Tips on What to Look for When Buying a Golf Course
Featured alt: A person looking at golf clubs in a shop.
Tips on What to Look for When Buying a Golf Course
Buying a golf course can seem like a lucrative endeavor. Seeing that most golfers are middle to high-income people, you stand to yield quite a decent revenue. But, as you've likely guessed, purchasing a golf course isn't something you should take lightly. In this article, we will outline what to look for when buying a golf course and the key factors to keep in mind.
What to look for when buying a golf course
A golf course, in its essence, is a business. As such, it is important that you approach buying a golf course as a business investment. If the business factors related to the golf course indicate that it will be profitable, you should consider purchasing it. If not, you must be ready to drop this investment opportunity, regardless of its cheapness. Let's now take a look at the essential factors to keep in mind.
Why is the golf course for sale?
A golf course isn't a cheap facility to make. It takes months of research, construction, and development in order for it to see the light of day. Therefore, if you've stumbled upon a golf course for sale, you likely won't be its first owner. There is usually a reason why the previous management chose to put their golf course for sale. And, if you want to be responsible with your money, it is important that you find the true reason behind the sale.
The more you can learn about the history of the golf course, the better.
Alt: A golf course owner describing the golf course.
Mind you, the fact that a person is selling their golf course doesn't mean it isn't or couldn't be profitable. Some people plan on moving away. Others would like to retire. And some simply tire of running a golf course and would like to move on to something else. But, while all those reasons are valid, you mustn't buy the golf course under fall pretense and end up hemorrhaging your money.
How will you make it profitable?
The next thing to consider is making money from your golf course. Different revenue streams are available, and you need to outline which will likely yield the most considerable revenue. For instance, you can choose a private, semi-private, or public golf course.
It should go without saying that you need to have some pro shop for your golfers. The essentials like gloves, balls, and tees should be available to anyone in need. Of course, you can offer cart and club renting as an extra way to make enjoying your golf course easier, and if the golf course you are considering has all this, all the better.
Food preparation and storage
It is usually expected that the golf course will have some refreshments. Golfers will at least want a cup of coffee or enjoy a drink after a good day of golfing. Therefore, it is only natural that your golf course should have a bar. Almost all golf courses do, so we will assume that the one you are considering also has it. But, an essential factor to consider when buying a golf course is whether or not you will offer food. Food can be a significant factor in whether or not your customers will visit you and how long they will stay.
It is certainly a big plus when a golf course comes with a fully decked-out kitchen.
Alt: Professional cooks working in a professional kitchen.
Keep in mind that to sell food you will need extra facilities. You will run a restaurant besides your golf course, which is a large project. And know that while selling food can be profitable, it is not a fortune maker. The profit margin for food averages between 3-5. Also, remember that you will have to have special storage for food. Professionalmover.ca advises that you only use climate-controlled units and keep a close tab on all perishable food items. These units can be pretty expensive to install. So, consider whether or not you want to offer food.
One of the most important factors in whether or not a golf course will be profitable is its location. A well-situated golf course will naturally be drawn in golfers and see decent profits. If there simply aren't enough golfers in your relative vicinity, you'll have a hard time making decent revenue. Also, if there are already established golf courses to compete with, you likely won't come out on top. So, carefully consider the location of your golf course and the factors that can impact it. Things like:
- Weather conditions.
- Accessibility from major roads.
- Local golf trends.
- The number of potential golfers in the area.
A good idea is to look for golf courses situated in an area where fresh golfers have moved in. That way, you can make use of the golfing community while not having to compete with a local golf course. If you do need to compete, know that you will have to give golfers a good reason why they should choose your course over your competitors.
In order to know what to look for when buying a golf course, you need to consider what demographic is most likely to visit you.
Alt: A mother and a daughter playing golf.
If you haven't so far, we would strongly advise you to research and carefully estimate the running costs of a golf course. While you might have a ballpark figure in mind, you need to be as precise as possible in order to know how much your golf course will actually cost you. Keep in mind that besides simply paying for workers' wages and supplying your shops and restaurants, you also need to account for the following:
- Water, gas, and electricity.
Ideally, when looking for a golf course, you will prioritize those that have a well-kept account of their previous expenses. By using these, you can have a much clearer idea of what your golf course will cost you. You can then make the revenue estimate and see whether the golf course will actually be profitable.
By now, you should have a fairly good idea of what to look for when buying a golf course. As we said in the beginning, the crux of finding a decent golf course for sale is to analyze it as a business. The better you can do so, the more likely you are to see decent returns on your investment.
Here we will outline what to look for when buying a golf course and what mindset to have when you start looking for one.