If you own farm property and are looking for additional income streams, investing in a farmstay could be for you. Farmstays are popular accommodation in Europe and Australia, but now the United States is seeing increasing interest as people look for alternative accommodations outside of hotel rooms. This article will explain what a farmstay is, how it works, and ultimately if it's worth investing in.
What is a farmstay?
A farmstay is any overnight accommodation on a working farm that is rented out as a short-term rental. Farmstay accommodations can be a private house, tiny home separate from the owners, or a room in the main house similar to a bed-and-breakfast. Some are luxurious, while others offer a more rustic stay, but what they all have in common is that they are located on a working farm. Picture green fields, rows of fresh, colorful produce, and hens clucking and scratching around. It can be a picturesque, serene escape from the city that doubles as an experience.
While this is a form of agrotourism, they are not interchangeable terms. Agrotourism can mean a farmstay, but it can also simply be tours of a farm or special events like a blueberry picking weekend or goat milk soap-making classes that are open to the public. A farmstay is also not always a bed-and-breakfast-type establishment. Although some farmstay hosts do choose to go that route, you can also have them cook their own meals or eat out, just like at an ordinary Airbnb (NASDAQ: ABNB) or hotel.
Is investing in a farmstay worth it?
Farmstays are growing in popularity, with more people seeking out environmentally friendly or ecotourism opportunities when they travel. At least a third of tourists surveyed by The International Ecotourism Society said they would be willing to pay more money to patronize a local or community-based company. Revenue from agritourism activities more than tripled from 2002 to 2017, according to the Census of Agriculture.
While agritourism refers to a wide array of on-farm activities, a farmstay can be a lucrative real estate investment since it's feasible year-round and in most cases is less time-consuming than other activities like guided horse rides or you-pick days. This can make it easier for owners to accommodate guests relative to the time they have available. And depending on budget, you can offer everything from yurt glamping on up to a converted barn farmhouse with breakfast included.
For example, a two-bedroom, one-bath farmstay home goes for $254 a night on Airbnb, while nearby comparable-sized homes not on a farm go for just $99. Pricing will obviously vary according to the size, condition, and location of the lodging, but if you own an active farm or are interested in purchasing farmland, this could be a worthwhile way to generate additional income from the property.
The Millionacres bottom line
A farmstay can be a wonderful additional income stream to property owners with a farm. And depending on time and budget, it can be obtainable for almost any operation. Make sure to consider the additional costs associated with a farmstay like insurance, cleaning, and additional utilities and maintenance. But with tourists typically willing to pay a premium for these types of accommodations, it should more than cover the additional costs while providing additional income from the property.