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What to Look for in a Golf Course Appraisal

A golf course appraisal is a complex process that often means different things to different people. By definition, it is simply “the act or process of developing an opinion of value” or even simpler, “an opinion of value”. The appraisal of a golf course or golf club property is somewhat unique because unlike traditional investment real estate (office buildings, shopping centers, etc.) there are personal and intangible property components that are almost always included in any sale of a golf course or club. In addition, the appraiser is bound by the Uniform Standards of Professional Appraisal Practice (USPAP), which establish rules for how appraisals are done.

Membership Refund Liability

Among the more interesting challenges we encounter is the issue of membership refund liability. A membership refund liability is typically derived from a club having taken a deposit for membership which is repayable to the member upon either resignation or the 30 year anniversary of the membership. Often, there are conditions, such as the deposit only being refundable on a 4 or 5 members in to 1 out schedule or if membership is fully subscribed. If a member endures for the 30 year (or other designated) period, they get their money back as well.

Golf's Social Conscience and impact on Economics

The game of golf in America has evolved into many things. Traditionally a game for the elite, country club set, the American landscape was dotted with approximately 6,600 golf courses in 1960, of which about half were private. In 2016, according to the National Golf Foundation, there were approximately 15,000 courses, about 25% of which were private clubs. Though the relative portion of private golf is declining, there are still a similar number of private clubs as existed in 1960 with a considerably greater # of public-access facilities (3,200 vs. 11,000).

To many, golf is still perceived as an elitist pursuit. The current president has stated that he believes golf should be “aspirational”. In order for the game to grow and thrive its appeal needs to broaden.

GOLF PROPERTY ACQUISITION OPPORTUNITY

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GPA PRACTICE TEE

Some of our recent assignments include:

PA - Appraisal of Private Club & Excess Land for acqusition
NJ - Appraisal of Private Club for tax assessment analysis
VT - Feasibility Analysis of proposed ski-in, ski-out condo-hotel
DE - Marketing for sale private club (see above)

GPA president Larry Hirsh will be presenting to the New Jersey State Bar Association as part of a webinar on valuation for tax assessment of golf properties on December 19th at Ramblewood CC in Mt. Laurel, NJ. More details to come.

To order our award winning book, Golf Property Analysis and Valuation - A Modern Approach, click on the graphic above.

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