You are looking through Boca woods real estate listings in Florida when you come across an appealing home or condo that is attached to a nearby golf course. The most attractive aspect is the cost. One single dollar in total. You are aware, as is only natural, that there is a catch.
The terms and conditions? Additionally, the buyer is required to pay the country club’s membership fee of $70,000 as part of the transaction. However, despite the increased cost, it is still competitive with homes of a similar nature that do not belong to a country club. Is purchasing it a wise financial move? The majority of people are clueless when it comes to country club properties.
How Golf Impacts Country Club Properties
With over 1,100 golf courses across the state, Florida is the golf course champion. Regrettably, the sport reached its pinnacle about 1990. Golf has been losing players since heavy metal, VCRs, and dial-up internet were all the rage.
According to 2010 research by the National Golf Foundation (NGF), between 500 and 1,000 public golf facilities throughout the country are anticipated to disappear within the next five years, according to the Biscayne Times. Many country clubs are presently offering low-cost condominiums for sale.
Savvy investors look for opportunities in overbuilt industries, and you never know what you’ll discover among the shards of shattered glass. Simply be ready. You could have to keep country club properties despite paying charges that wouldn’t apply to other homes.
There’s some positive news to report. In 2016, Golf Digest said in an article on a recent NGF research that “the number of starting golfers climbed to 2.5 million, an almost 14 percent raise over 2015.” “That number is an all-time high, beating the previous record of 2.4 million established in 2000 when Woods was on the rise,” they stated.
The message is that if you come upon a hidden gem of a house, you might be able to make a profit. Just make sure you’re aware of the benefits and drawbacks before making a decision.
The Advantages of Buying a Country Club
You Have an Inside Track
Do you play golf on a regular basis? Have you won any doubles tournaments? Did you sign a contract for your lunch? You have an edge if you responded yes to any of these questions.
Real estate in Florida is competitive. If you already appreciate the country club lifestyle, look into the industry. Increase your social circle. Speak with other club members. Even better, go to a variety of clubs. You’ll learn about homes that are soon to be listed as well as the hidden issues with those that are already on the market. You’ll learn which clubs are thinking about offering discounts and which keep the majority of their initiation charge after resale.
Visiting other clubs can give you a good notion of what they have to offer. Check to see if the course is well-kept and if any additional desirable features are available. You could even meet an owner who is thinking about selling. If you have a large cash reserve, this may be a fantastic chance.
Sector Losses Affect Everyone
Florida golf facilities are declining as an industry. According to the NGF, 16 of Florida’s 1,029 golf courses closed in 2015, while four opened. Sector decreases influence even the most prestigious buildings. This provides you with a purchasing chance.
Remember that, all else being equal, you want to choose the greatest club property in your price range.
Development Potential
Every golf course does not remain a golf course. Golf facilities in South Florida are progressively being converted into home projects. A developer has suggested converting the 140-acre course at Margate’s Carolina Club into a housing development with 350 single-family homes and townhouses.
This transition is difficult for long-term owners. They’ve lost more than just the links; they’ve also lost a point of view. Except for coastal residences, most South Florida estates have a view of the street and neighboring yards. Green area is uncommon.
Strangers are frequently spotted in Carolina Club homeowner James Weishar’s property capturing stunning sunsets. “I’m not happy,” he told the Sun-Sentinel. The traffic flow will be disastrous. It’s going to be a disaster.”
For you, the conversion of the back nine into single-family homes is an opportunity. Those long-term condo owners may be eager to sell. Buying an older apartment and investing in interior and exterior refurbishment might pay off. Pricing less than new homes may provide an appealing option to potential purchasers.
There Are Disadvantages, Too
Risky Return on Investment
It’s easy to understand why remodeling your kitchen has such a high return on investment. It doesn’t matter if potential buyers are more Chef Boyardee than Chef Bourdain when they see the house. They rapidly construct ideas for the innovative foods they’ll soon produce when faced with brand-new cabinetry and appliances.
In the Sunshine State, pool installations are significantly less dangerous, but they still rank low on any return-on-investment ranking. Buyers who don’t want to cope with the upkeep expenditures are put off by watery holes in the ground.
It’s simple to understand how paying thousands of dollars for a club membership might have a negative influence on your financial situation. For starters, you’ve narrowed your target demographic. Even seasoned golfers may be put off by the cost, while devoted hackers recognize that a low-priced condo combined with a high-cost club membership equals packed links.
Non-golfers can be persuaded by other facilities or even a beautiful location, but most purchasers will balk at the price. In addition, there’s always the possibility of a stray ball slamming through your window.
Associated Costs
It’s never a smart idea to expect a property to sell quickly. Knowing how much you’ll have to cover each month is part of being prepared. If you buy a country club condo, you’ll have to pay membership fees in addition to the standard HOA fees, debt service, homeowners’ insurance, utilities, and property taxes.
Don’t forget about other expenses like CDD fees, an annual food and beverage minimums, annual trail fees (if you own your cart), and special assessments.
Rental Rules
Renting out your country club condos while you wait for your investment to increase is a tried and true approach, but renting a country club condo comes with its own set of issues. Non-owner-occupied houses may face limitations, just as they do in other projects.
You’ll also have to deal with membership concerns. It’s possible that the membership you got when you bought it won’t transfer to your tenants. Once you’ve found a renter, expect to pay further costs.
Cash Only
Finding a condo for a few thousand dollars, or even a few dollars, may appear to be a jackpot win. And it’s possible if you’re a cash buyer. However, although you might be able to acquire a loan for an investment property, you won’t be able to get one for a $70,000 membership.
“You can’t finance that,” said Century 21 Tenace Realty sales manager Henry L. Kaplan. “Cash is required.”
