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| How successful could a lodge be on lake of the woods me and a friend are wondering. |
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Posts: 2089
| Only 1 question.....How much money you got?An unlimited budget can go a long way in helping make a business successful. Aside from the physical property, there can be a lot of costs associated with marketing and promoting a Lodge. In the right situation, I would imagine one could make a decent living.We've all thought/talked about it, but I've got to refer back to the original question regarding money.How are you going to measure success? By a 6 figure checking account or by a stack of pics after a show season from all the satisfied clients. Helping people make memories has a lot of intrinsic value but that little show "tour" just cost you 10K. It's a dream and if you're really serious, do the due dilligence and follow your dream. It can be done. Steve |
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Posts: 427
Location: Roseau | Any chance you guys are looking at Sunset Lodge? |
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Posts: 654
Location: MPLS, MN | I'd be worried about energy prices and the weak dollar. It's going to get expensive to go there. |
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Posts: 2068
| Are you and your friend good at fixing stuff?  |
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Posts: 734
Location: Watertown, MN | Today, it is going to be tough, from what I hear resort are struggling in Canada right now. Exhange rate has hurt the economy, on labor day alot of resort were already shutting down last year because lack of business. People are not traveling with the gas price, also the cost of supplies up there have greatly increased with the US dollar being weak. Example before $1 us dollar bought $1.40 of supplies, now it is 1:1.
Troyz |
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Posts: 194
Location: Lincolnshire, IL | I think the only way one can make a small fortune in the Northwoods these days is to start with a large fortune.....Some old guy told me that one time. |
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Posts: 1516
| Justin has good reply if you can't fix everything yourself I don't think you make much $$$$ |
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Posts: 335
Location: Minnesota | As stated before, with due diligence there are some business opportunities out there in the resort and hospitality industry. But, there is a reason that the number of resorts in northern Minnesota is a fraction of how many there were 30 years ago. The fact is that land prices have gone so high that not too many people can buy a resort anymore and make it cash flow. The only way it could work is to have the money already and buy the business partially as an investment in the land and dedicate yourself to the business. That way if it doesn't work out at least you still own the land and can recoup some of your expenses and you would only be out a few years of your life with some great experiences on an awesome lake.
From what I can see and have heard, the number of resorts in Canada is not decreasing like it has in Minnesota yet but I wonder how long it will take until that happens. IMO, we will start noticing this trend on places close to the border within the next 10 years. These resort owners aren't going to live forever and some of the resorts are on land too valuable to buy and keep as a resort.
I envy the man that can make a living owning a resort. A resort owner once told me that owning a resort isn't a way to make a living it is a lifestyle. |
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Posts: 7
| You don't want to get into a fixer-upper. Find something that has a good reputation where the owners are retiring after years of doing all the re-investment for you. A resort is like owning multiple small houses. People that wait around for things to break down are always trying to play catch up. You can do well in the industry if you dedicate yourself to your business and customers. Running a resort is definitely a lifestyle. If you can step into something that is making money without having to spend a pile of it, you will be way ahead of the game. |
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Posts: 12
| I have been looking at resort/lodges for a few years now, its always been a dream of mine to live that lifestyle, but after looking at financial statements and tax papers for these buissness Im not as interested. Example- a well known resort in WI for sale, 1.2 million, did $900,000 - $1,000,000 in sales in 2006, this is a smaller place but very clean and comfortable, after all expenses and taxes the owner put $29,000 IN HIS POCKET, he said he worked his butt off for that little bit of money, after owning this place for 17 years that was his best year, no thanks! he belived he would make his money on the sale, apprecation over those years was good because he bought it cheap, those days are over and the places income could not pay its own loan now. |
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Posts: 2361
| troy trebesch - 1/18/2008 5:57 AM
I have been looking at resort/lodges for a few years now, its always been a dream of mine to live that lifestyle, but after looking at financial statements and tax papers for these buissness Im not as interested. Example- a well known resort in WI for sale, 1.2 million, did $900,000 - $1,000,000 in sales in 2006, this is a smaller place but very clean and comfortable, after all expenses and taxes the owner put $29,000 IN HIS POCKET, he said he worked his butt off for that little bit of money, after owning this place for 17 years that was his best year, no thanks! he belived he would make his money on the sale, apprecation over those years was good because he bought it cheap, those days are over and the places income could not pay its own loan now.
Aprox equalled his total investment in gross income in a one year period, but only made 2.9% above costs? That would probably be an interesting balance sheet. |
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Posts: 7
| troy trebesch - 1/18/2008 5:57 AM
I have been looking at resort/lodges for a few years now, its always been a dream of mine to live that lifestyle, but after looking at financial statements and tax papers for these buissness Im not as interested. Example- a well known resort in WI for sale, 1.2 million, did $900,000 - $1,000,000 in sales in 2006, this is a smaller place but very clean and comfortable, after all expenses and taxes the owner put $29,000 IN HIS POCKET, he said he worked his butt off for that little bit of money, after owning this place for 17 years that was his best year, no thanks! he belived he would make his money on the sale, apprecation over those years was good because he bought it cheap, those days are over and the places income could not pay its own loan now.
WOW!! I can't imagine that kind of performance would be typical. I, for one, wouldn't work as hard as I do for that kind of return. There is just no way.
