Invest in a Haunted House – Make Big Bucks Scaring People

haunted houses

The Economics of Haunted Houses

Most haunted house businesses are only open for around 5-6 weeks, a few weeks before and just after Halloween.  When you invest in a haunted house, you expect to make a profit.  It comes down to:

Number of Visitors x Cost of Admission = Revenue.  If you have 20,000 visitors paying $25 admission, that works out to $500,000.

Expenses include: the cost to build the attraction (one source puts this at $25 to $30 per sq.ft.; for a 12,000 sq.ft. attraction, that would be around $330,000), the cost to staff the attraction (very variable, could easily be $40,000+) the cost to advertise per visitor (same source has this at $2 to $3 per visitor; about $50,000 for 20,000 visitors), and various other costs like real estate cost from owning or renting the building or land the haunted house is located in or on, website development, administrative costs, etc. (hard to pin point a number for this)

Revenue – Expenses = Profit.

Haunted houses aren’t hugely profitable, but could make economic sense once the following factors are taken into effect:

  • You might be able to re-use or re-purpose your build-out the following Halloween, cutting down on next year’s building costs.
  • Unlike other business, the money is brought in from admissions not long after you spend the money on expenses (quick cash conversion).
  • The money you bring in is not great on an annual basis, but the Haunted House itself, including the setup time, does not take up that many months; you should be able to make money doing something else for most of the year.
  • If you own raw land or a building/warehouse that will eventually be developed or re-developed into something else in the future, this is a way to land bank (generate some income while you wait).
  • If you own some other business or real estate like a hotel, a mini golf course, theme attrraction, or shopping center, a haunted house might be a way to generate additional income, and you could probably offer a smaller 3000-5000 sq.ft. haunted house or attraction.

Marketing is Absolutely Critical

Getting a large number of customers through your door in a short period of time is absolutely critical.  Haunted houses flood the radio airwaves, Google AdWords, Facebook, and other online marketing channels starting in September each year.  Obviously developing a large social media following (Twitter, Facebook, Instagram, etc.) will be useful each year as a way to reach out to repeat visitors at a low cost.  Remember that you are in the entertainment business.  A great haunted house with great creative design typically has a great website and Facebook page.  A few examples:

Another aspect of marketing that cannot be overlooked is pricing.  You cannot under price your haunted house.  This is not a labor of love; you have to make money.  Just like Disney offers FastPass and even more upgraded passes where you don’t wait at all, haunted houses and offering $10 and $20 upgrades for people that don’t want to wait in extremely long lines.  Pricing also might be variable where you pay more on Friday or Saturday nights and less on Mondays.  Offering other services like photos can generate extra income.

How to Get Started

Investing in haunted houses is such a niche investment that it is important to gather a huge amount of information before even considering moving forward.  This is nothing like going to an investment firm and buying a stock or mutual fund or going to a real estate broker and buying a house.  It is way more involved than that and the number of people out there offering good advice is very small.  After all, a profitable haunted house operator has no incentive to share knowledge with a potential competitor.  Some of the resources to look at would include:

Visit these sites and you will find links to dozens of other sites such as suppliers and lists of specific attractions nationwide.

There are consultants out there that have helped entrepreneurs develop haunted houses all over the US (and Europe).  Spending the money up front with them to give you an exact breakdown on costs and other expectations will probably be worthwhile.  Your market may be too small or your profit expectations may be completely unrealistic.  A couple of the consulting firms out there include:

The decision to invest in a haunted house should not be taken lightly.  It is an unusual investment and very few people will be successful at it.  However, for a select few it is profitable business and a source of income that does not require it being staffed and operated year-round.

 

 

 

 

 

Comments

comments

UNUSUAL INVESTMENTS
Visit Us On TwitterVisit Us On Facebook