When Capital Improvements are Truly NEEDED
Among the challenges we encounter with golf property valuation is the determination of when various capital projects are necessary and impart a significant impact on value.
During the past few months, we’ve been asked to provide appraisal services on several properties with dated irrigation systems and other components like cart paths, bunker drainage and even greens. The question always comes up about whether these systems require replacement or simply repairs, and when a buyer would presume that replacement were necessary, whether some repairs are necessary or whether the new buyer assumes he or she can “get by” with the equipment as-is. When the client is seeking a low value, like in a tax assessment appeal or if they’re buying, they suggest full replacement. When they want a higher value, like when they’re selling or refinancing,they say the system is “functional” and has lots of years left.
