Club amenities vs. real estate market values
5 tips on how to determine a good (or bad) golf community real estate investment
Jason Becker, PGA
March 06, 2019
See the full article on golfadvisor.com
Over the past three years, I have had the opportunity to host several educational events for consumers from the northern part of the country starting the process of a transition to southern states. The forums tend to unfold in the same predictable fashion, but there was a question at one event that changed the course of my thinking on how to invest wisely in your future golf community home.
During a Q&A session at Milwaukee Country Club in 2015, a hand patiently raised up in the back. Up to this point, most questions had centered around club membership programs, typical club bylaws and the overall club culture differences that span across the Sun Belt. But then it happened: a curve ball. A question that was so intuitive for a consumer to ask, but the panel of advisors and I were left with no answer. Yet, we were inspired.
“Is there a fundamental formula that consumers can use to determine if real estate values in a Sun Belt golf community have been, or will be, either positively or negatively affected by the club’s golf course, amenities and overall assets? This is a major decision for me and my family, and I want to make the smartest investment I can.”
Silence fell on the panel as we all thought, Wow, what a great question! Unfortunately, at that time, none of us had a tangible answer.
On the flight home, I remember staring out the window and thinking: “How is it that there is no real estate program or road map in place for a consumer who will be making such a life-changing financial decision?” It seemed reasonable; there had to be a way to do research on, say, three to four club communities and determine which one was generating positive (or negative) real estate market values based on the club’s amenities. But, how would you correlate the two?
Case in point: In 2016, Grey Oaks Country Club in Naples, Florida underwent a masterful $36 million-dollar renovation and capital improvements plan that early-on had several members fearful of voting on such a large financial investment. The argument, however, was: “If we choose to invest in our club, not only will the membership grow and prosper, but our homes will increase in value due to the club’s amenities.”
As it turns out, those assumptions were correct.
At the end of the 2017 calendar year, the 34105 zip code (Naples) showed a year-to-year stagnate market in terms of fluctuating real estate values. But within that very zip code, real estate in the Grey Oaks Country Club community increased on average by 8.5 percent.
There are dozens of stories like Grey Oaks Country Club circulating amongst the private club marketplace from Palm Springs to Hilton Head, however how do consumers pinpoint the club that will be the best lifestyle investment for themselves and their real estate needs? Well, I am happy to say that after three years of obsession over the Milwaukee Country Club question, we have helped develope a roadmap to advance the research into making such a move.
Helping us on this project is Michael Timmerman, CRE and chief market intelligence officer of Club Benchmarking. Michael has studied the relationship between a club’s amenities and real estate values for over 30 years. He also speaks around the country on this topic to assist developers and investors in better understanding what to look for when trying to make this important purchase decision. I have asked him to help us formulate a list of the “Top Five Tips” for consumers to help with the search of utilizing the resources readily available. Our aim is to provide common-sense tips to help research a new home purchase into a future golf community.