Resorts & Lodges For Sale in the Ozark Mountains
Bull Shoals Lake ~ Norfork Lake ~ White River ~ Missouri Ozarks
Gary Cooley, Realtor Resort/Tourism Specialist

The Mini Resort Advantage

What Is A Mini-Resort?
I coined the term "mini-resort" to identify small resorts that can be successfully operated by two people, usually a husband wife team. I classify a resort as "mini" if it has six or less units. This is because two people can properly clean six units in six hours. Mini resorts have several other advantages which I detail below.

What is the difference between a mini resort and a "small" resort? I classify small resorts as operations with seven or more units that need to employ one or more cleaning people, who are especially necessary if the operation also has a boat dock and rental boats. Mini resorts tend to be part-time operations, small resorts are full time operations.

The other major difference between a mini and a small resort is that the small resort, being a larger operation, can financially support the owners. But a mini resort, unless you pay cash for it, cannot financially support its' owners. Then what sense does it make to buy a mini resort? Who are they best suited to?

Living For "Free"
Many people buying mini resorts have already made their money in life and just want to preserve their nest egg. Retired military personnel are fine examples. Other mini resort buyers have full time jobs with good benefits, but want to supplement their income with a part-time business.

There are other reasons why people buy mini resorts. However all center around the concept of "living free" on the property while income is derived from other sources. Living free refers to the concept that the rental income will pay the property mortgage and expenses, thereby freeing up the owner's income from other sources. Because the owners live on the property the resort pays for their mortgage and some other expenses.

Mini resorts are well suited to those ready for semi-retirement. They want to quit their jobs and move out of the city. They already have good retirement benefit programs paying for their health insurance, plus they'll receive a monthly pension check. They also have savings and investments, their "nest egg" that they really prefer not to touch. If they can buy a place to live without making mortgage payments out of their savings or pension checks, and if the property appreciates in value, then they come out ahead.

If a semi-retired couple buys a mini resort with a 30 percent down payment, they'll be able to "live free" in the owner's home because the rental income pays the mortgage, utilities, and other expenses. They are not making much money, but they are not having to dip into their savings. They enjoy contact with their guests, and they enjoy having something to do, something to build upon.

If they play their cards right and increase the annual sales a little each year they'll be able to sell the mini resort in 8 to 10 years at a nice profit and enter full retirement. They will still have their original nest egg, plus the profit from selling the resort. They have had the satisfaction of having their own business, and they've had fun serving their guests. The operation paid a majority of their living expenses all those years. And finally, they enjoyed tax advantages that are hard to get any other way.

A Good Way To Test The Resort Lifestyle Waters
Because mini resorts are half the cost of a small resort they are much easier to buy and sell. I've seen more than one couple buy a small resort then two years later decide they did not like it. They try to sell, but due to a high asking price get stuck with the property for several years waiting for a buyer who can afford the place. When you start with a mini resort you greatly reduce your resell risk.

Get local jobs for the security of a regular pay check and benefits. Then buy a mini resort that you and your spouse can operate, and find out the safe way if the resort lifestyle is for you. Learn about the guests, the local competition, and the hospitality industry. Then in a couple years, if you really want to become a Small Resort Millionaire, quit your jobs, sell the mini resort and buy a larger resort.

Your jobs keep you in benefits that you don't  have to buy completely on your own. Your regular paycheck is real nice in the middle of the winter slow season. With the mini resort you have tax advantages to protect your employment income, advantages you'd not have otherwise.

You'll have lots of time to shop for a larger resort should you choose to pursue that course. And if you find one you want to buy, the local banks will take you very seriously because you have already been the successful operator of a smaller resort. Your management skill is proven. On the other hand, if you decide the resort owner lifestyle is not for you, it's easier to sell a mini resort than a small resort.

The Family Plan
Buying a small resort requires a cash down payment most families just don't have. Moreover, even if they do have the down payment, most small resorts will not generate enough annual profit to raise children and save for college tuitions. The mortgage payments rapidly eat up available cash flow.

With a mini resort if one or both parents work, or if one works full time and the other part time, then the family gets the health insurance they need, the employment income, they live on the resort "for free", and they get the tax advantages of living on the property. If the children are the working type they can contribute considerable value to the resort operation. They'll also learn to deal with the public, and they'll learn the responsibilities of small business ownership.

Advantages Over Regular Rental Income Plans
Buying rental home properties is a long term investment in most good markets. The way to come out ahead is usually to buy, rent, and hold. A mini resort is a similar program, but in my opinion has some advantages over separate residential rentals. You can shut the resort down for four or five months out of the year and still make as much money as renting houses all year. Because you live on the property you'll have tax advantages too.

The disadvantage is that you will work harder when the resort is open. If you are working jobs you will not have much free time until the end of the season. During the three month high season you will work hard all week if you have both a job and run the resort.

More Options
I've covered the basics here. If the mini resort idea is one you like, phone me and I will discuss it in more detail.

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