Construction of a golf course – a guide for investors

Construction of a golf course – a guide for investors
Jude Cooley
It takes approx. 5 minutes to read this article

If someone is thinking of investing in the construction of a golf course, they should analyze some fundamental issues, determine the risk, profitability and what they want to achieve. For under the very name of “golfcourse” there are at least several types of areas designed for golf. Analyzing the construction and investment in each area is material for writing a book, so this article will focus on building a full-size championship 18-hole course.

What needs to be considered when building a golf course?

Let’s assume that we already own a beautiful tract of land located in an attractive location – this is the starting point. Then we hire an architect. How much can it cost? The project made by a decent architect affiliated with the Association of Golf Course Architects may cost several tens of thousands of dollars. The best professionals in this field count even more than a million dollars – for the project alone! An additional issue is the author’s supervision, which costs up to several thousand dollars a day.

Having the project done, we can move on to construction. This is probably the most complex process, which can not be clearly estimated. If you are building a golf course in Poland, you have to reckon with the fact that it will be difficult to find a reliable company on our domestic market because there are few specialists in golf course construction. A good solution seems to be hiring a foreign company, but the barrier of formal issues can be a big impediment.

Hiring a foreign company that will agree to perform construction supervision can cost us between $200,000 and $300,000. On top of that there are all the other formal and legal factors such as building permits, expert reports, legal advice and insurance. In the meantime, we will also have to pay property taxes all the time. Regardless of how many additional elements are to be placed on our field, in the form of ponds or streams, we have to reckon with the cost of 1 to 1.5 million dollars. Of course, everything must be done to the standards set by the United States Golf Association (the national association of golf courses, clubs and facilities).

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The golf course is ready. What next?

Once the construction of a golf course is completed, there are further costs. This is because you cannot start using the course on the march. The first year after construction is the period for maturing all the green areas on our course. Already then you need to think about employing appropriate staff, purchasing machinery, fuel, tools, fertilizers, plant protection agents, as well as building a workshop and a garage with a minimum area of 200-300 square meters. So, not only that the first year after construction of our golf course will not bring any income, you will have to pay more and more. Total from tens of thousands of dollars a year upwards.

Another issue is the clubhouse. It is best to start building it when the course is maturing. A lot of people get carried away with their imagination and ambitions in this area. After all, it is the showcase of the entire golf course. However, regardless of our tastes, we need to allocate for it from 150 to 500 thousand dollars. Let’s not forget about the access road and at least partial fencing of the plot.

The last issue is finding employees. Finding a head-greenkeeper or a club teacher with experience in Poland may prove to be a difficult task. Bringing in professionals from abroad is another cost. Betting on native staff in the form of graduates of agricultural universities may involve a great risk, because they will certainly need time to learn everything.

Building a golf course – is it profitable?

KPMG conducted a 2014 study entitled: “From North Cape to Cape Town. Golf Course Development Cost Survey 2014 in Europe, Middle East and Africa”, on the basis of which it calculated that building a golf course consisting of 18 holes is an investment of 4-5 years on average, which will consume nearly 6 million euros. The annual cost of maintaining the course is several million zlotys.

Whether such an investment pays off depends mainly on the wealth of the investor and appropriate planning of the entire project. A well-equipped golf course, located near urban agglomerations, with good access and high quality of green areas, is able to earn for itself. Much will depend on whether we can attract potential sponsors. As you can see, there are a whole lot of variables to take into account here, but if you don’t take the risk, you’ll never know if it was worth it.

Featured photo: Freepik

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