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Planning to invest $100k in a beachside and build small wooden cabins, is it a good idea?
I’m considering investing $100k in a beachside land lot and another $100k to build 10 small wooden cabins. The average nightly rate for similar cabins in the area is about $50, so I’m trying to figure out if this could be a good investment. Here’s the math I’ve been working with:
- $50 per night per cabin
- 10 cabins = $500 per night (if fully booked)
- Assuming a 50% occupancy rate, that’s about 182.5 nights booked per year for each cabin.
- 182.5 nights x $50 = $9,125 per cabin, per year.
- For all 10 cabins, that would generate roughly $91,250 annually, before expenses.
With $200k invested upfront, I’m thinking I could recoup my investment in a little over two years, depending on maintenance costs and other expenses. After that, I’d own both the land and the cabins outright, with a solid income stream moving forward. Does this sound like a reasonable plan, or am I missing something? I’d love to get some advice from anyone with experience in real estate or vacation rentals. Thanks!
Planning to invest $100k in a beachside and build small wooden cabins, is it a good idea?
I’m considering investing $100k in a beachside land lot and another $100k to build 10 small wooden cabins. The average nightly rate for similar cabins in the area is about $50, so I’m trying to figure out if this could be a good investment. Here’s the math I’ve been working with:
- $50 per night per cabin
- 10 cabins = $500 per night (if fully booked)
- Assuming a 50% occupancy rate, that’s about 182.5 nights booked per year for each cabin.
- 182.5 nights x $50 = $9,125 per cabin, per year.
- For all 10 cabins, that would generate roughly $91,250 annually, before expenses.
With $200k invested upfront, I’m thinking I could recoup my investment in a little over two years, depending on maintenance costs and other expenses. After that, I’d own both the land and the cabins outright, with a solid income stream moving forward. Does this sound like a reasonable plan, or am I missing something? I’d love to get some advice from anyone with experience in real estate or vacation rentals. Thanks!