Glamping and How Some Members Cash Flow with it (LA 1591)
Glamping and How Some Members Cash Flow with it (LA 1591)
Transcript:
Steven J Butala:
Steve and Jill here.
Jill DeWit:
Howdy.
Steven J Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill DeWit:
And I’m Jill DeWit broadcasting from the Valley Of The Sun.
Steven J Butala:
Today Jill and I talk about glamping and how some of our members are cash flowing with it. This is a huge mile long topic, and rightfully so in Discord, and everybody chimed in. I can tell when it’s a good topic in Discord, because people that are just lurking, they start piping in like, oh yeah, this is there’s people in there. And so this is why I joined Land Academy. And then they’re giving us as an example that five miles down the road this is what this person is doing in their unused cow pasture.
Jill DeWit:
Do you think what we do is a version of glamping?
Steven J Butala:
No, not at all. Oh yeah. I think it can be, but I’ll explain it.
Jill DeWit:
Okay, good.
Steven J Butala:
Before we get into it. Let’s take a question posted by one of our members on the landinvestors.com online community. It’s free and don’t forget to subscribe on the Land Academy YouTube channel and comment on the shows that you like.
Jill DeWit:
Erin wrote, “Airbnb, VRBO, glamping. Anyone here ever released their land to Airbnb campsite operators getting $135 a night for a tent with a composting toilet and an outdoor shower? I’ve been watching some YouTube videos about people buying or leasing lands near natural attractions for these style campsites. I have some lots that could be used for this. Any thoughts?”
Jill DeWit:
Oh, sorry. Nelly wrote, “I’ve been looking at these for a while. $40,000 canvas tents. Yikes. You can rent out campsites on your property with Hip Camp. Also, been thinking about doing that on a three acre lot that I live on, cleaning up an area near the pond to run out to campers. Maybe do a Deliverance experience for Halloween.” That’s kind of funny.
Steven J Butala:
I have to tell you, Nelly, if you’ve ever seen Deliverance, nobody’s going to pay for a Deliverance experience. Most of you who are my age know exactly what I’m talking about and you’re laughing in your cereal right now.
Jill DeWit:
I don’t.
Steven J Butala:
I know.
Jill DeWit:
I have not seen Deliverance deliberately.
Steven J Butala:
Yeah. Deliverance is not for you.
Jill DeWit:
That’s what I [crosstalk 00:02:13].
Steven J Butala:
There’s no singing and dancing or anything like that.
Jill DeWit:
No happy ending. Like who’s still alive, basically, at the end.
Steven J Butala:
So I put this question in here. It’s not really not even a question. I mean, I think the real question is, has anybody thought about this? And everybody responded and said, not only have I thought about it, it’s happening down the street and all of that. So because it is a topic, we’ll just get right into it.
Jill DeWit:
Okay.
Steven J Butala:
Today’s topic glamping how some of our members are cash flowing with it. This is the meat of the show.
Steven J Butala:
Glamping is the combination of two words, glamor and camping. So, it really depends on who you talk to and where they’re coming from in life. But there are some people in, I used to be one of these people, I think Jill did too, were look, I just want to stay in a five-star hotel and order some room service and jump in the pool. [crosstalk 00:03:01] any part of camping.
Jill DeWit:
I still have those days. Like today.
Steven J Butala:
And so I’ve slept, probably, unless there’s grandchildren in my distant future, this way distant future, I’ve spent my last night in a tent. You know, this is not what I’m talking about. I’m not talking about pitching a tent, like a soldier and an eating an MRE and downing a half pint of whiskey and go to sleep. That’s not what I mean. I’m talking about glamping, which is these… I mean, picture of a fully produced movie from the eighties or nineties where they’re in some desert on an archeological dig and they’ve got this amazing tent with the desks in it and servants. And that’s what glamping is now in this country. It’s dropping these really cool pre-made structures with beds in them and mosquito nets and refrigerators and all that kind of stuff. It’s glamor camping. And it’s a thing. And I think, personally, it’s here to stay. I haven’t done it yet, but I want to do it.
Jill DeWit:
Is it always tent related or can it be RV related?
Steven J Butala:
Jill keeps asking me, do we glamp? Do we glamp? We have a brand new pretty swanky RV. A little one, but it’s swanky. I’ve heard it described that way, but I don’t think so.
Jill DeWit:
Okay. So I don’t think [crosstalk 00:04:22] I think camping is really camping. Like you’re not, you don’t have a toilet.
Steven J Butala:
Yeah. This show… Well, a compost toilet.
Jill DeWit:
Okay, that kind.
