I wanted to share the outline of an idea for an investment / side hustle I shared with a friend in January of this year. The opportunity has only gotten more attractive in a post-COVID world, given many people’s desire to get out of locked-down cities and into nature.
5 years ago it’s something I would have run at pretty hard. Now, I unfortunately have too much on my plate but still find the concept is interesting (and would invest in pretty much anyone doing a similar play).
I believe there’s a big opportunity to buy land and set up tiny homes and tent glamping sites. Then, list them on the crop of well-funded sites that are catering to customers who want to get outdoors:
- Outdoorsy (just raised $50mm for RV and trailer rentals)
- Collective Retreats (raised $10mm+)
- Autocamp ($117mm+ in funding)
- Getaway (raised $38mm+)
- Tentrr (raised $13mm)
- Hipcamp (raised $40mm+)
- Airbnb (which has a tremendous number of tiny home + tent options on the platform)
These “Airbnb for camping” platforms are exploding, they’re well-funded, they’re still super early (ie you probably haven’t used them yet). Yet they’re generating material revenue without experienced operators or any sort of platform-focused franchise I can see.
I see an opportunity to buy land within an hour of a city, create an exceptional experience for people looking to book on these sites (i.e. have streamlined check-in, amenities, include telescopes, etc), and get a ton of travelers into campsites we set up and manage.
As far as I can tell, empty land outside cities doesn’t yet have these potential cashflow streams priced into their value. Which means you could buy a decent bit of acreage on the cheap and cover the mortgage with just a few bookings per month.
There are also a few other things that make this idea attractive:
- CapEx is super low – you could buy a top of the line tent for $5k, and pay for it in something like 30 nights. Tiny homes are $25-50k and are going for $200+ a night, which is an incredible payback period.
- Maintenance costs are much lower than Airbnb, as are amenities + check-in work required are lower.
- You could buy land that’s trading at an agriculture multiple (ie a small family farm), put it on our platform and sell it at a hospitality multiple.
- ZONING! There are almost NO zoning headaches since it’s camping and private land. This is a HUGE advantage relative to dealing with short-term rentals in cities.
- Lots of opportunity to charge for value-added services (food, transit, RVs, etc).
All in all, I feel pretty darn confident that you could buy a small plot of land, finance 80% of it (via a standard mortgage), and with just a little bit of work on one of these new platforms, have an asset that kicks off monthly cashflow for years to come.11