Lo­ca­tion mat­ters most when buy­ing a course

Bangkok Post - - GOLF -

How does one go about buy­ing a golf course? It’s a com­pli­cated ques­tion at a time when golf course val­ues are lower, on av­er­age, than they have been in re­cent years, par­tic­u­larly prior to the Great Re­ces­sion (2007–09).

Many of the cour­ses on the mar­ket right now can be pur­chased at around US$3 mil­lion.

The process usu­ally starts in one of two ways: a prospec­tive owner has a spe­cific golf prop­erty in mind or you start talk­ing with an agent who spe­cialises in the golf course ac­qui­si­tions.

There’s plenty of op­por­tu­nity for peo­ple to make money in the golf busi­ness, but you have to work with some­one who un­der­stands the com­pe­ti­tion and the golf in­dus­try, be­cause you may have to change the busi­ness plat­form to make money.

There are prop­er­ties that aren’t listed, but still avail­able and there’s un­der­stand­ably greater in­ter­est in buy­ing a golf course in ar­eas/ coun­tries with a 12-month play­ing sea­son.

More so­phis­ti­cated buy­ers will tend to grav­i­tate to­wards pri­vate golf cour­ses be­cause there’s typ­i­cally a more de­pend­able source of in­come, as op­posed to daily green fees.

Ex­ist­ing ‘mis­man­aged’ golf clubs also al­low a new owner to come in and cre­ate value.The ar­eas that are the most de­sired by buy­ers (and gen­er­ally priced as such) are along the coast line.

Once a po­ten­tial prop­erty is iden­ti­fied, this starts the buyer down the road of due dili­gence, for both the fa­cil­ity it­self and the mar­ket.

Among th­ese con­sid­er­a­tions here would be if the course is in good work­ing or­der and if there are any crit­i­cal sys­tems like ir­ri­gation, drainage that need to be looked at then at­ten­tion would turn to the club­house and the over­all age of the prop­erty.

Then there’s the mar­ket it­self, are there plenty of golfers nearby?

Can real es­tate be de­vel­oped around the course?

Will it be po­si­tioned as a pub­lic or pri­vate fa­cil­ity?

Is there growth po­ten­tial or the op­por­tu­nity to sell mem­ber­ships? What can the course charge for green fees?

What does the com­pe­ti­tion in the area look like?

Those who do their due dili­gence up front and don’t make de­ci­sions based on emo­tion are the ones who tend to be suc­cess­ful.

As is so of­ten the case in real es­tate, it comes down to lo­ca­tion, lo­ca­tion, lo­ca­tion.

Golf course prop­erty isn’t what it once was — at least not right now.

Those in the in­dus­try will tell you that a golf course that was pur­chased for $5 mil­lion in 2006 would be worth about $3.mil­lion to­day.

Sev­eral years ago there were a lot of dis­tressed golf cour­ses for sale, to­day there aren’t as many qual­ity as­sets sim­ply be­cause own­ers that held on through the lean times are hop­ing it gets bet­ter.

Many are re­luc­tant to sell at this point. How­ever, there are still plenty of cour­ses up for sale if you know where to look.

Out of Bounds: Mur­phy walked his dog on the golf course ev­ery­day. One day Mur­phy was on his walk with­out his dog.

His pal Tom saw him and asked: “Where is your dog?”

Mur­phy replied: “I had to put him down”

“Was he mad?” asked Tom. “He wasn’t too pleased,” replied Mur­phy.

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