Burial Space Scarcity Turns Cemetery Plots Into High ROI Real Estate Assets

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There is a rarely discussed real estate shortage that has cropped up in cities around the world.

Since the 1970s, Japan, Hong Kong, and South Korea all have steered the majority of their funeral services towards cremation, due to concerns over lack of adequate burial space. Korea actually has a 60-year rule requiring exhumation and removal, which has boosted cremation as the default choice. In Hong Kong, space is so precious that exhumations are required at only  6 years. Exhumation, i.e., digging up remains of people buried generations ago to either cremate them or move them elsewhere, has long been a regular practice in a wider range of places and cultures than one might initially imagine. For example:

• The European tradition of burying loved ones in a church cemetery continued when space became scarce due to remains being exhumed and removed after a couple of generations to be stored in catacombs or other underground sites, in order to make room for new burial ceremonies.
• In New Orleans, the high water table has made mausoleums and other kinds of above ground burials more routine, and buried remains often need to be exhumed and moved to avoid washing up ashore during floods. 
• The Hindu preference for cremation vs. the Islamic mandate for burials has often been another point of conflict, especially for Hindus in Pakistan and vice-versa, sometimes requiring exhumation and relocation to avoid escalation to violence.

Burial Plots As A Real Estate Asset

When demand is high and supply is limited, that is the textbook description of a business opportunity if one has the resources and skill sets to apply them. Thanatophobic issues aside, burial plots would appear to represent a ripe lucrative real estate play for smaller investors, given the comparatively low price for entry, the lack of property development required, and an inexhaustible supply of prospective buyers. With this in mind, the following parameters are part of the equation upon which one can project their potential ROI:

Location: As statistics on burial plot prices demonstrate, the higher demand and diminishing supply ratio is strongest in cities where populations are more dense. Just like with conventional real estate, location dictates value, so the more sought-after locations are correspondingly more expensive. So just like whether buying a 2 bedroom condo on Park Avenue vs. a studio apartment in Brooklyn, both will have resale value, but the type of buyers and market demographics will differ. Historic cemeteries, proximity to celebrities, scenic overlooks, access to major roads, or interment in a mausoleum space all have different cache and price tags.

Demand: Many cemeteries are becoming overcrowded, which inevitably increases the demand and asking price for burial plots. That said, since many family members often wish to be located near each other, the demand for adjacent plots may be able to command a premium above a solitary one. Given that the overall supply is dwindling, selling off adjacent plots as one-offs to separate buyers can always serve as the default backup plan.  Additionally, cities with a larger demographic of Muslims and/or older Catholics, both of which normally eschew cremation, will likely comprise a stronger market demand for burial plots. 

Return On Investment: According to several urban cemeteries, demand is driving prices upwards. Plots that once sold for $1,500 a few years ago are now selling for over $4,000, close to 200% ROI. The chances are good that similar returns on an investment can be obtained if purchasing plots at this time. Cemeteries that are still new with current multiple vacancies could be a hot commodity 25 years from now, as demand increases. Cherry picking available prime locations can be a treasure hunt worth pursuing. 

Investing in Burial Plots – Due Diligence and Resources: Given that the supply and demand ratio is only widening, this would suggest that burial plots are a relatively low-risk investment. However, as with all investments, conducting proper due diligence to evaluate the market for an intended target cemetery area is certainly warranted. Unlike with conventional real estate and websites like Property Shark that offer a panoply of listings, Burial plots are not a normally advertised asset. A call to the cemetery or a quick search through Craigslist or comparable online forums and marketplaces will give a better picture of the value of land in an area of prospective interest. It will also help to determine which locations are the most valuable.

Actual Burial Plot Real Estate Investment Examples:

Comparably to conventional real estate investment, it normally takes a few years for the market to appreciate sufficiently to realize a hefty ROI in double digits. Although “flipping” burial sites is an uncommon scenario, if an opportunity arises to obtain a plot at a bargain price presents itself, it may result in a lucrative “flip” scenario. Monica Zamudio of Burbank, CA found herself in this precise scenario, and she recounted her experience from a number of years ago:

“I was looking through Craigslist and saw that there were ads for Cemetery Plots for sale by owners. I looked at one which was valued at $2900, but the owner was asking $1900. Immediately, I realized that the owner was motivated. I thought, what a great way to start practicing, so I researched the value and verified that it was worth $2900. I called and offered $1500. The plot was located at Hollywood Hills Cemetery in Southern California. 

The owner called back and said he would take $1600 plus the transfer cost of $100. Used my own cash to purchase and the transfer & re-deeding took place at the Cemetery office.

I then immediately advertised it for sale in a local paper for $2900 with owner financing. I got at least one call every day for about a week until I got an offer for $2700. I accepted that offer and made sure that they covered the transfer fee of $100.

Two weeks after I bought the land, I sold it for all cash with an $1100 profit. At the end, I had an ROI of about 69%, and a new found belief in myself.”

Speaking for myself, I purchased a plot for 2 burials while in my 30’s for myself and my late wife, who died of cancer at age 34. The value of that plot has appreciated considerably over the years into triple figure percentages, such that the cemetery contacted me a year ago to offer me larger space to accommodate 4 interments in its new, above ground mausoleum in an even swap for my current plot, with the transfer costs of my late wife’s remains included in the swap. 

An Alternative Asset Worth Consideration

At its root level, burial plots are just real estate in a different configuration, and could be compared to parking lots, boat marinas, or other types of real estate not intended for residential or regular commercial use. USA Today, The Wall Street Journal, and The New York Times have all covered this topic, with the Times making the analogy of burial plots being akin to a co-op, with occupancy rights in perpetuity without actual ownership of the land itself. The Times also noted that the most expensive plots in New York City at the time of the article’s publication was in Little Italy’s tiny Basilica of St. Patrick’s Old Cathedral, where plots were $1 million each. Given their upside potential and relatively low investment entry amount demand, burial plots are an alternative asset class worth further exploration especially in large population metropolitan and urban cities. 

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