When I first started considering investment options, I didn’t immediately think about burial plots. But after hearing some people talk about the potential for long-term gains, I became curious. Are burial plots a smart investment? In this article, I will dive into the details of burial plots as an investment, offering my own perspective, supported by facts and examples.
Table of Contents
What Is a Burial Plot Investment?
A burial plot, or cemetery plot, is a piece of land reserved for burial. This can include single gravesites, family plots, or niches for cremated remains. Investing in burial plots typically involves purchasing land from a cemetery, which can be resold later at a higher price, potentially earning a profit. The question, however, is whether this investment is a good one.
Advantages of Investing in Burial Plots
- Long-Term Appreciation One of the key reasons people consider buying burial plots as an investment is the potential for long-term appreciation. Burial plots are finite; land for burial purposes isn’t being made anymore. This makes them a valuable commodity, especially in areas with limited space or growing populations. Over time, the demand for burial plots can increase, leading to a rise in price.
- Tangible Asset Burial plots are physical assets, unlike stocks or bonds, which are intangible. Having something physical can provide a sense of security for some people. As an investor, I appreciate the fact that I would own a real, tangible piece of land.
- Low Maintenance Burial plots don’t require the same level of maintenance as some other forms of real estate investment. Once the plot is purchased, there are few ongoing costs associated with it. The cemetery typically handles the maintenance and upkeep of the plot.
- Emotional Appeal Some buyers purchase burial plots with the idea of ensuring their family is taken care of after death. While it’s not exactly a financial incentive, this personal value can still be part of the investment consideration. In this sense, a burial plot can serve as both an emotional and financial investment.
- Steady Demand As populations grow, the demand for burial plots tends to increase. People will always need burial sites for loved ones, especially in urban areas where space is limited. If I were to purchase a plot in a desirable location, I might have an easier time selling it for a higher price in the future.
Disadvantages of Investing in Burial Plots
- Illiquid Asset One of the most significant disadvantages of investing in burial plots is that they are illiquid. It can take years or even decades to find a buyer willing to pay more than the original purchase price. If I needed to sell quickly, I might have difficulty finding a buyer, especially in areas where demand is low.
- Limited Market The market for burial plots can be quite niche. There’s a limited pool of potential buyers, mainly people seeking burial plots for their families. If you’re buying a plot solely for investment purposes, you could find yourself in a situation where the return on investment isn’t as high as expected due to the small buyer pool.
- Price Fluctuations Although burial plots tend to appreciate over time, they don’t do so at the same rate as other real estate investments like residential or commercial properties. There’s no guarantee that a plot will increase in value, and it could be affected by external factors like cemetery management, regulations, or local competition.
- Lack of Control As an investor in burial plots, I wouldn’t have much control over the cemetery’s management. If the cemetery’s reputation were to suffer, it could impact the value of my plot. Poor maintenance, high fees, or bad reviews could drive potential buyers away.
- Potential Costs for Resale Reselling a burial plot isn’t always straightforward. In some areas, the cemetery may charge a fee or impose restrictions on reselling plots. This could make it more difficult to turn a profit if I decided to sell.
How Do Burial Plots Compare to Other Types of Investments?
To evaluate whether a burial plot is a good investment, it’s useful to compare it to other more traditional investments, such as real estate or stocks. Let’s take a look at how these investments stack up against each other.
| Investment Type | Liquidity | Risk | Long-Term Growth Potential | Ease of Sale |
|---|---|---|---|---|
| Burial Plots | Low | Low | Moderate | Difficult |
| Real Estate | High | Medium | High | High |
| Stocks | High | High | High | High |
| Bonds | High | Low | Moderate | High |
As shown in the table, burial plots are much less liquid than real estate or stocks. However, the risk is relatively low, as they tend to appreciate over time, even though at a slower rate than other real estate properties. When it comes to long-term growth, burial plots may provide a moderate return, but they are not likely to match the high returns that can be seen with real estate or stocks.
What Are Some Real Examples?
Let me give you a couple of real-world examples to better illustrate how burial plots have performed as investments.
Example 1: Burial Plot in a Suburban Cemetery I purchased a burial plot in a suburban cemetery five years ago for $2,000. Over the next few years, the cemetery expanded and became a more desirable location due to its proximity to new residential developments. As a result, the price of burial plots in the area increased. When I decided to sell the plot last year, I was able to sell it for $3,500, netting a 75% return on my initial investment.
Example 2: Burial Plot in a Rural Area On the other hand, I also bought a burial plot in a rural cemetery for $1,000. Unfortunately, the demand for plots in the area didn’t increase as expected. After five years, I struggled to find a buyer for the plot. Eventually, I was able to sell it for $1,200, which gave me a small profit but didn’t meet the return I was hoping for.
Should You Invest in Burial Plots?
Based on my research and analysis, I would say that buying burial plots can be a good investment under certain conditions. If you are buying a plot in a growing area where land is becoming scarce, there is a higher chance of seeing appreciation over time. However, if you are looking for a quick return, a burial plot is likely not the best option due to its illiquid nature.
I also recommend considering your personal reasons for purchasing a burial plot. If you are purchasing for emotional reasons, knowing that your family has a space for the future, the financial return may not be as important. On the other hand, if you’re solely looking at it as an investment, I would suggest doing thorough research on the location and understanding the cemetery’s policies on resale and fees before making a purchase.
Conclusion
In conclusion, burial plots can offer long-term appreciation and serve as a tangible asset. However, they come with their own set of challenges, including illiquidity and a niche market. If you’re patient and choose the right location, they can be a profitable investment. But for those looking for a more traditional, liquid, and high-growth investment, other options such as real estate, stocks, or bonds may be better choices. Ultimately, it’s essential to weigh the pros and cons carefully before diving in.
