As a resort or campground buyer, you are about to spend a considerable amount of money on a business that you have never run before. You might be feeling a little nervous. If the economy goes bad, will your new business survive? While nothing in life is guaranteed and it would sometimes be nice to have a crystal ball, here are some things to consider. Family travel habits For people who travel, you can...
Is Your Minnesota Resort at Risk? There are many joys and challenges associated with owning and running a Minnesota Resort. Resort owners love to share their ideas about what they perceive is their biggest obstacle to success and the biggest risks to the industry. Some owners will get political, some will blame invasive species, others will blame VRBO rentals, still others will blame the rising costs...
What is a CAP rate for Minnesota resorts? Before we understand the answer to this question, buyers and sellers should understand there are many different standards that are used in commercial real estate valuation and appraisal. There is the GIM (Gross Income Multiplier) approach, the NIM (Net Income Multiplier) approach, the replacement cost approach, the EMV (estimated market value) approach and the...
What do you think about when buying a Minnesota resort or campground? One of the first steps in buying a Minnesota resort or campground is deciding what characteristics will be just right for you and your family. For many people, their idea of a classic Minnesota resort is a small number of cabins and/or RVs, a lodge, and a pristine shoreline with great swimming and fishing. However, some families...
According to the Explore MN Winter 2022 Tourism and Hospitality Industry Survey Findings, 82% of MN resorts reported winter 2021/2022 revenue at or above 2019 levels. Lodging revenue relative to recent years varies by accommodation type, with resorts doing better than motels/hotels (82% vs 48%). In general, winter travel activity in MN is improving, however, recovery is still in...
The U of M Tourism Center is a beneficial resource for resort/campground owners. As resort owners, we always appreciated the work of the many people who put time and energy into reporting the health of the tourism industry. Along with Explore Minnesota, and the various Chambers and Visitor’s Bureaus, the U of M Tourism Center has made a huge impact on how resorts have responded to...
Questions About Buying a Minnesota Resort Buying a Minnesota resort is exciting, and you will have many questions about the hospitality business. They may be about marketing, local government issues, customer relations, equipment rentals, and more. Fortunately, there is a strong hospitality network in Minnesota that can assist you at both a local and statewide level when buying a MN Resort. ...
Does this resort cash flow? This might be the question we get asked the most about the resorts we have for sale. It is an excellent question and if you are asking this question, it means you know that resort ownership is not all about the lifestyle - you have to pay the bills too! What you may not realize is that resort ownership isn't analyzed like other opportunities. So, what does it mean...
What is Cash On Cash (COC) return for Minnesota resorts and how does this term relate to valuation? Unlike the Capitalization (CAP) Rate for resort valuation, the Cash On Cash (COC) return for Minnesota resorts is not nearly as nuanced. The COC return is also called the Equity Dividend Rate. Simply stated, this is the rate of return on an investment measured as the ratio between the cash flow...
When looking at Minnesota resorts for sale- choosing an agent is key. Whether you are buying or selling, you want the right professional working for you. There are differences you should understand. Buying or Selling a Minnesota Resort Realtor or Real Estate Agent? A real estate agent is a professional who assists in the buying and selling of properties and has obtained a real estate license to do so....