Business Aspect Of Cemeteries???
Does anyone have any experience with private Cemeterys??? How do they manage the long term maintenance from a financial perspective? How profitable can they be? What zoning issues do you encounter?
It seems like you get a lot of money up front, but have to manage it for years without receiving any. Is the capital invested to create money for upkeep?
It seems like this would be a relativly easy thing to do. Buy land, plant grass, survey in the plots, sell 5'X10' pieces of grass for $1000 each, keep the grass mowed. Granted, I'm sure that there is more to it than that, but it doesn't look like rocket science.
Anyone have experiences or stories to tell about investing in Cemeteries???
Hibby,
I don't have any direct experience and only a little data but I will give you what I know.
Cemetaries are pretty highly regulated in most states. Some part of that $1,000 has to go into a fund to maintain the property for the long haul. The individual sales transactions are not treated as real estate (no titles, etc). There are companies that do this sort of thing and I have, on one or two occassions, talked to people who work for them but they do not seem to think like real estate guys.
I guess what I'm saying is that the rules of the game are different. Its kinda like thinking about doing deals in Mexico or Brazil. Yes, it is possible, but the regulatory enviornment is so different that most of what you know isn't true any more.
Don't know if thats helpful but good luck.[ Edited by commercialking on Date 04/19/2004 ]
Having had to bury 2 family members in the last year I think your statement about colecting money upfront and then nothing later i not exactly true.... They find ways to get more money out of you at the time of death even if all has been paid for by the person in the past......I would imagine as the bby boomers start falling that business will only continue to be steady....... there is a VERY high mark up on everything they sale as well.....along with the cost to use their facility for services etc....Not a business that I would personally want to get into but I can see where there is a LOT of money in it and a steady client base
Try checking out the International Cemetery and Funeral Association, at
http://www.icfa.org
I don't know much about doing this as an investment, but at least this is a place to get some info.
HTH
You can bury approximately 850 people per acre and at $3,000.00-$5,000.00 per plot then you pay $1,000.00 to open/close the grave. You set aside 50% of gross sale in a perpetual care fund which pays operating expenses. Most people buy cemetery plots many years before they are needed.
Those numbers look VERY profitable! What other costs are involved besides landscaping?
[ Edited by jcattin on Date 01/05/2010 ]
I would imagine that you'd have to put a fair amount of money into marketing the plots upfront so that you could sell a number of them off the bat to create your operating capital.
How would you set up your "maintenance endowment" to minimize the tax implications of it? Any thoughts?