Golf Course Appraisal By Jacob Gonzalez

Appraising different types of properties can be a complex thing. One of the most complex appraising jobs is that of a large business. Golf courses and country clubs fall under this category, along with other specialty properties. They encompass homes, recreations, and business aspects. Because there are so many components involved in a golf course, appraisers must appraise the components separately. The three elements include real estate, personal property and business (The Gorman Group, 2006). Each of these categories has their own influence on the business so they must be analyzed on their own levels during appraising.



Adding to the complexity of this job, golf courses can be distributed into three separate categorical types; the categories are regulation courses, executive courses, par-3 courses, learning centers, and driving ranges (The Gorman Group, 2006). Each type of course can either be publicly owned or privately owned. Furthermore, something that should always be taken into consideration when conducting an appraisal is the purpose or goal of the property; some potential purposes for developing a golf course include “stand-alone, resort, mixed-use, retirement community and residential development” (The Gorman Group, 2006). Some courses were only constructed to transfer values between adjoining lands. This can mean that the developer’s main priority was not only to generate revenue through the golf course but also to increase the value of the land surrounding it.



According to Glenn Rigdon’s article on golf course appraisal there are three methods that can be used in order to assess the value of golf courses. These three approaches include sales, income and cost (Rigdon, 2008). The first approach, sales, also referred to as the market approach is conducted by analyzing the qualitative adjustments of the course. “Appraisers usually select the price per hole as the unit of comparison in golf courses appraisals and not the total purchase price” (Rigdon, 2008).

On the other hand analyzing the cost aspects of the golf course can be a good technique of analysis when appraising golf courses or country clubs. This is when the depreciation value of the club as a whole is measured by assessing market data. Then the value of the land and business are evaluated and then added to the depreciation value to acquire the market value of the course (Rigdon, 2008).



Lastly, in the income approach appraisal can be obtained by measuring the income the property may generate. This is done with projecting and forecasting potential worth. An appraiser can use either “gross or monthly income with applicable market multipliers or may entail complex discounted cash flow analyses capitalized at market-derived rates” (Cyber Golf, 2008). This is usually the method of choice for appraisers who specialize in appraising golf courses.

Lack of sales of golf courses in the industry is one major difficulty in appraising these types of properties. This creates a deficit in number of comparables. As you can see appraising property like a golf course can become quiet a complex task. Not just any appraiser can do this effectively and efficiently. All factors must be taken into consideration when appraising specialty properties. And don’t forget to appraise the specialty property as vacant, as improved, and as in a different use.

References

Cyber Golf. (2008). Is poor management an excuse for higher golf course property
taxes? Retrieved from http://www.cybergolf.com/golf_news/is_poor_ management_.html

Rigdon, Glenn. (2008). Golf course appraisal 101. Retrieved from
http://www.appraisalarticles.com/articles/110/1/Golf-Course-Appraisal-
101/Page1.html

The Gorman Group. (2006). Golf course appraisals. Retrieved from
http://www.gormangrp.com/golf_course_appraisals.html.