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When Louis Herron spent $2,333 on an acre of land in 2013, he knew was getting a good deal.
But he never predicted the property in Flagstaff, Arizona, a 30-minute drive from the Grand Canyon, would become over six times more valuable in less than a decade. Now the acre, which currently hosts two tiny homes, is worth up to $15,000, according to an appraiser estimate reviewed by CNBC Make It.
“I was 21 or 22 years old at the time, and I had no idea I could even buy property,” Herron, 31, tells CNBC Make It. “I stepped foot on the property and knew I had to take advantage of the opportunity, even if I didn’t do anything with it.”
He adds: “I spent all of my savings on this land.”
Despite its spike in value, Herron says he’s unlikely to sell it anytime soon: The two tiny houses combine to create his bedroom and living spaces, and it’s only 30 minutes from his full-time desert hiking business, which he started three years ago. Here’s how he acquired the land, and why it’s risen so much in value.
A stroke of real estate luck
In 2011, Herron dropped out of Ball State University to follow a sense of wanderlust, he says. He washed dishes in a restaurant near California’s Yosemite National Park before becoming a tour guide for park employees. In June 2012, he took a similar role at Glacier National Park in Montana before settling in Flagstaff, right outside the Grand Canyon, in 2013.
A friend of his found the real estate deal, Herron says: $7,000 for three acres of land. With another friend, the trio bought the parcel and divided it up, giving each person an equal piece for an equal price.
Herron moved onto his land in 2017, when local rent prices skyrocketed. He lives in two tiny homes: One has a bathroom, laundry room and bedroom, while the other has a kitchen, living space and storage.
Louis Herron
Herron says he purchased his first prefabricated tiny house in 2015, but didn’t actually move onto the land until May 2017, following an increase in rent prices. The house was too small to fit most standard home amenities, so he bought a second prefabricated tiny house from a neighbor and divvied up his living quarters between the two structures.
One house has the bathroom, laundry room and main bedroom, Herron says. The other has the kitchen, living space and storage.
“The cost of living shot up due to gentrification that’s going on in the town, so I thought instead of paying a ridiculous amount for rent, I could just simply live on the land,” Herron says.
Average foot-traffic, higher spending
The land’s dramatic increase in value is “based on location, vegetation on the lot … electricity close by, [and] neighboring properties,” according to emails from the appraiser to Herron, which were reviewed by CNBC Make It.
Herron says he plans to build yurts on his property and eventually buy more land, as long as it’s sustainable to manage.
Louis Herron
Gentrification likely also factors in. Last year, the median price for a one-bedroom rental in Flagstaff was $1,300 per month, according to Apartments.com. Data from Rentdata.org shows the same area’s one-bedroom median rent in 2013, when Herron bought the land, as just $852 per month.
That’s a 65.5% increase in median rent over those eight years. For comparison, the median price of one-bedroom rentals nationwide rose 54.5% between 2011 and this past May, according to U.S. Census data and a Redfin report.
The Grand Canyon is also increasing in value. In 2011, 4.3 million tourists spent $467.26 million at and around the national park, the National Park Service says. Only 4.5 million people visited in 2021, but those visitors are spending a lot more money: The park’s gateway regions cashed in $710 million through tourism last year.
In August 2020, Herron and his then-partner spent $15,000 to build a 16-foot-yurt on the property. It brought in $27,600 between August 2021 and August 2022 as an Airbnb rental, according to documents reviewed by CNBC Make It. When they split, Herron’s ex took ownership of the yurt. Herron says he wants to build a replacement — or multiple replacements — soon.
He’ll have steep competition: There are at least 2,000 vacation rentals in Flagstaff, according to rental analytics company AirDNA. Herron says some adjacent slices of land host up to six Airbnb listings each.
Financially speaking, Herron is betting that his land’s value will continue to rise. But he says that’s not the point: He’s curated his off-the-grid experience as a testament to his appreciation for living off the land.
“The Grand Canyon arguably is the most incredible backdrop in the country,” Herron says. “I love living on its doorstep and taking trips on a whim and sleeping under the stars in the canyon.”
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