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Many golfers dream of owning a golf course, even if it’s not the most profitable investment available to them. While major corporations, management companies and investment funds continue to buy and build major resorts with golf courses and high-end country clubs, it is not clear if there is lots of money to be made in owning an individual golf course without some unique appeal to the property.

That is why there are three important steps to take before making the purchase: (1) doing your due diligence, (2) having an operations plan, and (3) finding and hiring an attorney for golf industry matters. This guide will discuss each step so you will be fully prepared.

With that fair warning, here is what you want to know about buying a golf course in Arizona before you tee off on the new purchase.

Due Diligence is Essential

Real estate is all about due diligence. Down payments are large sums of money and shouldn’t be taken lightly, which means that any wise aspiring golf course owner will take the time to conduct thorough research on every property they’re eyeing.  Great golf courses have so many moving parts and important additional due diligence requirements that you will need to build a team with experience in the industry.

Golf courses present their own unique set of variables to consider when researching, such as:

  • Grass types
  • Seed and fertilizer choice
  • Fuel costs
  • Labor costs
  • Equipment repair/replacement
  • Alternative fuel and water source availability
  • Climate

If you’re looking to buy a golf course in Arizona, there is less concern about seasonality and tourism than in other locations. In general, owners up north would likely enjoy busy summers while those in the Phoenix area would profit most from the winters—if at all. According to a National Golf Foundation survey of roughly 750 superintendents from golf courses around the country, roughly two-thirds of golf courses were not profitable. It’s certainly something to keep in mind and, frankly, not a great statistic for those looking to buy a golf course.

Uncovering why the golf course is for sale is an essential part of the due diligence process as well. This can be a deal breaker in some instances, such as issues with water access and grass quality.  There are plenty of valid reasons for selling that will present an opportunity for the next owner to maximize the course’s value. Water usage can be optimized, pro shop offerings can be shuffled for highest margins, grass can be swapped out for greater sustainability and much, much more. It only takes a savvy business mind and advice from a golf industry expert to turn a failing property into a thriving operation.

Have a Full Plan for Owning and Operating a Golf Course

It is one thing to have ideas about returning a mismanaged course to its former grandeur, but it another to execute a well-developed plan. Follow these steps to formulate your strategy before taking action.

First, you must confront the legalities. There are always copious amounts of paperwork in a property sale, so it is helpful to work with a law firm that specializes in golf course industry law in Arizona. Make sure all documentation is properly filed because golf courses are rife with potential for lawsuits. You should have an experienced attorney for the golf industry represent you in the acquisition.

Next, establish your revenue streams. Decide whether your course will be public with pay-per-day fees, semi-private or membership only. Many owners choose to operate private courses because the annual fees provide a steady income. Pro shops and restaurants/quick service counters are two other sources of revenue, as you can charge a premium on gear and food due to the convenient location. These two sites are also data mines because you can easily track which items are most popular and profitable and be sure to stock them accordingly.  There are often simple ways to increase on-course sales of food and beverages by adding access points and cart operators.

This ties into the guest experience, which is a vital part of your golf course plan. You must determine how to elevate your guests’ experience on your property for word-of-mouth marketing and customer lifetime. From golf management software that lets players book tee times online to the right analytics integrations, there are many options that help streamline the day-to-day. On site, it is equally important to have a strong and efficient team that maintains course quality, pace of play, great food and beverage options, and generally makes the course an enjoyable place to play.

Finally, set yourself up for continued success with a solid marketing plan that will retarget past visitors, attract new ones and convey the value of your golf course. Loyalty programs and online marketing are two ideas to get you started, but there is plenty of room to get creative.  As a fan of the game and a golf course owner, you will be in the unique position to grow the game with programs for juniors, veterans, disabled players and more.  Charity golf tournaments and fundraisers are generally popular and simply need someone to drive the initiative forward. These initiatives always serve as fantastic marketing for the host golf course.

Find an Attorney in Arizona with Golf Industry Experience

This blog is not investment advice and we aren’t advocating a golf course as a great investment, but we have attorneys that specialize in golf course laws in Arizona.  The attorneys at MacQueen & Gottlieb are ready to guide you through the process of buying, owning and operating a golf course in Arizona.  Contact us today at 602-562-7218 to schedule an initial consultation or make an appointment online.

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