Buying Your Own Hunting or Fishing Lodge in Alaska

John Herrity fell in love with Alaska back in the summer of ‘91 when he convinced his college roommate to spend a season on a fishing boat. He fell in love with the place. Four years later, he ended up buying the same fishing operation where his Alaskan adventure began. We asked him to share valuable tips with us for those interested in buying a lodge in Alaska. John is now spending his 34th summer in a row up in the Land of the Midnight Sun. On a recent summer afternoon, that’s exactly where we found him.

“I’m sitting on my boat up the Naknek River in the Bristol Bay region of Western Alaska – the northern part of the Bering Sea.” He’s up there to fish, first. But he also represents Hayden Outdoors in the northernmost part of the U.S., helping clients buy and sell lodges in Alaska. “Last year, I listed King Salmon Lodge, about five miles up river from where I’m sitting right now.” 

The Alaska recreational real estate specialist, who calls the great state his second home, can be found in Colorado and South Dakota the rest of the year selling lodges, ranches and farms. He provided some insight into the unique research and acquisition process of buying and selling some of the best fishing and hunting lodges in the last frontier.

Benefits of Owning a Lodge in Alaska

To John and others who have spent time hunting and fishing the Alaskan wilderness, the benefits of owning a small part of the magic are clear, but to clarify, it’s really about accessing places very few others do. “I really like being off the road system.” Not off the grid, but off the road system. John clarified, “Kodiak is off the road system, meaning you have to fly in there, but there’s still a Walmart, Safeway, and other amenities. I’ve found that in Alaska in general, the roads are jam packed on the weekend, so it’s special to get off of it. You get to see places few others have seen if those places are harder to get to.” 

The access to pristine wilderness and abundant wildlife is certainly one of the major benefits of owning an Alaskan lodge. But there’s also the potential for a personalized outdoor experience. From rustic to five-star you can cater the lodge experience to the needs and wants of your clientele, offering visitors a trip of a lifetime they simply can’t get anywhere else. 

Financially, lodges present unique investment opportunities in eco-tourism and hospitality. According to John, guests typically expect good housekeeping, good food, and good guide service, with emphasis on the latter two. Having ownership in such a premier investment, which can double as a corporate retreat, lets you direct the escape you and your visitors enjoy while living off the road system. 

Factors to Consider Before Buying

The biggest factor to consider before buying your Alaskan hunting or fishing lodge is its location. Obviously, it needs to be in the midst of world-class fishing and/or hunting grounds. Accessibility to the experience you’re offering is essential. “I know of lodges on the shore that do both ocean and river fishing. They fish salmon in the rivers in the morning. The other part of the day, they’re out in the ocean trying to catch halibut, lingcod, things like that.” 

Legal considerations also play a major role. There are, of course, hunting and fishing permits. In Alaska, John notes that these have become a buying-and-selling game all their own, requiring specialists and brokers. A “six-pack” fishing license is currently going for about $110,000. John provides some additional guidelines to consider, including:

• Adhering to local municipal codes for cooking
• Fishing boat captains must be licensed per Coast Guard regulations
• National or state park access permits

In the course of a potential sale, don’t overlook infrastructure. This includes utilities, maintenance, and amenities. “The more remote lodges will have aircraft and float planes to get guests and supplies in and out – or at least have a good relationship with a float plane service.” Cabins, boats, storage structures, and the main lodge all require consistent maintenance. 

Costs Involved

John has managed enough lodge sales to know they require a specific approach and come with many potential built-in costs. “Lodges are intricate sales; there are a lot of components. The first thing I do from a broker standpoint is assess if it’s an asset sale or a real estate sale.” By this, he means it’s not just a beautiful shore-line lodge you’re buying. It’s also the client list, website, intellectual collateral, aircraft, cabins, boats, access permits, fishing permits, and captain licenses.

