Multiple Rural / Remote Cabins to pay for mountain property?

Question

The wife and I have been considering buying 100+ acres of remote, mountain, forested land in KY, east of the Daniel Boone National Forrest for years as a retirement spot. Beattyville, Jackson, and Salyersville are a few of the placed we have looked. There are rugged raw properties going for right around 1K per acre; however, I'd still need for the property to pay for itself. If I installed several small Park Model "log" cabins as STR "weekend getaways", is it realistic to expect them to cover the bills (accounting for seasonal variation)? I assume the occupancy rates are fairly low in these areas, since it's not close to any major attractions, but I have not found solid numbers to back this up. Hunting and 4-wheeling are the biggest past times in these parts. Old Logging roads to hike or 4-Wheel on. I'd have to have someone professionally manage since I am in TX and still have about 5-10 years till retirement. Not looking to get rich off of this, just have it be financially viable. Thoughts?

John Underwood · Answer

You would need to split off the land where you live or prorated all the expenses based on this being your home too.

You might want to talk to a CPA first about how to best structure something like this.

Chris Watson · Answer

Here is another solution:

Buy a STR somewhere else that cashflows more than enough to pay for the land.

Andrew Steffens · Answer

To me it sounds like high risk with minimal reward.  To be successful you need people to come and stay.  If people are not searching this area for stays they will not find you.  You could market them yourself, but that is also not easy or cheap.

Jules Aton · Answer

I think the biggest issue is there are no comps and unfortunately the old adage of if you build it they will come doesn't often come to fruition. The area doesn't sound like it has a large draw. If you can afford to purchase a smaller parcel of land and build one home that you would like for your retirement you might have a better chance of STR or LTR in the interim to offset some of the costs.

Mike Grudzien · Answer

This almost feels like an uphill battle, forcing it to work.  I agree with scaling back and doing it right.

Michael Baum · Answer

Hey @Thomas B., well you still have to look at property improvements.

Septic, electric and well for sure. I would really look at making sure at least these are available or in place.

Thomas B. · Answer

@Michael Baum, Road frontage power is available, the rest I would have to develop. As long as I don't stray too far from the road, the cost should be minimized. Septic and water I'm all ears to solutions there.

@John Underwood, Yes, I have explored the tax implications that later, , residential use would cause. Not necessarily a deal breaker as long as the math works. Subdividing it may be the simplest path forward.

Does anyone have any factual STR numbers that I could plug in for underwriting potential deals?

Multiple Rural / Remote Cabins to pay for mountain property?

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