Steven J Butala:
Or an outhouse. This episode is about buying a piece of land, or maybe land you’re already owned, like the person in the question, and clearing it, putting some of these tents up, maybe putting somebody in charge and charging 130, $150 a night for the experience. Hopefully, it’s on a river or there’s fishing or, or ATVing or kayaking or some something active to do to attract people there. Or it’s near some type of monument. So, people go on in this string and talk about… This stuff’s all over Yosemite and Idaho and everywhere.
Jill DeWit:
Tell me when I can weigh in on my ideas on this.
Steven J Butala:
And then I’m going to get to the math and why the math really works in this. Go ahead.
Jill DeWit:
So here’s my initial thoughts. It is a cool idea. I would totally use this in my sales way of selling property. This could be your beautiful dream glamping environment slash however, if I took this on, I would think, now I’m a landlord. Now I run a BNB and I don’t really want to run a BNB.
Steven J Butala:
Yeah. Somebody else in the string said, “Just lease the land to an Airbnb operator. Let them do it all.”
Jill DeWit:
That would be cool.
Steven J Butala:
So from a number standpoint, you can’t beat this, you know, it’s the new bed and breakfast. Bed and breakfasts suck, I think. It’s the old crickety floors. There’s six other couples in the whole place.
Jill DeWit:
There’s doilies.
Steven J Butala:
There’s some old ladies [crosstalk 00:05:55] making breakfast and breakfast is terrible. Everybody knows what everybody else is doing at all hours of the night.
Jill DeWit:
Scones and tea.
Steven J Butala:
Use your imagination there. And so it’s just… And there’s one bathroom for eight people in the whole thing. There’s nothing glamorous about that at all. Some people just thinks it’s quaint. And depending on who you talk to, I’ve slept in my last BNB, grandchildren or not, I’ll tell you that. [crosstalk 00:06:18].
Jill DeWit:
There seems to be a lot of directives here. Golly.
Steven J Butala:
I’m talking to Bill… To Bill. I’m talking to Jill partially here too, not just to the camera.
Jill DeWit:
Yeah I know. Okay.
Steven J Butala:
When you break down the cost structure of both of those scenarios, I think the big hotel, crazy expensive to operate and to build an Airbnb, very expensive to operate and certainly expensive to build and maintain. And then you take a vacant piece of land, put a bunch of tents on it. Now, albeit nice tents, and put up a great website. You know, that’s what the millennials want. They want an experience and they’re not afraid to pay.
Steven J Butala:
So, assume you’re charging 135 to $150 a night for those three cost options, number one’s a hotel, number two is a bed and breakfast, and number three is a tent with a compost toilet and a kayak? You can’t beat the third as an operator. And if you’ve got a good piece of property… Jill and I have several right now where this would work, gets me thinking, you know, there’s no better way to buy a property for 25 30, maybe $50,000 at the tip top, 50 at the top, and then lease it out, master lease it out to an Airbnb operator for let’s say, 5,000 a month or some number like that.
Steven J Butala:
I buy a piece of property for $25,000 and lease it out for $5,000 a month. That cap rate’s insane, insanely positive. So, I’m all for this. But what Jill said, I don’t want to be a landlord. This is a land lease deal for us, not an operator deal.
Jill DeWit:
What were the majority of the comments people were making? They were like, I want to do this?
Steven J Butala:
Well, it was everything from what I just said from a land lease perspective, to we’re already doing this. Like somebody said, in a pasture that we’re not using on the farm that we live in. Now, these are all Land Academy members. That, and then people are talking about the experiences that they had staying in these places, and they’re all positive. I would do it right now. I wouldn’t actually within reason, look at the price tag. If it was located near fly fishing, let’s say, I’d book it for us for three days, probably bring it our RV there. If it sucked, we would just leave, like we’ve done in the past, and say, you know what? We’re good. We don’t want to refund this sucks. See ya.
Jill DeWit:
Not to be Debbie Downer. But, what was the general consensus about zoning? Did that even come up?
Steven J Butala:
Yes. So it came up and somebody from Oregon said, “I tried to do this, and the state of Oregon wants no part of this.” And then somebody from northern Arizona said, “I am doing this and the state of Arizona is very excited for me.”
Jill DeWit:
There you go. Hopefully, they’ll catch on. I wonder if they see it as a way of… It’s a step closer to mobiles or… I wonder if the states that don’t like it or the counties that don’t like it are afraid of it’s a step towards tiny houses or mobiles, which they don’t want. Which is dumb, by the way.
Steven J Butala:
I agree with you completely.
Jill DeWit:
We need more affordable living everywhere.
