Encrypted offsite storage using sshfs and cryptsetup/dm-crypt/LUKS

I’m interested in an encrypted offsite storage scheme, but I don’t want to depend on the vendor for encryption. I have an idea for doing so by combining sshfs with cryptsetup/dm-crypt/LUKS, but I’d like to know if there are any obvious problems with this scheme. Essentially,

1. Use sshfs to mount a remote drive
2. Create a random encrypted volume via head -c 10MB /dev/urandom > volume
3. Make a LUKS container with cryptsetup -y luksFormat ./volume
4. Open the encrypted volume with cryptsetup luksOpen ./volume myvol
5. Format the volume via mkfs.ext4 /dev/mapper/myvol
6. Mount the encrypted volume mount /dev/mapper/myvol /mnt
7. When done, unmount the encrypted volume, close it, and unmount the remote drive

After everything is setup, I’d just use steps 1, 4, 6, 7. Anyway, again, I’m just interested in some kind of offsite encrypted storage scheme where I don’t have to worry if my host is snooping or not. I’m interested if there are some possible issues with the scheme that I described above using sshfs combined with cryptsetup/dm-crypt/LUKS.