Revenue Streams
Cemeteries generate income in a number of ways including the sale of burial plots, cremation niches, and cremation urns. Costs can vary, for instance:
- $1,000 for a plot
- $500 for a niche
- $200 for an urn
Additionally, they charge for the opening and closing of grave sites, which can be as much as the plot itself. Cemeteries also make money from services such as digging graves, placing headstones, and in some cases, cremation when remains go unclaimed. A perpetual care trust is another source of revenue, as cemeteries can withdraw funds for ongoing maintenance.
The average plot costs over $5,000 in California, illustrating the potential profitability of cemetery businesses. Since space is finite and the demand for burials increases, cemeteries face the challenge of long-term sustainability even when burial spaces are fully sold.
Perpetual Care and Long-Term Maintenance
Once a cemetery is full, the primary way it remains open is by withdrawing funds from perpetual care trusts. These trusts are set aside according to the regulations of the International Cemetery, Cremation and Funeral Association (ICCFA) to provide future care and maintenance of the cemetery grounds.
Cemeteries are unique in their business model because they aren’t just making agreements for a few years or a lifetime; the maintenance of the property is supposed to last indefinitely. As a result, a percentage of grave sales is typically put into a "perpetual care fund" during the prime operating years.
Maintenance Services
Even when a cemetery is full and no longer accepting new burials, it can still monetize certain services. This includes specialized gravesite and headstone maintenance. Administrative costs such as staff salaries and marketing also represent continuous operating expenses, as do regulatory compliance and overall upkeep of the premises.
Cemeteries as an Investment
Starting and maintaining a cemetery requires a significant investment and an eternal commitment. Cemetery owners must also manage the expectations of grieving friends and family members, adding an additional layer of complexity to the business.
Despite the challenges and eventual limitations on new income from plot sales, cemeteries remain a unique investment opportunity due to their ongoing revenue from maintenance and care services, and the ability to draw from perpetual care funds.