What to Know Before Investing in Underground Houses

Have you ever wondered about the thousands of people who live, happily and economically, under the surface of the earth? That might seem like a question out of a sci-fi film but it’s not. In the U.S. and around the world there are thousands of people who have opted to build their homes below ground for all sorts of reasons.

Underground houses are easy and economical to maintain, heat, cool and protect from intruders. And in the event of a hurricane or tornado, there’s no safer place to be than under the ground. But excavation expenses and moisture control can be a downside.

Strangely, even people familiar with the residential RE scene seem to know little about the existence of this odd market sub-category. For those new to the topic, the graphic below illustrates the major pluses and minuses of building a subterranean house:

How to Invest in This Unusual Niche?

After attending a seminar on the topic of underground housing, I wanted to find out more about the topic from an investor’s standpoint. It turns out that there are plenty of reliable resources on the topic and several interesting avenues for profit-making open to ordinary investors.

I put together a sort of summary sheet for myself in order to see all the different ways to take part in the underground housing market. There are just a handful of companies that dominate the underground market right now, but more are cropping up. It might be a stretch to say the segment is booming, but there is steady, growing interest in “shelter-like” houses that protect people from the elements and offer a good deal of invisibility and anonymity. Living underground isn’t for everyone. That’s for sure. But every serious investor should take a look at the opportunities in this intriguing, burgeoning field.

Here are the key facts I gathered for anyone who might be interested in exploring investment opportunities in the underground housing market:

One: Just a few large companies dominate the niche. They include Atlas, Vivos, and Rising S Company.

Two: It helps to know a little bit about the construction process and the different kinds of underground houses. They’re not “caves,” but tend to be super-energy efficient dwellings tucked away in “suburbs of suburbs” rather than in urban areas. Here’s a video that shows the diverse ways homeowners create underground dwellings:

Three: One company sells “private bunkers” for $25,000 and up. According to their representatives, business for underground “bomb” shelters is booming, no pun intended. Vivos is not alone, as several similar sellers now inhabit this business niche.

Bomb shelters have been a staple of the fringe real estate scene for decades, but only now are they drawing the attention of serious investors and brokers.

A Texas-based construction firm that seeks investors in underground fourplex units notes that underground building is typically done on “undesirable” plots of land, which of course tend to be cheaper than prime plots. The time it takes to build is less than for above-ground units, you can use the “roof” of the building as a parking lot, and operational costs are extremely low, as are maintenance costs.

Four: What is it about shelters and survival housing that attracts people from all walks of life? Here are a few of the reasons that many consumers are starting to think more about these unusual living structures:

  • Heating and A/C costs: Even in cold regions, heating expenses for underground homes are amazingly low. Because of “smart” architectural design that can take advantage of geothermal, solar and other ground-related sources, heating bills for underground home owners typically total about $500 per year for an average-sized structure. For cooling, the story’s pretty much the same because the earth just doesn’t vary in temperature as much as the atmosphere does. On average, the combined heating-cooling costs for an underground house are between 80 and 90 percent less than for standard, above-ground structures.
  • Weather disasters eliminated: Living underground means never having to worry about tornadoes, thunderstorms, hurricanes or blizzards. Modern subterranean homes are built with 100 percent fireproof materials. That means lower insurance costs and greater peace of mind.
  • Custom-built homes: Because every underground house is unique, owners have complete control over architectural details. Unless you purchase an already-existing underground house, you’ll have the satisfaction of buying a completely custom-built structure.
  • Construction costs are lower: The cost of underground homes tends to be lower than for above-ground ones. Because construction materials cost much less than for ordinary homes, underground models have far lower final price tags. Another factor is land value. Most underground houses are built away from expensive urban real estate, and sometimes in remote areas where land prices are quite low.
  • Unusual lifestyle: The uniqueness of living underground is one of the biggest advantages for many who seek out these unusual homes. Some who have lived underground for years say that there’s a certain sense of peace and emotional serenity that comes with subterranean lifestyles. Warmth, security, serenity, and similar words are mentioned whenever you speak with someone who lives in an underground home.
  • Life of the structure: Because there is very little exposure to natural elements like wind, rain and severe weather, underground houses are among the most durable living units available.

Five: There is a small but growing number of flippers in the underground construction market. During my online research I discovered most of them to be in the “emergency shelter” segment of the industry, selling very small, sometimes one- or two-person units in very remote areas. Apparently, some people treat these structures as summer and/or winter getaways, with the clear intention of using them if some major disaster strikes.

“Underground” Literature

Whether you’re looking to invest in underground homes or build one for yourself, here are a few key books to get started.

Earth-Sheltered Houses: How to Build an Affordable… (Mother Earth News Wiser Living Series): This is the book for do-it-yourself builders who want all the data about construction methods, costs, advantages and disadvantages of underground construction, and more.

The Underground House Book Stu Campbell’s small but indispensible book is a classic on the subject matter, complete with photos, drawings, and lists of things to consider when building an underground house. Even though some of the data is a tad dated, The Underground House Book is a great beginning volume for anyone interested in this intriguing topic.

The Complete Book Of Underground Houses: How To Build A Low Cost Home: Rob Roy’s entry on this list is another popular underground house classic, in which he details how to build your own structure, hire someone to do it for you, or purchase one that’s already built. For anyone who truly wants to “invest” in this market, Roy’s thorough explanations and diagrams are helpful and understandable.

Onward, Upward, and Downward

The relative newness and uniqueness of the underground construction market allows for limited investment opportunities. But the fact is, there are ways to get into this field for those who have a genuine interest. As an owner, broker (flipper) or direct investor in multiplex units, potential profits in the underground housing market are virtually unlimited for those with patience and the ability to do a significant amount of due diligence.

Let us know what you think about the “underground” movement in housing. Feel free to leave your thoughts below or visit our Facebook page and do so there. We look forward to hearing your opinion about the future of underground housing. Is it just a fad or is it truly the beginning of a major trend in real estate?

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