Steven J Butala:
Yeah. I don’t think that this falls into any category yet. Very much like building a shed, putting a shed on your property, unless you’re in an HOA, in all the places that I’ve looked there’s no regs on it. You can put a shed up. Can you live in the shed? Probably not, according to the regulations. Does anybody know you’re living there? Probably not.
Jill DeWit:
Yeah. It depends on how big your property is.
Steven J Butala:
Can you park RV on most places and live in there? Hell no. That’s all caught up. The regulators have caught up with it. People abused it. And now there’s new rules. Like everything… Yesterday, we talked about everything changes all the time or two days ago, whatever it was. This whole thing is brand new. It’s unregulated. So I think you could set something up. They don’t know what to do. When you call planning and zoning and say, hey, can I get a camping permit, they don’t know what to do. There’s nothing on their computer screen to click.
Jill DeWit:
You know what’s great about that for people like me? Because I’m a let’s ask for forgiveness, not permission.
Steven J Butala:
Me, too. I am, too.
Jill DeWit:
I’m like… I’d hang up and go, green light. Nobody could say I can’t do it.
Steven J Butala:
[crosstalk 00:10:39] in Crown King, Arizona for a lot of years, many, many years. And, people would just camp anywhere and happily. And it was a beautiful situation.
Jill DeWit:
I don’t care.
Steven J Butala:
I don’t care, either. I think it’s great [crosstalk 00:10:49].
Jill DeWit:
… Let them have it…
Steven J Butala:
Pitch a tent in my driveway.
Jill DeWit:
Let’s think about this, everyone. If you’ve got twenty acres or more, who really cares? I don’t care. I remember talking to people selling forty acres in Texas. I said, look, and number one, with this county, by the way, good luck getting somebody on the phone. They only work four hours a week. The other days They’re a Sheriff. And then they’re a Judge on Fridays, you know, whatever. It’s that kind of a thing. Number two, short of putting a casino on it, I’m not sure anyone’s going to notice. That’s exactly what I used [inaudible 00:11:22] We’d just have a laugh and go, “This is the greatest thing.” I said, “You’re right. This is one of the beautiful things about Texas, west Texas. Have fun.” So, there you go. That’s my last comment.
Steven J Butala:
I’ll close on this. I had a conversation, not that long ago with somebody in Arkansas because we bought a bunch of back tax property and in every group of back tax property there’s like two or three where it just blows your hair back. Like, wow, these are great properties. So, I called the planning and zoning and said, “What’s possible on this property?” And he said, “What do you want to do?” And I said, “I don’t know, maybe build a house, maybe put a mobile. I don’t know. I’m not sure.” He said, “All of those are fine. You don’t need to ask us.”
Jill DeWit:
That’s great.
Steven J Butala:
And that was it.
Jill DeWit:
Love that.
Jill DeWit:
Happy you could join us today. Five days a week, you can find us here on the Land Academy Show.
Steven J Butala:
Tomorrow, the episode on the Land Academy Show. Well, it’s Jack Thursday, and I’m going to talk about how to calculate your cash on cash return on a land deal. You are not alone in your real estate ambition.
Jill DeWit:
Is this like that spreadsheet? Is this like that spreadsheet that you used to have to make for somebody that they didn’t know how to do the ROI percentage? And you made a little chart for them, their names, their initials are MP. Do you remember that? I remember MP not being able to set up a little… It was like six boxes. Do you know who I’m talking about?
Steven J Butala:
I know exactly who you’re talking about, and so does everybody else because you used to be part of his group, the vast majority of [crosstalk 00:12:51]
Jill DeWit:
Oh, them not me.
Steven J Butala:
Not you.
Jill DeWit:
No, not me.
Steven J Butala:
Listeners.
Jill DeWit:
Listeners might have been part of MP’s group. But he couldn’t do this. I remember him emailing or calling me or something to ask you for that little chart to send over so he could plug in some numbers. Is it this thing or is it different?
Steven J Butala:
I’m going to cover like six different numbers that people use to analyze the performance of their businesses and why five of them are stupid.
Jill DeWit:
Okay.
Steven J Butala:
And why one of them matters.
Jill DeWit:
All right. So, you’re going to make us wait. That’s fine.
Jill DeWit:
Thank you for tuning in. We would love to connect with you tomorrow on Clubhouse, by the way. Join me and, usually, Jack every Thursday at one o’clock Pacific time in the Land Investing Club.
Steven J Butala:
We are Steve and Jill. Information…
Jill DeWit:
And inspiration…
Steven J Butala:
To buy undervalued property.
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