Raffling Land/Commerical Property

How About Raffling Land or Commercial Property?

Diane Giraudo McDermott, May 26, 2010

I’ve often been asked the question whether vacant land or a commercial building can be raffled. I’m not aware of any regulation that would prohibit you from doing this. The nonprofit should double-check with the gaming control board in their state. First, let’s take a look at raffling land. I think it’s possible but the main issue would be whether you can successfully market it enough to sell all the required tickets. Find a way to make the idea appealing to the nonprofit; otherwise, it may not want to take the risk of having vacant land as a grand prize.

             I suggest that you work with a builder and raffle the prize as a home to be built.  I believe ticket buyers would be attracted to this idea especially if the winner could be involved in some of the decisions and customize the home to fit their needs. This concept can also create a powerful marketing message for ticket sales because sometimes ticket buyers don’t like the prize home, so they won’t risk even $100 to win.  Maybe the builder has a model and pictures you can use; so be sure to have floor plans and photos to show ticket buyers and also post them on the house raffle website. Present the prize with options, i.e. a four bedroom home or a three bedroom home with a den. And of course, allow the winner to choose the carpet, tile, paint colors, and other cosmetic features.

             The one negative in using a home that is not built yet, is that you will lose the emotional appeal for local ticket buyers when they walk into the prize home and want it. I believe that most of the tickets sold in a house raffle come from buyers in the area of the prize home. They will have to use their imagination and some people aren’t very good at doing that. Think about people who find a great house to buy, it’s in their price range, the location is perfect, but they don’t make the offer because they don’t like the color of the carpet. The carpet can be changed, but they are not able to imagine the home with a different carpet. I recall ticket buyers at my open house become very excited when they walked into the home, and said, “Wow, it looks so much nicer than the photos.” It was the emotion they felt of being in it!

             Regarding the idea of raffling a commercial building, I believe a multi-family unit such as a duplex or a fourplex may be desirable to a raffle ticket buyer. In this economy it would be a benefit to win a prize that would generate income for the prize winner. On the other hand, you’ll have some people that don’t feel comfortable owning rental property and, therefore, will not purchase a ticket. Then there is the issue about the value of such a property and would that drive the total number of tickets required, in order to cover the costs, too high and make it difficult to get all the tickets sold. Yet there are house raffles where the prize is a 2 million dollar home which may be comparable in some areas to a multi-family unit. The same issues would apply to a commercial business property, such as a restaurant or office space. The number of people interested is less than those interested in owning a home and total raffle tickets required to cover the cost might be too high.

             Although a house raffle’s greatest asset is publicity and raffling land or a commerical property will most certainly get the media’s attention, my advice to a nonprofit is to stay away from raffling commercial property altogether, and stay away from a “home to be built” for their first house raffle. Don’t venture to new territory until you’ve had some house raffle practice.

Get The Book + Free Consultation!