Lake house Short term rental

[Jared Luhman]

I would like to buy a lake house in northern Minnesota to use as an STR when we're not using it. There are a few big lakes and then lots of smaller lakes close by. The houses on the big lake seem to be worth $100,000-$200,000 more for a similar house. This would be our first STR and I'd like to spend a little less while we figure out this new business model. I'm curious if people have thoughts on whether or not it's worth it to buy one on the big lake or if the smaller lakes will do just fine? Am I looking at this the wrong way? What other things do I need to consider?

[Jeff Schemmel]

@Jared Luhman it's really important to work with a local realtor who knows the local rules & regs. There are many lake associations where STRs have been forbidden, so that is probably the first recommendation I have. Second, talk to a lender or two who owns short-term rentals or at least rentals, in general, to find out what loan options you have. We have clients who have utilized a 10% down vacation home loan for purchases exactly like what you're describing with some success. STRs are extremely seasonal in MN, and typically vacancy assumptions are around 65-70% in the analysis phase, but I have seen some clever owners come up with great marketing plans that include marketing to hunters/snowmobilers/etc in what we'd call the "off-season". pay very close attention to what's close by the property and don't "settle" is my advice. neighbors also matter a TON with STRs. Neighbors who don't want your STR there can kill your reviews.