All Forum Posts by: Anne M.

Thanks, @Jeff Wallenius We decided to stick to index funds for now. Too busy with life in other departments to jump start a real estate investment at this point. Maybe sometime in the more distant future, so thanks for the offer!

I wonder if someone from Montana can comment on the difference between a place like Big Sky which is a developed resort town and West Yellowstone which is surprisingly smaller and Babb which I'm not even sure is technically a town... It has one motel which is in a great location for visiting the Mani Glacier area and is fully booked in season, even though they don't even have a website. Issues with taxes? Or maybe Babb is Blackfeet tribal territory, making this more complicated?

Thanks for the input. That's very interesting, especially the information about the cost of building in Alaska. Wow.  

Coming from a very crowded country, I can see the appeal of wanting to keep these areas empty. That said, where there's a national park, like the Kenai Fjords NP or Yellowstone, it's bound to get crowded during the season, so investing in infrastructure and local businesses would be so much better for everyone. 

Not living in the US, I have the perspective of an overseas tourist so my apologies if this is a stupid question (I'm pretty sure I heard @Brandon Turner say that there's no such thing as a stupid question on the BP forums but I do sometimes wonder if I'm putting this words to the test ;) ).

So, what I'm seeing is some places get overcrowded with tourists in season and there's simply not enough room for everyone to stay at reasonable prices. Specific places which come to mind -

Yellowstone National Park, Glacier National Park (the Mani Glacier area), Yosemite, Seward, AK, and there are many others. 

Take for comparison Gatlinburg and Pigeon Forge in Tennessee, where there is also some seasonality but there are also many more place to stay, so prices are more affordable for us tourists.

So, for example, looking at the town of West Yellowstone, MT or even the hamlet of Babb, MT, there's no shortage of space there. Plenty of empty lots in West Yellowstone and as for the Babb area, you can't actually buy a small lot, just a really huge chunk of land. Why aren't investors getting more motels or vacation rental units up in these areas? 

I realize these two parks are extremely seasonal, but still here's my line of thinking -

Get plot at West Yellowstone for $70K

Build a small motel/resort with 20 rooms for another X amount of dollars.

Rent the rooms at $120 a night and you'll likely be booked solid throughout the season, so that's 4 months a year.

120 * 20 * 160 = 384000 in revenue

Rental vacation management costs are 30-50%, let's say 50%, so you end up with $192K every year.

I have no idea as to what the building costs might be for a 20 room building but with almost 2 million dollars in profit every decade, surely you'll be covering the costs fairly quickly?

So, why isn't this happening? I'd be seriously tempted to do this myself, I just figure it's way above my league as someone with zero experience in real estate and/or the hotel industry.

I am guessing this could be where I'm getting things wrong -

1. High building costs due to the location (with nearest urban centers being at least a couple of hours away).

2. Local regulations preventing this somehow.

Would love to hear input from people invested in vacation rentals, multiplex building or these areas of Montana. Alaska works too - I've been spending this morning making reservations for our Alaska trip of 2017. Some places are already booked solid a year in advance! 

@James Triano I absolutely agree. In the end, we have two resources that are interchangable: time invested vs. money. Put in more time, you should get more money. There is also the element of risk but that's there anyway, whether you're managing it or letting others manage it for you.

You're absolutely right that by distancing ourselves from the business (like we do in index funds or even just stocks), you're putting in less time and gaining less money because you're essentially "paying" others to manage your business. One hopes that they are good at what they do (have the expertise) so that outsourcing that management part will be a smart move.

And then, there's always luck too! Even in real estate, from everything that I've been reading and hearing on the podcast, having luck on your side tends to help. 

Thank you! 

@Nayt Grochowski thank you for sharing the excel sheet! Is this something that the property manager supplied with before you bought the property? If so, would you say it was an accurate reflection of the actual return? For a totally hands-off operation this seems like a sweet deal. Where in the US is that?

Congratulations! The cabin looks fantastic as do your other properties! I am guessing your guests are mostly Americans? 

Hurricane isn't scenic but the drive between the town and Zion NP is! We've stayed in Hurricane and in Springdale before and I much prefer the former (as a traveler). Springdale feels a bit like Estes Park, Co or West Yellowstone or even Gatlinburg, TN. I think it's smaller but it has the same sense of not being a "real" town, just a place that's all about tourists coming into the national park. It means everything is generally "fancier", more expensive and less "authentic". For me as a non-American traveling that's a turn-off. I much preferred staying at Hurricane which offers all of the stores and chain restaurants. That said, I'm not necessarily a typical tourist (if there is such a thing).

My impression is that most tourists visit Zion for a day. 2 days at most. These people want to stay in a hotel/motel in Springdale, as close as possible to the park itself. We stayed at vacation rental on our last visit but we were there to visit more than just Zion. We drove all the way to Cedar Breaks one day, and hopped over to see Bryce on another. We even visited St. George one evening. Hurricane was perfect for that, allowing us more flexibility at a far better rate than any Springdale hotel would.

I guess some Americans may go to the areas for vacations "in nature" but that wouldn't have to be near Zion NP itself. The park is fairly crowded these days (you can't find a parking spot near the visitor center after 10AM). If you want a peaceful outdoorsy vacation in nature, away from the crowds then I would actually stay away from Springdale. Have you tried the other side of Utah? I'm thinking Moab. It's more attractive to people who want to go beyond one canyon in one National Park (which is what most people do when they visit Zion NP).

Please remember  I have no experience in being a VR owner or a real estate owner in the US. I'm new on BP, just learning the ropes, so the above is just based on my own experiences of traveling in the US.

 Thank you for sharing your opinion. It's one that doesn't get voiced often on BP. I wonder if maybe that's the case in California more so than in other areas in the US? 

I don't see RE as a short-term investment if you stick to the BRRR model? I'm also not sure REIT is necessarily a good short-term investment. We're invested in those as well and they can go down too so if you're pressed for cash, you may or may not sell them a profit. That's my understanding of it, though I'm far from being an expert on this.