Are Yurts and Glamping Tents a Good Investment? Cost Breakdown

In August 2023, I visited three “glampsites” to understand why they are so popular among vacationers and more importantly, the investor.

Before you read this breakdown, I have one disclaimer. At the time of this writing I haven’t run these numbers by a short term rental investor, specifically in the “glamping” space. These numbers are based purely on costs that I’ve experienced with my short-term rental build. 

This article is a very high level analysis backed by curiosity. If you’re looking for Real Estate “loopholes”, Short-Term investment strategies or super granular business techniques, look elsewhere.

But if you’ve noticed that these “glampsites” have been popping up everywhere and want to learn about the start-up costs behind them, keep reading.

Now, let’s dive in.

Land Costs:

You need to put the structures somewhere.

Assuming you’re not going to rent out your backyard, (although I visited one property that did this and they made it work). You’ll need to purchase some land.

For glamping, I like to assume that .25 acres per structure is reasonable. I make this number up to include a road, a place for your guests to park their car and use the restroom. 

I bought my land for $5,000 an acre but it ranges. 

For the sake of this article, we’ll go with that.

Materials:

The most popular glamping experience I’ve seen on my “field research” is with safari tents on top of a wooden, level platform. So this material breakdown will be created for a concept like that.

Without the super in-depth analysis on 2023 wood prices and the best places to purchase materials, I’ll give it to you straight. 

I built a 12×16 wooden platform for my short term rental build for just over $450. I bought everything from Menards. 

This includes:

• Plywood

• 2×4’s

• CinderBlocks

• Nails

Again, this article is not a “read once, then implement”. It’s purely an article based on curiosity where I spit ball math.

The Structure:

If you’re looking for the least expensive option to build a glampsite, I’ll give you two options:

Option 1: Safari Tent

When I did my “field research” I stayed in a safari tent-like structure. Just based on light internet research, I’m seeing that bell tents, the cheapest option, sell for just under $2k. To include taxes and any other fees, let’s call it $2k per tent.

Things to consider:

• If the tent rips or breaks, you’ll have to order replacement parts from the manufacturer which costs time and money.

• Each season you have to take them down and set them up. This is labor you do or pay for.

• If Jim and Joe get a little too hammered and spill beer all over the tent, you’ll need more than paper towels to clean the fabric.

Option 2: Build

In the past I’ve stayed in bare bones cabins. This pretty much means you get four walls, a roof and minimal accommodations. This is similar to the route I took with my short term rental project, so I’ll give you my numbers. 

Including the 12×16 platform I listed above, we’ll build one cabin for about $4,000. This is without making the interior super flashy or special. 

Things to consider:

• If anything breaks, it’s relatively easy to fix without relying heavily on third party vendors.

• With point number one in mind, repairs might be a little more expensive.

• Easy to clean and lasts all seasons.

• You lose the modern, trendy appeal that the safari tents have. 

Obviously, any custom modifications or design aspects will up your costs but better your experience. As a marketer, I would recommend you try and add some sort of special appeal to attract guests.

Labor & Operating Costs:

Recapping what I said at the beginning of the article, we are spit balling on how to build the most inexpensive STR option. These labor and operating costs will continue to follow that notion.

Labor:

Short and sweet. If you plan to save money, do everything yourself.

• Cut down trees.

• Even out the driveway.

• Hull materials in.

There are some situations where you’ll have to rent equipment, which has cost me $500 so far, but run the machines yourself.

Operating Costs:

Operating Costs refers to how much it costs you to run a business. Just like any other business, it’s going to cost money to make money.

For operating costs, we’re just going to go with business finance 101 and assume our profits never dip below 30% of top line revenue. 

That means our operating costs are 70% of top line revenue.

Let’s Put It Together

With any business, figure out what you want out of it before doing anything.

This is a whole topic I could ramble on forever, but for your sake, just figure out WHY you want to start a business, make the stress and grind worth it to you.

For this scenario, I’ll consider why you clicked on the title of this article and relate it to money. 

I assume you want to make money without investing a lot.

Cool.

The average American pays $1,800 in rent per month.

Let’s say you want to cover rent while taking only 10% of your profit in order to do so (best practice).

Ready for the breakdown?

Land Cost: 

Calculation: 120 x 365/12 x 0.68 = $2,482

Each tent will generate $2,482

You’ll need 24 tents to achieve $60,000 per month in revenue.

At .25 acres per tent. That’s 6 acres. 

6×5000 USD per acre. That’s $30,000. 20% down payment (again, what I did).

That’s $6,000 down.

Depending on your bank’s financing options, your monthly payment will be different. I did a 5-year balloon loan.

Materials Cost:

Following my $450 per wooden platform, let’s add $100 for fire pits, chairs and whatever else.

So $550 per platform times 24.

Total upfront for materials is $13,200

Structure Cost:

If you go with the tent, it’ll come out to $48,000

If you go with the built cabin, it’ll come out to $96,000

Hindsight 20/20, you could probably charge more per night for the cabin which means less structures.

So, Are Glampsites Worth It?

The cheapest option in the short term are obviously the tents. In order to pay the average american rent you’ll need:

• A $67,200 initial investment.

• 24 tents.

• 6 acres of land.

So is it worth it?

Only if you love it. I think glampsites market themselves very well. They’re unique, trendy and allow travelers to keep money in their pocket while also being comfortable during their stay.

Is it sustainable? I’m not sure.

I noticed that the glampsites I stayed at offer more than just a tent. Most I’ve seen build trails on the property and others have these tents on their larger campground or RV park. 

So it’s not their main focus. If the trend goes away, they still have a business.

Therefore, I think the glamping business is just another business. 

• You’ll need to do your own marketing.

• You’ll need to get your business “out there.”

• You’ll need to work late sometimes to organize your finances.

That’s all for today, I’ll see you in the next article.