How to Invest in Cemetery Plots for Profit
Tuesday, October 11, 2011
Detailed Market Research: Focus on the cemeteries that your research shows sell plots pre-need and allow reselling of plots. We will call these our target cemeteries. Do the following additional research:a) Obtain a plot plan map of each target cemeteryb) Obtain a price list for each target cemeteryc) Ask the cemetery manager about buying plots on the secondary market.d) Determine what is required to transfer a plot and get copies of the transfer forms for each target cemetery.Organize the info on all the remaining target area cemeteries and even expand on it by answering step 1 questions so you can understand the competition for your investments.On the Ground Research: Walk each target cemetery with the plot plan and the price list. Your goal is to understand what the market value of each section is. Views, trees, fountains or other features and density of graves may all be factors in price. Walk through a few times (you need exercise anyway) until you really understand each target cemetery.Like all real estate, prices will depend on location, location and location. Premium locations sell for premium dollars. Since the resident is dead and can’t enjoy the view, it might be hard to understand why location is so key, but it is.Finding Inventory: Find people who have bought one or more plots, but do not want them anymore. These are classic “don’t wanters” in real estate speak. The reasons people might want to sell a cemetery plot parallel traditional real estate and include:a) Divorce – would you want to rest next to your ex for eternity?b) Remarriage – it seemed like a good idea to be buried with my former husband but after 10 years with new husband that plan fell awayc) Moved out of area – makes no sense to ship a body back to the old townd) Financial distress – some people could use the cash to live now rather then tie up cash in dirt to be buried in.e) Desire to be cremated instead.You can find prospective sellers by:a) advertising on free sites like craigslist (use the target cemetery names to get found much easier)b) networking with divorce lawyers, pastors, moving companies, and especially the cemetery managementc) watching for cemetery plot for sale ads in the paper or online classified spotsd) accessing one of the cemetery plot resale web sites
Make the Deal and help out the sellerBuying Inventory: Buy inventory once you really understand market prices, have the maps and on the ground knowledge of your targets, and have the transfer contract examples ready to go.Talk to prospective sellers about their desires. Be genuinely sympathetic especially since the plot seller might be financially distressed or emotional about the plot.Offer a fair price, considering that you are buying an asset with limited liquidity. 33% to 50% of the price similar plots sell for at the cemetery office should be about right. If required, explain it may take time to find a buyer and that you have to compete with the easy answer of buying direct from the cemetery office.
Understand why the client wants the plotIdentifying and Understanding the Client: Identify and understand your clients. Cemetery plots are unlike most products. No one walks up saying “I need to go buy a cemetery plot today” The plots you buy will be ones that were bought through a visit from a salesperson offering pre-need insurance packages, or were bought as companions to a plot bought at need.Your market is people who need a plot to bury a loved one who just died. These people are like distressed over the death and have an urgent need your plots can full.Marketing Inventory: Find buyers for your inventory. They say you should buy real estate by the acre and sell it by the foot. selling in 6 foot sections is taking that advice to the extreme.This is the tricky part. Some ways to find buyers.a) Online or print classified ads. If you are really going to do this business you need to establish a presence in the same spot in the paper. People will see the ad and do nothing, but when they need a plot they may just grab the paper and call you.b) By establishing relationships with funeral directors. The funeral director could be you number one source of leads. Give cooperative directors some business cards or a little brochure to hand out. You might even be able to create a marketing partnership where a funeral director will sell plots on your behalf.c) Look at what the cemeteries are doing for marketing, and go one better. If you have multiple cemeteries in your inventory, advertise that you offer choice in location.d) Join online databases to drive traffic and buyers your way.e) Set up an attractive website promoting the cemeteries you are focused on and offering plots for sale at a savings over “going direct”.f) Consider offering related services like memorial stones, urns and plaques.Enjoy Short and Long Term Profits: Enjoy the rewards of your investments. If you buy up a lot of well located plots and you establish an effective marketing program, you will have good cash flow as you turn over plots to families in need. You should be able to double your money or better.Longer term, your unsold inventory will appreciate in value, maybe a lot, as the cemeteries raise their prices and as the desirable areas you bought in sell out and fill up.Check local and state laws carefully. In some places it is illegal for persons in the cemetery business to resell lots. This consumer protection can work in your favor because it limits the cemeteries from buying back plots and competing with you for supply.Buy carefully and be prepared to wait for your clientsPerhaps you can buy a section of a cemetery at a big discount, then improve it with plants and other features to increase the plot value?Increasing numbers of cremations are reducing the demand for cemetery plots. Be aware of this trend and see if you can diversify into urn wall spots.Careful that the perpetual care fund is large enough to care for the cemetery. You are looking for a worry free real estate asset where someone else cuts the grass.Tagged as: investing
Would you pay $4.6 million to be buried above Marilyn Monroe? It’s available and the price is all about location. (see Resources section below)
Cemetery Plots are a unique class of real estate to invest in. The price is low compared to traditional real estate investments and the profits can be huge for you can easily double or triple your money over and over.
Yet by selling at a discount to the cemetery manager price, you will also be helping out families in need save money.
You can get started with just a few hundred dollars and some research time.
(This article is copyrighted by its original author. Short excerpts with links are welcomed, but please do not repost the article itself. Thanks.)
