Full Answer
What do comparable sales tell us about the value of golf property?
Comparable sales can tell us a lot about the value of any golf property. However, it is imperative that appropriate units of comparison (GRM in today’s world) be used and that relevant (truly comparable) sales be analyzed in each case.
What are the trends in the sale of golf properties?
Our research included nearly 200 sales of golf properties in about 20 states which occurred in the past 5 years. The trends are enlightening. Sale prices don’t show any appreciable trends. They seem to move up and down significantly enough that no stable trend can be identified.
Is buying a golf course a good investment?
There’s one golf course brokerage firm that publishes findings every year on the average sale price of golf courses for the past year. Buyers of golf courses, especially the more active ones will often quote a gross revenue multiple that coincides with their investment objectives and desires.
Why do we do golf appraisals?
What these transactions tell us provides appraisers and market participants alike the ability to compare sales of different golf facilities on the basis of a common denominator that helps the market determine value and those of us that do appraisals reflect their behavior in developing our opinions of value.
How do you evaluate a golf course?
As with most property types, golf courses can be valued via the income approach, sales approach, or cost approach. Each method has its limitations. Given the specialized nature of golf course properties, the application of the comparable sales approach is preferred.
What is the average revenue for a golf course?
According to the National Golf Foundation's 2010 Operating & Financial Performance Profiles of 18-hole golf facilities in the U.S., private 18-hole golf clubs had average total revenue of $3,277,000 in 2009, but with total expenses of $3,204,500.
How do you conduct a business on the golf course?
Don't worry; here are seven tips to successfully conduct business during a round of golf.Keep the play fun. ... Remember golf etiquette. ... Save the alcohol for another time. ... Dress to impress. ... Know when to get down to business. ... Take lessons.
Do golf courses actually make money?
The most common income streams are green fees, membership fees, pro shop sales, and food and beverage sales. While increasing membership fees or green fees might seem like a good way to increase revenue, it might put off more golfers than the additional income earned.
What percentage of golf courses are profitable?
On an encouraging note, Sageworks' data show that even though golf courses have negative margins, they have strengthened steadily since 2008, when the average net profit margin was about -9%.
What is the profit margin on golf clubs?
After all expenses, the best golf retailers rarely profit more than 2-3% of the total cost of a club. However, as a whole, we can say that around 33.33% of the cost of a golf club is the markup from the retailer.
Is business done on the golf course?
Huge Potential for Business & Networking It's no surprise that a lot of business is done on the golf course. Golf provides the player with an enormous opportunity to build a huge network of friends. You could also call it “golf networking”. From those small circles, you can get to know more and more people.
How can I make my golf course successful?
Offer Online Tee Time Booking. Online tee time booking is more important than ever. ... Look at Third-Party Booking Outlets. ... Offer Varying Golf Course Membership Options. ... Add a Loyalty Program. ... Use POS Reporting and Analytics. ... Automate Ordering and Inventory. ... Host Golf Events and Contests. ... Add Time-Based Discounts.More items...•
What do you talk about on a golf course?
Tailor these ice-breaking questions and start making connections the next time that you are on the course:How long have you been golfing?How often do you golf?Have you played here before?If someone is a first-time golfer: What made you decide to give golf a try?What do you do for a living?More items...•
How many acres do you need for a golf course?
“This means an 18-hole course of all short par 3s could be built on as little as 30 acres, while an intermediate length or executive course of 18 holes of par 3s and 4s would require 75-100 acres, and a full size par 72 course would need 120-200 acres.
How many gallons of water do golf courses use?
In California, an average 18-hole golf course sprawls over 110 to 115 acres and conservatively uses almost 90 million gallons of water per year, enough to fill 136 Olympic-size swimming pools, said Mike Huck, a water management consultant who works with golf courses statewide.
How does golf generate money?
Golfers get paid so much because of sponsorships and tournament funds that are allocated to the tournament purse. Because of the attention to professional golf and the participation of brands and fans, there is quite a bit of money to give to the top players.
What should I do at the end of a golf survey?
At the end of your golf course survey, you should give your customers an open section that gives them the opportunity to talk about anything that wasn’t covered in the other questions or explain an answer that they gave. Open-ended questions aren’t the best for any kind of mathematical analysis, but reading through them can give you some qualitative insights on why your customers feel the way they do.
How long should a survey take?
People are busy, so making a survey that looks like it’s going to take an hour to fill out will turn people away. Keep in mind that you’d much rather have someone take their time to complete a 3 minute survey rather than rush through a 15 minute survey. The time budget that you face when creating a survey means that you’ll need to make the most of each question that you’re asking. Instead of asking questions that you’re curious about, you need to think about questions that can lead to actionable insights. Every question needs to have a purpose or end goal. The best way to do this is to start by figuring out what the end goal of the survey is first and then designing the questions based solely on achieving that goal.
1. Plan an Exit Strategy
One of the first steps to selling a golf course is deciding how you will exit the business.
2. Prepare Your Paperwork
Once you’ve planned how you will exit your golf course business, you should begin preparing your paperwork and organizing important documents. A majority of serious buyers will want to review everything from tax statements and inventory to contracts and more.
3. Acquire a Professional Valuation
Though you may have an estimated price in mind, the most reliable way to obtain an accurate valuation is through a business broker. It’s very common for an owner’s emotional attachment to cloud judgment when determining a realistic price.
4. Prepare Your Golf Course
Before placing your golf course on the market, make sure everything is in order and ready for potential buyers. Take your time to seek out any potential issues with your golf course and develop an actionable plan to address any flaws. Be sure to assess your:
5. Contact a Business Broker and List Your Golf Course for Sale
After completing all the preparation steps, it’s finally time to list your golf club for sale. If you’re interested in selling your golf course independently, consider utilizing well-known websites and investing in marketing efforts to help advertise your business.
John Davies
After obtaining his MBA, John began his career at PriceWaterhouseCoopers, the international accounting and consulting firm, and subsequently joined Progressive Corporation, a large U.S. based insurance company. John was a Division President at Progressive and subsequently became the CEO of a New York based private equity investment company.
Pricing
We’ve observed that unrealistically high pricing is the quickest way to have a golf property sit on the market forever. Most buyers are economic buyers and with the plethora of golf properties on the market, those that are grossly over-priced are passed over for better opportunities.
Records
Many daily fee golf courses are family run, “cash businesses”. As such, it is not uncommon for financial records to be less than accurate. If all the revenues can’t be accounted for, as the seller you won’t be credited for them when you sell the property. Nobody will pay you for a “wink of the eye” and the potential that you haven’t realized.
Documents
Make it easy for your buyer to do their due diligence. It will save both of you time and money. Have and make available to your broker everything they need to ensure that a transaction evolves smoothly.
What are some of the methods buyers and sellers employ to complete a transaction?
Some transactions require creativity. If bank financing isn’t available, other means may be necessary. Installment sales, private equity and participation are just some of the methods buyers and sellers employ to complete a transaction. Every seller’s situation is different.
Is timing important in golf?
Always a big part of any transaction, timing is of considerable significance given the seasonal nature of most golf operations, the considerable amount of due diligence necessary on the buyer’s part and maybe most importantly the objectives of buyer and seller.
Do sales prices show any trend?
Sale prices don’t show any appreciable trends. They seem to move up and down significantly enough that no stable trend can be identified. A few very high priced or low priced sales can impact the statistics too much for reliable use.
Can a hobbyist buy golf properties?
Above all else, this tells us that economics largely drive the purchase of golf properties. Yes, there is the occasional “hobbyist” that can afford to and wants to buy golf properties, and there are other metrics besides GRM.
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