Recreational Real Estate is THE Investment of 2022
Well, 2022 is off to a volatile start. We’ve seen a war, equities market crash, crypto crash, the largest collapse of an organization since Enron (Terra Luna), inflation over 8%, the largest residential real estate bubble since 2008, commercial real estate under pressure as more companies adopt long term remote work policies, and industries like CPG getting hit with distribution costs that in some cases have doubled. Where can you confidently invest in 2022?
Recreational use real estate is an interesting opportunity. In fact rural lands are being purchased by the likes of Bill Gates (almost 300,000 acres), and Ted Turner (over 2 million acres). It’s easy to understand that land is valuable as there is a capped supply. At a recent campground conference there were two investors in the room with nine figure budgets each. They were seeking to acquire RV parks and campgrounds. Buying land has almost always been a stable investment, but why is recreational land prepared to boom versus other investments? Especially in these challenging economic conditions, it can be hard to understand why recreational land has the potential to outperform other investments (including tech), in the short term future. Well, it’s actually pretty simple. It comes down to timing. We are experiencing a massive social and economic shift in our workforce. Freedom of location and time. This is being driven by two demographics.
- Baby Boomers
In the USA, some 70+ million baby boomers have recently retired or are preparing to retire. As a result, companies like Camping World are recording record profits. Camping World had it’s best quarter EVER in Q1 2022, as it reported $1.7B in gross sales. Additionally, the RV market saw a 17% increase in sales year over year in 2021. That’s ALOT of RV’s hitting the road. Boomers spend a whopping $157 BILLION on travel. They are the cash cow of the travel industry.
2. Remote Workforce
Digital nomads have exploded as people are no long tethered to a daily office commute. In fact, Airbnb recently reinvented their search in order to better support this demographic. The reasoning behind this was 20% of Airbnb bookings in 2021 were for extended stays. This demographic is focused on unique experiences and may bounce around across the world staying seeking unique living experiences. It’s estimated that in the USA, 36 million people will permanently work remotely by 2025. That’s an increase of 87% in remote workforce from 2020.
Further data indicating the demand for recreational use real estate can be found in booking engine data. Our campground reservation booking engine (CampNative.com) has seen a 200%+ year over year increase in booking requests in Q1 2022. The National Park Service reported 297 million visitors in 2021 (up 25% year over year). The camping industry as a whole is up nearly 70% in users over the past five years. Campers are also staying longer with an average stay increase of 10% in 2021 over the year prior.
Over the past five years, a new type of camping is taking over. “Glamping” or modern camping is where a property offers existing temporary structures such as canvas tents, geodesic domes, yurts, or tiny homes. Glamping is projected to grow by over 10% annually over the next decade and currently has over double the return on investment than commercial or residential real estate rentals. Fdomes (geodesic dome manufacturer) boasts case studies with an average return on investment of ~6 months. They show an average occupancy of 87% and average nightly rate over $200. Incredible for a structure that costs less than a fraction of home. Most domes and yurts will last between 15–20 years.
Purchasing recreational use property is challenging. First, you must buy land in a desirable location that offers amenities and great access to outdoor activities. You must also work through local zoning laws and ensure you can gain access to utilities. There is a lot that goes into sourcing and developing the right property. Alternatively, you could purchase an existing campground, but most of the good properties for sale are priced in the millions of dollars. Anyway you slice it, developing and owning a desirable recreational use property is going to come with an upfront cost of over a million dollars. For most people, that upfront price tag prices out the retail investors.
Enter YAK DAO (https://yak.camp). YAK is a decentralized autonomous organization that is focused on acquiring recreational use lands and providing fractional ownership through the use of NFT memberships. Essentially, a user can purchase an NFT that represents access to that property. If you own the NFT for a structure on a YAK DAO property, you can stay in it or rent it out just like you would any other piece of real estate you own. In this case YAK completely manages the property and the bookings making an investment in a YAK NFT a turnkey recreational use property investment. You can learn more about YAK by following on twitter https://twitter.com/theyakdao or join the telegram https://t.me/yakdao.