There are a lot of talks these days about homesteading, the resurgence of people wanting to grow their own food, raise their own animals, reduce societal dependence and generally be more self-sufficient. It is undoubtedly appealing.
Some even claim to have significantly increased their income as a result of homesteading. But can homesteading be profitable?
Yes, if you are careful to keep expenses low while maximizing money-making activities and ventures on the homestead. A working homestead might be a business opportunity depending on your skills and the market, but many people underestimate the upfront and ongoing costs associated with establishing and maintaining a homestead or overestimate their income potential.
There is a lot to consider, and it is not something that most people thinking of making the change can afford to get wrong.
But that’s why I am here to help you weigh all the factors associated with it in this article.
What does “Profit” mean to You?
Before we go any further, it is probably beneficial to define what profit means, or rather for you to define what profit means to you.
If you go with the strict interpretation of profit being the money you have left over after all of your expenses are deducted, then determining whether or not homesteading is a profitable venture is a fairly simple equation.
If you deduct all of your cost of living expenses and you are still in the black at the end of each month, congratulations, then homesteading is profitable for you.
However, if in your heart you have decided that a profitable homestead is going to be a venture or lifestyle choice that will see you making more money and generally living better than you are right now, you’re going to have to dig a little deeper.
And I’ll tell you right up front, most people who are transitioning toward a homesteading lifestyle dramatically underestimate the costs associated with it.
At the same time, they might well overestimate the income potential that they believe is inherent to such a move.
We’ll break these concepts down in a more granular fashion below.
Is Homesteading a Business Decision, or Lifestyle Choice?
The first factor you need to consider is whether homesteading is a business decision or a lifestyle choice for you. If it’s the former, then your primary focus will be on generating income.
And while there are certainly opportunities to do that through homesteading (more on that shortly), there are probably many other “modern” businesses you could start that would likely be more profitable.
However, if your focus is on making a lifestyle change, then your emphasis will be different. In this case, your goal might be to reduce your cost of living and/or increase your quality of living.
And while those are not mutually exclusive goals by any means, they do tend to require different approaches when looked at from a profit perspective.
For example, someone who is focused on reducing their cost of living might choose to grow more of their own food.
And they might choose to live in a smaller home or forego some creature comforts in order to save money on utilities and other bills.
Both entail upfront costs, but ones that will likely result in significant savings over time.
On the other hand, someone who is focused on making their homestead a business will have even more upfront and ongoing costs depending on the nature of the business.
Will you need livestock? How many? Supplies to care for them, training, etc. Are you farming for profit? What kind of machinery and other implements will you need, workers, etc. It gets expensive quickly.
The point is when you seriously start considering homesteading you must be honest with yourself.
If you are wanting to start a business that you “live on”, do that. If you are just wanting a new lifestyle, act accordingly.
Will You Recoup Savings on Cost of Living?
Probably the most contentious issue when it comes to homesteading is whether or not the savings on your cost of living (if any) compared to your previous way of living will be enough to offset all the costs associated with the move and lifestyle.
On the one hand, there are plenty of people who claim that you can save a lot of money by homesteading.
And while that may be true in some cases, it’s important to remember that those people are coming at this from a different perspective than someone who is starting from scratch.
In other words, they have already made many of the investments necessary to live a homesteading lifestyle and are now reaping the benefits thereof.
You, on the other hand, will likely need to make significant investments just to get started. These might include buying land, a home, outbuildings, equipment, livestock (if desired), and supplies.
All of which can get very expensive, very quickly. Living totally off-grid sounds like a pastoral dream, and it can be.
But if you need solar panels, water storage, waste handling, and other equipment on top of the cost of your home to maintain an acceptable quality of life you are in for some sticker shock.
And that’s not even taking into consideration the fact that you will likely need to roll up your sleeves and learn a lot before you are comfortable, to say nothing of efficient.
For example, you might need to learn new skills like gardening, canning, sewing, home repair, etc.
The time needed to learn and get better before you are fluent and competent has a cost all its own; if you cannot get it done, you will be forced to call upon professionals if you cannot beg or borrow help. That’ll cost you…
So while it’s certainly possible to save money on living expenses “out of the gate” when homesteading (especially if you’re already good at many of the necessary skills or desire a spartan lifestyle), it’s important not to underestimate the substantial costs associated with making the transition.
Can You Keep Your Job or Primary Source of Income?
This might be a factor for you or it might not. If you have a job or other source of income that allows you to work from home, great!
You can keep that and homestead at the same time assuming the needed infrastructure can be maintained.
But if you are thinking about giving up your current job to pursue homesteading full-time, or it will be impossible to keep your job post-move, there are some important things to consider.
First and foremost among these is the fact that even if your homestead is “profitable” it will likely take some time to get it up and running smoothly.
In the meantime, how will you pay your bills? Do you have savings? Other sources of income? A part-time job? If not, starting a homestead might not be the best idea until you do have some stashed resources to rely on.
Consider that your commute, if you have one, is likely to become much longer when homesteading. That’s an extra expense in both times, gas, and wear-and-tear on your vehicle.
Similarly, if you plan on eventually running your homestead as a business, will you have the time (and energy) needed to get it off the ground while still maintaining another job full-time and demands around the property? It is easy to bite off more than you can chew.
Think it through very carefully before giving up a regular paycheck- it shouldn’t be done lightly. Weigh all your options before taking the plunge.
Of course, these are just a few of the questions you’ll need to answer if you’re seriously considering homesteading.