Keep looking. There are places that will be worth your while. Tax returns can be misleading if an operator does a lot of reinvestment for the purpose of growing the business. The taxable net income could be very low on purpose. Management fees or bonuses paid to the working owner or family member managers can take net income down towards zero in a hurry by design. Talk to them about what they have been spending the money on. A lot of it would be considered discretionary. If they are taking good care of it, you will be able to do a minimum of maintenance and all that money they spent on building new cabins and buying floating docks, etc into your pocket instead of into the business. |
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Posts: 331
Location: Stevens Point, Wisconsin | I have gotten to know and become friends with the owners (husband wife) of a resort on LOTW. In talking with them it is really apparent that a great deal of work is needed to run a successful resort. I could not imagine owning a resort on prime musky water and hardly ever be able to get out and fish. The husband is constantly busy tending to the needs of the resort and guests. When he does have time he is too tired to go out! His wife is busy cooking meals and tending to the resort needs. The low water forced them to invest another $10,000 in dredging fees this past summer. They have I think dredged the boat slip area 3 times in the last 5 years @ $10,000 a pop!
The cost of cabin rentals has slowly jumped up each year due to the cost of operating climbing each year. Taxes, dredging, DNR mandates for new septic systems, resort maintenance, employee costs etc. All the while less and less people willing to drive to the resort because of the economy and fuel prices.
They might be full in July but come Aug, Sept and Oct they are not. What about March, April, May, December? They are open in the winter for ice fishing but the money they make from ice fishermen and snowmobile’rs just barely pays for the cost of keeping the cabins open in the winter.
They are having the land around the resort subdivided and are considering selling off lots and cabins to help generate income.
I too would love to buy a resort in Canada but after talking with them I have come to the understanding that you would have to be nuts, or hate fishing to own a resort now days. I fear that they will sell or shut down and add to the list of fallen resorts up there.
I really don’t think it’s about finding a nitch or having something to offer another resort doesn’t have. It apparent that ALL the resorts are struggling in northern WI, MN and Canada these days. Families are getting smaller and only take weekend long vacations these days, not week long vacations. The economy is suffering and gas prices are killing people on limited budgets.
Good luck!
Ask yourself why resorts are selling or shutting down on LOTW’s?
Ed
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Posts: 8837
| J-Man
Kinf of explains why towns that used to have dozens of resorts are down to a handful, doesn't it? Even if it was twice that much profit, at $58,000, think about it. You work your butt off morning noon and night during the busy seasons, all your time and energy goes into the resort, you don't even have time to fish... Then you find out your property is worth a couple million dollars. Subdivide it, sell it off in parcels, and you just put more money in your pocket than you would in the next 20 years of working your fingers to the bone.
Now, if you just want a resort, say its your life dream? Then the profits won't matter, and just having the place and running it and being there every day will be your reward. |
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| good business folks are successful....others are not. It much more to do with who is running it rather than what industry it is... |
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Posts: 12
| even if they made 150,000 a year, thats because they paid 300,000 for the lodge 15-20 years ago-now they want 4 times what they paid for it because property prices are so inflated, its easy to figure it out, buissness will only get worse if the market continues to drop and the profit from the resort wont even pay the loan let alone the up-keep, then your not buying a buissness, your buying debt! |
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| I think if a lodge can be successfull it would be on lake of the woods the lake is becoming more popular every year and the fishings amazing |
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Posts: 4053
Location: Land of the Musky | I know two brothers in Canada that both own lodges and are both worth millions. They are also smart about it..... Make sure the numbers work going in adn then make your worste case senario. If your numbers discounted by 20-30% don't work, re-think it. |
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Posts: 431
| The biggest problem is the length of the season. Those lodges are only at full capacity for a couple of months per year. Not a business for the weak of heart. |
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| LOTW is a good spot theres tones of anglers heading there so i think a lodge could be successful on LOTW |
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| the only reason that I would want to own a lodge is if I were going to give up fishing.
having gotten to know a lodge owning couple that we stayed at for several years, they rarely are on the water. |
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| couldn't agree more Hoop! Anyone buying a resort, lodge, etc on any lake is dreaming if they think it will allow them much time on the water. Most owners rarely get to fish as they are working all the time.
Make sure you think all the angles before taking the plunge.
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Posts: 31
Location: Syracuse, New York | Accepting the sale of the property, it is very difficult for a resort to make money off of the resort/fishing/outdoor activities; the margins are not high enough. Better money is in food and beverage sales, so keep the bar and restaurant packed and you can do okay.
Also, I wonder how one of these resorts could do if they went the timeshare route. Timeshare sales are still going strong, and with multiple agencies offering exchange opportunities it may give a resort a competitive advantage. It definitely eases the sting of the initial investment.
Edited by hitchcos 1/30/2008 2:43 PM
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| Theres a lot of lodges for sale right now. Theres quit a few of them that can be very successful on LOTW |
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Posts: 8837
| Hey billybob, let me ask you somethhing.
If it was such a sucessful business endeavor, why would so many people be selling them, especially in a down market?
And everyone else is right -- with gas at $4/gallon and the cost of living on the increase, how much business do you see the resorts doing this year? |
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Posts: 2515
Location: Waukesha & Land O Lakes, WI | If you're gonna do it right, cater to the ice fishing crowd. Zipple Bay Resort does and they do very good business. |
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