

How can anyone say "no way it will cashflow" if you don't even know any details like purchase price?

[Gabe Lemons]

Thanks Fellas. Yeah it looks like even more of a passion project than I was hoping it might be. Maybe down the road...

[Onan Dumas]

@Kevin Boyd

They pm’ed each other. See the above messages.

[Gabe Lemons]

@Kevin Boyd asking 1.2M I think it could be had for closer to $1-1.1M. There aren't really any good comps I can find on Airbnb etc... most higher end STR in the area see 70%+ occupancy in the summer. It'd definitely be a unique stay. Cleaning/maintenance etc... would be expensive and problematic. Might get some fisherman in the spring + fall to extend the window. Guessing $1k-1200 per night. Probably 50-100k to fix it up. Would probably need to include a boat in the rental or at least boat ride guests out.

[Michael Baum]

Hey @Kevin Boyd, We were PMing each other so I had the listing and the details on the property. Plus I am very familiar with the area he was looking at and know the vacation rental market there.

Sorry we were kinda on the DL. :)

[Douglas Fox]

I had a friend who had a fabulous rustic cabin on an island in the middle of Lake Winnipesauke in New Hampshire.  On my first visit to the island, he had just brought me and several others over to the island on his boat.  It was a gorgeous fall day and the place was looking absolutely spectacular.  I went over to my friend who was a jet engine  engineer, and being full of enthusiasm for having just landing on the island, I said to him:  "There must be a lot of advantages and disadvantages of living on an island."   He was smoking his pipe, he slowly dropped the pipe from his mouth and turned to me and said:  "I can't think of one advantage."  He slowly turned and walked away.  I never will forget that moment.

[Gabe Lemons]

Hahahaha!

[Shiloh Lundahl]

@Gabe Lemons is it a property you really want to own? If so, then the approach might me different. For example I am in negotiations to buy a property in Costa Rica right now. It is a 4 bed, 3 bath house with a guest house in the mountains overlooking the lush valley below. According to some Airbnb experts the property probably will not cash flow a lot but it should break even or even loose a little money. But I really want to own the property so I am moving forward with it. One of my vision board goals is to own a home like this in Costa Rica and this is an opportunity to do so. The cost is 450k and I will be taking on private money financing to purchase it at 8 - 10%. As I pay off the private money over a 3-year period of time then obviously the property will start to cash flow. It won't create the type of return that I usually get on my investments but it will lessen the cost of owning the property because I will be able to offset the cost with the STR income.

So really, it depends on whether you really want to own the property or not in my opinion.

[Paul Sandhu]

Originally posted by @Kevin Boyd:

How can anyone say "no way it will cashflow" if you don't even know any details like purchase price?

 I've said it before in my previous posts about running STRs.  You need 3M talent.

Mechanic

Magician

Mindreader

[William Beck]

Only thought here is how difficult will it be for travelers to get there? If it's an island like San Juan Islands, and you need to get a ferry to stay there - that's just one extra step between the guests being able to book it and show up to use it. If it's an island that has a bridge, that's totally different. I think @Douglas Fox nailed it with the " He was smoking his pipe, he slowly dropped the pipe from his mouth and turned to me and said: "I can't think of one advantage." It's an interesting idea I'd just be very cautious. 

[Michael Baum]

@William Beck, the San Juan's are easy to get to on the ferry. It is a very popular destination most of the year for vacationing. Whale watching, hiking, biking, fishing among other things are the draw.

I lived in Friday Harbor for a year. :)

[Frank Borzen]

We do it in the Florida Keys. The islands are very close to land. It's more of a Swiss Family Robinson type of experience vs a Cast Away type of experience. The islands book at a similar rate to other vacation rentals. Probably a bit more $, but not too much more. The structures on them were existing. To build today at today's prices and today's codes would be cost prohibitive.