There’s the initial purchase price versus the ongoing operational expenses, including the maintenance and upkeep costs for remote properties. Buyers and sellers also need to consider the tax implications of such a major transaction. John helps clients with 1031 exchanges. An IRS exception 1031 exchange allows real estate investors to sell one investment property and buy another without paying capital gains taxes. John notes that he works with the premier 1031 agency in the country, located in Denver. 

Finding the Right Property

Owning a fishing or hunting lodge is a special way of life, so it’s important to find the right fit if you’re in the market – or to work with an experienced recreational real estate agent if you want to sell. 

You can start by researching online listings or auctions, but the best way to find the right fit is to develop a relationship with an agent who specializes in Alaska lodge real estate sales. John has even known potential buyers who have gone incognito, spending their vacation at a lodge in which they’re interested as a client to size up the experience. 

If you’re in the market, talk with your agent about leasehold versus freehold options. Leases allow owners to own the lodge but not the land on which it’s built, which is leased for a set period of time, while freehold means the owner owns both the land and the lodge. 

Operating Your Lodge

As John mentioned, good housekeeping, good food, and a good guide are what typically make the lodge experience. If you’re looking to buy a lodge, it’s important to understand the local employment market and current lodge staff. 

“Staff are a hidden asset in a lodge sale. Most lodge sellers are very concerned about their clientele and staff when they list a property, and most lodges don’t miss a beat if this aspect of the sale is handled properly.” Transitioning a long-time manager from one owner to the next can help with a seamless guest experience and ensure the new owner does not lose talent. 

You will also need to consider seasonal versus year-round operation challenges. Some lodges stay open all four seasons. Others maximize the summer months and then close up for the winter. Potential buyers need to account for this ebb and flow of income and expenses. 

Another possibly overlooked expense of running an Alskan lodge is marketing and attracting clientele. In the winter, many lodge owners or managers will spend time at tradeshows trying to solicit summer business. 

To get a better handle on the costs of running a lodge, John recommends looking at the history of the lodge. “Most importantly, review bookings, including future bookings, and financials. This can require a forensic accountant. Lodges – especially ones with aircraft and boats – can have a lot of depreciation, which can skew the financial overview of the property.” 

Legal and Regulatory Challenges

Given Alaskan lodges’ proximity to vast wild spaces, it’s key to understand local, regional, and statewide zoning laws and land use regulations. Make sure you hire guides who have a firm grasp on hunting and fishing quotas, and consider incorporating wildlife conservation into your business philosophy. Navigating federal versus state regulations is also an essential part of running a successful, above-board hunting or fishing lodge. 

Community and Cultural Integration

New lodge owners also need to be mindful of the surrounding communities. This is particularly important for lodges that rely on local populations for their workforce and guide services. Building relationships with these communities helps support local businesses and economies and respect indigenous cultures and traditions. 

Conclusion

Owning an Alaskan hunting or fishing lodge is a special way of life. Many have been a part of the local history for decades or longer. They have a storied history that is often a part of the larger fabric of the Alaskan lifestyle. “I want to list properties that I want to own myself and work with people I can be friends with for a long time.” John has become an established part of both life in Kodiak and buying and selling lodge properties in Alaska. He knows the fish, river systems, moose, caribou, and bear just as well as he knows CPAs, attorneys, and lenders who specialize in lodge sales. “When you’re buying a lodge, in most cases, you’re buying yourself a job. There’s a great return, but there’s also a lot to it. It’s not a hands-off investment.”

Such was the case of the King Salmon Lodge John brokered. “We had multiple offers so we asked for the highest and the best offer because ultimately, the highest offer might not be the one the seller takes.” And that was the case with the King Salmon. The seller opted for an offer that didn’t bring in the most money, but it did provide the most value for the property going forward. “He went with the offer he felt would be the best fit for the lodge and the community.” 

It’s why it’s so important to work with someone who knows the ins and outs of it. Someone who understands the Alaskan way of life and what it means to people who visit the lodge and who live in the area. Someone who’s most likely on his boat right about now. When we ask if we can reach out with follow-up questions, John says sure. “I might not get back to you right away though; gonna start fishing in the next day or two.”