But if you do your homework and go into it with your eyes wide open, there’s no reason why homesteading can’t be your new lifestyle while you work your usual 9-to-5 job.
Will You Produce Valuable Goods or Services from Homesteading?
If imagining the homestead-as-business model, you must determine the realistic income potential of that business. It is critical that you reach a data-driven determination of it.
If you are planning on selling eggs from a few chickens or artisanal butterfly jars from a roadside stand, chances are you’re not going to make enough to support yourself no matter how frugally you live.
On the other hand, if you plan to breed livestock, board horses, offer farrier services, offer vetted training, lease hunting opportunities, and offer hayrides and corn mazes during the fall, you might have a chance. In any case, you’ll be hustling.
Make no mistake: there are many ways to make money, even good money, from homesteading. But it will take more than a few backyard chickens and a big garden to make it happen.
If you’re not prepared to work long hours, be creative, and get your hands dirty, homesteading might not be for you.
Consider the following list for some viable income-producing goods and services you might produce on a suitably-equipped homestead:
- Breed livestock.
- Offer livestock services.
- Offer dog training.
- Board horses and offer horse riding lessons.
- Grow and sell produce.
- Lease hunting rights on your land.
- Build and rent cabins or campsites.
- Grow Christmas trees.
- Raise bees and sell honey.
- Lease your land for crops.
- Offer storage space for RVs and boats.
- Open a bed and breakfast.
- Rent your property out for special events and gatherings.
- Teach homesteading skills to other prospective homesteaders.
For any of the above endeavors, it will likely take some time to get the hang of things and become efficient; during this time, you will need to either have savings or another source of income to fall back on.
Additionally, think carefully about whether or not you will be able to produce income immediately, or if it will take time for your efforts to pay off.
Depending on your expectations, the grass may not be greener on the other side; it might just be… grass.
The key is being honest with yourself about what is possible and what is not and making sure your financial needs can be met by any means. It is entirely possible to live on a real homestead while keeping a usual job.
You Must Consider Opportunity Cost
One of the sneakiest problems associate with living on a homestead, of any kind and for any reason, is the opportunity costs that invariably crop up.
Or, more accurately stated, lost opportunity costs. Simply put, these are the costs of the choices you make.
This can affect you on a micro or macro scale. For example, if you choose to grow your own food it costs you the time savings associated with simply driving to the grocery for a weekly haul, in addition to the actual time spent weeding, planting, harvesting, canning, etc.
That is all time not spent doing something else, like actually making money.
The same goes for every other activity on the homestead- each one has an opportunity cost in terms of both money and time, and it can be tricky to figure out the calculus.
An example of a big-picture opportunity cost could be something like the lost chance at chasing a profitable job offer or other venture elsewhere.
If you have animals and crops to tend to, they absolutely, positively will not wait when it comes to care.
You have to do it, your family has to do it, or you have to hire someone to do it in your place. The other alternative is loss and death.
If you lived in a home or apartment with none of those concerns, it is far easier to “pull up tent pegs” and run off to chase your fortunes elsewhere.
A homestead has a way of becoming ever “heavier” over time: more and more responsibility, more and bigger animals, a larger garden, additional buildings- just more “on the line”.
If you’re not careful and honest with yourself it can feel like a millstone around your neck instead of the dreamy oasis from modernity you imagined when first starting out.
The best way to deal with opportunity cost is twofold: first, be mindful of it when making decisions about how to spend your time.
Second, try not to sweat the small stuff too much. In the big scheme of things, a few extra hours spent here and there on your homestead probably won’t make or break you, even though you may have to reprioritize some things.
But anytime a fundamental component of just living on your homestead becomes a day-in and day-out affair, think carefully, as it will dictate many of your decisions going forward.
Be Warned: Homesteading Can Entail Big, Unexpected Expenses
For whatever reason, most folks who yearn for the homesteading life tend to romanticize and idealize it: a little hard work, some honest toil, but a whole lot less trouble, aggravation, and responsibility. And most of all, less cost! Uh, right…
While there is much to be said for a simpler way of life, it’s important not to lose sight of the fact that homesteading, generally speaking is not a cheap proposition by any means.
You will have all sorts of new expenses depending on your desires- land, animals, feed, fencing, tools, equipment, housing, not to mention the costs associated with your “usual” life like clothes, food, and healthcare.
Specialized gear to help you stay modern is very expensive- solar arrays, battery banks, and the like.
And then there are the unexpected big-ticket items that can really set you back if you’re not prepared.
For example, a new roof for an old farmhouse or outbuilding is not going to be cheap. Nor will fixing a well or septic system should they break down.
A new tractor can cost upwards of $20,000. Tractor tires can set you back $2,000 to $5,000!
If you have livestock, you’re going to need veterinary care, supplements, meds, and a stock trailer should you ever want or need to take them anywhere (and you will).
Oh, and don’t forget the truck to tow it.
The point is, there are all sorts of large and small expenses that come with the homesteading territory when you go all in.
Maybe Profitable, Maybe Not: It’s Up to You
Homesteading is a lot of work but can be very rewarding both personally and financially.
If you are thinking of making the transition, it’s imperative that you do so with eyes wide open to the realities of such living: the good, the bad, and everything in between.
With that knowledge in hand, you can make an informed decision about whether or not this lifestyle is right for you, and whether you will stand to profit from such a move or not.
Tom has lived and worked on farms and homesteads from the Carolinas to Kentucky and beyond. He is passionate about helping people prepare for tough times by embracing lifestyles of self-sufficiency.