Difficulty: Moderately ChallengingResearch time to understand your marketA little free cashAdsBasic Market Research: Look carefully at the market for cemetery plots in your local area. You need to be able to answer these questions before investing a dime:a) What local cemeteries exist?c) Who controls the plot sales in each local cemetery?d) Can a person buy plots pre-need?e) Can a person resell the plots?f) Are there any restrictions on who is buried in each cemetery or section of cemetery – military, religious, fraternity or similar?When you can answer these questions you can move on to detailed market research.Detailed Market Research: Focus on the cemeteries that your research shows sell plots pre-need and allow reselling of plots. We will call these our target cemeteries. Do the following additional research:a) Obtain a plot plan map of each target cemeteryb) Obtain a price list for each target cemeteryc) Ask the cemetery manager about buying plots on the secondary market.d) Determine what is required to transfer a plot and get copies of the transfer forms for each target cemetery.Organize the info on all the remaining target area cemeteries and even expand on it by answering step 1 questions so you can understand the competition for your investments.On the Ground Research: Walk each target cemetery with the plot plan and the price list. Your goal is to understand what the market value of each section is. Views, trees, fountains or other features and density of graves may all be factors in price. Walk through a few times (you need exercise anyway) until you really understand each target cemetery.Like all real estate, prices will depend on location, location and location. Premium locations sell for premium dollars. Since the resident is dead and can’t enjoy the view, it might be hard to understand why location is so key, but it is.Finding Inventory: Find people who have bought one or more plots, but do not want them anymore. These are classic “don’t wanters” in real estate speak. The reasons people might want to sell a cemetery plot parallel traditional real estate and include:a) Divorce – would you want to rest next to your ex for eternity?b) Remarriage – it seemed like a good idea to be buried with my former husband but after 10 years with new husband that plan fell awayc) Moved out of area – makes no sense to ship a body back to the old townd) Financial distress – some people could use the cash to live now rather then tie up cash in dirt to be buried in.e) Desire to be cremated instead.You can find prospective sellers by:a) advertising on free sites like craigslist (use the target cemetery names to get found much easier)b) networking with divorce lawyers, pastors, moving companies, and especially the cemetery managementc) watching for cemetery plot for sale ads in the paper or online classified spotsd) accessing one of the cemetery plot resale web sitesMake the Deal and help out the sellerBuying Inventory: Buy inventory once you really understand market prices, have the maps and on the ground knowledge of your targets, and have the transfer contract examples ready to go.Talk to prospective sellers about their desires. Be genuinely sympathetic especially since the plot seller might be financially distressed or emotional about the plot.Offer a fair price, considering that you are buying an asset with limited liquidity. 33% to 50% of the price similar plots sell for at the cemetery office should be about right. If required, explain it may take time to find a buyer and that you have to compete with the easy answer of buying direct from the cemetery office.Understand why the client wants the plotIdentifying and Understanding the Client: Identify and understand your clients. Cemetery plots are unlike most products. No one walks up saying “I need to go buy a cemetery plot today” The plots you buy will be ones that were bought through a visit from a salesperson offering pre-need insurance packages, or were bought as companions to a plot bought at need.Your market is people who need a plot to bury a loved one who just died. These people are like distressed over the death and have an urgent need your plots can full.Marketing Inventory: Find buyers for your inventory. They say you should buy real estate by the acre and sell it by the foot. selling in 6 foot sections is taking that advice to the extreme.This is the tricky part. Some ways to find buyers.a) Online or print classified ads. If you are really going to do this business you need to establish a presence in the same spot in the paper. People will see the ad and do nothing, but when they need a plot they may just grab the paper and call you.b) By establishing relationships with funeral directors. The funeral director could be you number one source of leads. Give cooperative directors some business cards or a little brochure to hand out. You might even be able to create a marketing partnership where a funeral director will sell plots on your behalf.c) Look at what the cemeteries are doing for marketing, and go one better. If you have multiple cemeteries in your inventory, advertise that you offer choice in location.d) Join online databases to drive traffic and buyers your way.e) Set up an attractive website promoting the cemeteries you are focused on and offering plots for sale at a savings over “going direct”.f) Consider offering related services like memorial stones, urns and plaques.Enjoy Short and Long Term Profits: Enjoy the rewards of your investments. If you buy up a lot of well located plots and you establish an effective marketing program, you will have good cash flow as you turn over plots to families in need. You should be able to double your money or better.Longer term, your unsold inventory will appreciate in value, maybe a lot, as the cemeteries raise their prices and as the desirable areas you bought in sell out and fill up.Check local and state laws carefully. In some places it is illegal for persons in the cemetery business to resell lots. This consumer protection can work in your favor because it limits the cemeteries from buying back plots and competing with you for supply.Buy carefully and be prepared to wait for your clientsPerhaps you can buy a section of a cemetery at a big discount, then improve it with plants and other features to increase the plot value?Increasing numbers of cremations are reducing the demand for cemetery plots. Be aware of this trend and see if you can diversify into urn wall spots.Careful that the perpetual care fund is large enough to care for the cemetery. You are looking for a worry free real estate asset where someone else cuts the grass.Tagged as: investing
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