Published on Monday, October 26, 2015 by Land Century
The one main difference between a resort developer and a small investor is that the developer has more leverage and money at their disposal. What does this do? This allows the developer to:
* Negotiate rates for larger pieces of land.
* Buy land with minor faults that they can have corrected.
* Land deals with the confidence that they will make their money back on their investment.
As you probably guessed, resort developers must negotiate several deals. This is because a resort may be able to exist on a lot that is just 15 acres, or the resort may need hundreds of acres depending on the design.
How Resort Developers Find and Buy Land
First and foremost, resort developers have an idea of the type of land they need. For example, a resort that wants to open its doors in Florida on the beach will know that they need to find a beach location. This actually narrows the search field significantly and assists the developers in finding a piece of land that's suitable for their needs. Some developers will even have an exact location or beach where they want to be located.
When this is the case, they will likely try to negotiate land deals with any owners in the area. A great example of this is Daytona Beach. A resort may want to build on the beach, but they need a specific amount of land. If they only have 15 to 20 acres that they need, they will do a few different things to try and ensure that their plans can proceed:
* They will talk with surplus landowners and try to purchase any lots that they have available.
* They will use the money that they have to purchase lots from current owners for a premium.
Theres a lot of red tape that goes along with this process. The developer must also talk to the township and city to ensure that they have the permits and ability to build the resort. Otherwise, this is just a waste of venture that can result in millions of lost dollars.
Working with many different businesses and realtors, developers are likely to hire somebody to find different lots of land that are potential sites for the resort. This allows the developer to go along with their daily business while someone else takes on the task of finding the perfect lot of land. Oftentimes, developers will be able to buy specific lots and then have to negotiate with current landowners to come to a compromise.
Its a very difficult process in some circumstances, and if an owner does not want to sell, the developer may have to reduce the resort design or choose a different line of land where they can buy property.
The Difficulty of Finding Large Lots
Anyone can find a large lot of land in a secluded area. In fact, this land is probably dirt cheap and beautiful. But, resort developers need land that is highly trafficked. It wouldnt make sense, from an investment standpoint, to purchase land that is far from a city center. Tourists want to be surrounded by entertainment and activities, so theres a small radius in which a developer will need to find the perfect lot of land.
And, finding the right large lot is a timely and costly process.
Developers have a lot of leverage because they have a lot of money to invest in the local area. This can cause a problem for some owners when jobs are scarce. Developers can bring in thousands of jobs, even if it's just during the initial building, and cities are known to help the developers get the land they need as a result.
Remember, resorts will be paying taxes and will bring in a lot of revenue for the city.
You may be wondering how big a resort needs to be. This depends on the kind of resort that's being built. Lets take a look at some resorts to see just how much acreage will be needed:
* A standard golf course will require 100 to 200 acres. This is for a championship course, but smaller courses will need around 70 acres. If you have a hotel and other amenities, youll need at least 100 acres.
* Ski resorts require a lot of land. The biggest ski resort in the country spans 7,300 acres.
* Beach resorts are usually much smaller. The Sheraton Sand Key Resort in Clearwater Beach, Florida is on 13 acres of beach.
When a massive piece of land is needed, such as those for a ski resort, this will usually be through a massive deal that takes place. One of the biggest resorts actually cost $182 million in land costs alone. This did not include building the resort.
Its not that land is necessarily scarce, but prime real estate land is scarce. Resorts need to be in prime locations to be successful. Developers know this, and they will need to use the money that they have to purchase the land from multiple owners in most cases.
And, if the land for sale is not optimal for their needs, they can bring in professionals that will level the land, remove trees, fix drainage issues and conduct other necessities simply because they have the funds to do so.
Now, anyone who is buying land with the intent of selling it needs to know that resorts will want multiple acres of land at one time. If you have a 50 acre lot, you may get lucky and find a resort developer that needs land in your area. But, if you only have a half an acre lot, youll have much less leverage if a developer comes knocking at your door.