Having a front-row seat to well-manicured, evergreen fairways is hard to beat, especially for zealous golfers, and it is just one of the perks of living in a golf course community. Even if you are not an avid golfer, the year-round lush landscaping may be enough to entice you to buy a golf course home.
But are golf course homes worth the investment? Golf course homesites are in short supply, so they command a premium. Property values will also be higher depending on the golf course’s location, quality, and popularity — and whether the home has an unobstructed view of the course. So what’s the potential return on investment should you decide to sell?
Before you make plans to tee off, take time to do your research to ensure you find the right golf course home. Let’s take a look at the bottom line to discover if buying a home on a golf course is a smart investment.
Demand for Golf Course Homes is on the Upswing
In recent years, interest in golf course communities was on the decline. However, that downward trend is reversing; real estate industry forecasters are predicting that the demand for these homes will continue to surge in the near future.
One reason that researchers have identified is that the pandemic has caused people to rethink sports and exercise – the outdoors has taken precedence over enclosed spaces. In early 2021, Golfweek noted that people are leaving densely populated areas in search of more space, and many have found golf course homes to be a great real estate investment. Studies of golf communities, especially in the south and southwest, indicate there is a rising demand for golf course homes.
Jason Becker, a PGA of America professional and CEO of Golf Life Navigators, said “All in all, the golf real estate component is certainly on fire, and I don’t see any signs of that stopping or slowing down.”
Longitudes Group, a sports marketing research firm that analyzes data to learn what role sports plays in home buyers’ real estate decisions, tracked trends in the top 40 golf course home markets. After studying the data, Sara Killeen said, “Lot values on golf courses have a 40 percent premium over other lots in the neighborhood. Even when a market is really getting hammered, people will find a golf course home more appealing than a non-golf home. A golf home is going to out-perform a non-golf home almost every time.”
Resale Value of Golf Course Homes
So are those high premiums worth the investment? If and when you’re ready to sell, how likely are you to get top dollar for your golf course home?
Golf course properties typically have great resale value, selling at two to three times that of an average home – which is a magnet for investors. Property values also get a nice upward nudge because golf course communities are almost always within range of great restaurants and boutiques, and may even have their own schools.
Of course, no home is immune from losing some of its value during an economic downturn, but those on a golf course tend to stabilize more quickly than others.
Another thing to keep in mind is that, as is true in many communities, golf course homes are typically governed by a homeowners association (HOA) . The HOA issues a set of rules, regulations and dues. Part of the dues collected are funneled into a fund to maintain the golf course, which can range between $500k to $1 million annually.
So before buying, you’ll want to conduct a financial wellness check on the golf club to ensure it is a sound and stable operation; you don’t want to live next to an obsolete, derelict course, which would have a detrimental effect on your home’s property value.
Do Golf Course Homes Require Golf Club Memberships?
When developers began building golf course communities in the early 2000s, many HOAs required homeowners to purchase a club membership. However, this has proven to be unpopular.
“Prices for homes that come with mandatory membership in a golf club are way below what they should be selling for,” Ken Johnson, a real estate economist at Florida Atlantic University, told The Wall Street Journal. “Depending on where you buy or build, however, you may still be required to purchase a club membership — or it may be included when you purchase the home, so be sure to verify any membership requirements prior to making your investment.”
Most clubs do not offer automatic membership – each one has its own set of rules. Some may charge a one-time initiation fee, while others may require an annual fee. The fees vary, depending on the club, but members may pay anywhere from $3,000 to $10,000, annually for private clubs, according to the Golf Membership Spot. Yearly fees may include unlimited use of the club, but cart and caddy fees are typically extra. There also may be a minimum purchase on food and beverages. Again, check with your golf club for those details or if they offer any discounts for nearby residents.
Living in a golf course home is an experience savored by only a small sliver of the population. Golf course homes are typically situated in an idyllic setting, but residents have more things to consider than aesthetics. If you are still trying to make up your mind, check out the pros and cons of living in a golf course community to help you make your decision.