Investing in Golf Course Real Estate
Since 2014, investing in golf course real estate has become an increasing trend. Though the Great Recession marked a low point for the golf course real estate market, investors have been showing an increasing interest for golf course investments across the entire country.
According to an article published by GolfDigest.com, “International money is a big part of it, with Chinese investors showing a special interest in California, Hawaii and the Washington, D.C., area,” (Course Correction). Many traditional real-estate investors, both across seas and nationally, have taken an interest in golf courses because of the potential large profits they can make. The article goes on to say, “Companies with ties to New York’s Fortress Investment Group, for example, recently bought about 100 courses from American Golf and another 48 from CNL Lifestyle Properties,” (Course Correction). When people invest in golf courses, they know there is a chance they can make around a 20–30% profit, or at least a profit in general.
The value of a golf course is another vital component in relation to investors gaining a strong interest in golf course investments. Most of the time, buyers will decide whether or not to make an official investment once they have figured out how much of a profit they will make each year. According to GolfDigest.com, “A typical buyer these days expects to earn about 10 to 11 percent a year on the investment, brokers and course appraisers say. To arrive at a good price, buyers divide a course’s annual profit by this expected return,” (Course Correction).
For more information about recent trends in golf course investing, please read GolfDigest.com’s article here.