America's Greatest Golf-Home Towns

Ready to live out your dream?
We've identified the leading places to buy golf-course property in the West.

By Peter Finch
Golf Digest
June 2006

Wake up and stroll out to this, your back yard. What will it be today--18 or 36 holes? For more and more golfers, this fantasy is becoming reality. The National Association of Realtors estimates Americans bought more than 1 million vacation homes in 2005, a record for the second year in a row, and golf was a deciding factor in nearly a third of these purchases. To help you focus your search for a golf getaway, we picked the best areas for golf homes in the western region. Using data from the Longitudes Group, a research firm specializing in leisure activities, we rated 244 counties from coast-to-coast on criteria such as the number of highly ranked courses, playable days per year, cost of living, off-course diversions and more. We gave equal weight to golf and non-golf criteria.

Best in State Rankings: 2007-2008

Golf Digest
May 2007

NEVADA

1. Shadow Creek, North Las Vegas
2. Wolf Creek G.C., Mesquite
3. Cascata, Boulder City
4. Montreux G. & C.C., Reno
5. Edgewood Tahoe G. Cse,. Stateline
6. South Shore G.C,. Henderson
7. Southern Highlands G.C., Las Vegas
8. Incline Village G.C. (Championship), Incline Village
9. Reflection Bay G.C., Henderson
10. Dragon Ridge GC, Henderson 
    
     

Golf-home hazards Beware these nine common real-estate mistakes Illustration: John Corbitt By Sarah Max Golf Digest June 2006 Ready to make an offer on a second home? Mind these potential missteps. Settling for a bad lot on a great course. "Just getting in a golf community isn't good enough," says Ron Suponcic, an agent who specializes in golf real estate at Horizon Realty in Venice, Fla. If your only view is of the neighbor's deck, your house won't appreciate like similar houses with views of the course, the water or both. Here's where golf property differs from traditional neighborhoods, where buyers might ignore views if the house is near good schools or offers easy commute access. "People who tend to buy in golf [communities] are very particular about what they want," Suponcic says. Buying too near the tee. You want views, but not if it means waking up to lawn mowers, loudmouths and breaking glass. Ideally, developers will design the course and surrounding houses to give buyers the best of both worlds. Still, no design is foolproof. Among other things, you should take note of the width of the fairways, the relationship of the house to obstacles and the distance from the tee box. Play the course to see where balls land and golfers congregate. Heeding advice from friends who have lived in the line of fire, Ron and Sue Konst of Northville, Mich., are building their vacation home in Florida's Pelican Pointe on the left side of the fairway, "away from slicers" and hidden behind a water hazard and a bunker. "It's about the best situation you could hope for," says Ron. Committing to a course you don't love. A single round isn't going to cut it. Play a course several times before buying property in a golf community. "You've got to believe that it's going to stand the test of time," says Alex Chang, an avid golfer and COO of EscapeHomes.com, a website that specializes in vacation property. Signs that you might tire of the course quickly: posting one of your best scores ever the first time out, or noticing that you use only three or four clubs the entire round. Find out if there are plans to change the layout of the course or expand, says Chang. See, too, whether you'll get reciprocal privileges at other courses in the area. You might be smitten with the course now, but it's good to keep your options open. Not being nosey enough. The adage about good fences making good neighbors might apply in your old neighborhood, but in golf communities it's a different story, and not just because fences are often prohibited. If you don't click with your neighbors--or worse, if you clash--your vacation house will be all house and no vacation. Before you buy, spend some time at the clubhouse, the pool and other gathering spots getting to know your would-be neighbors, suggests Jolita Barry, an agent with By Appointment Only Realty in Palm Coast, Fla. Buying in the boondocks. Unless you have a private jet, unlimited free time or a collection of vacation houses, don't buy a second home that is so far out of the way you won't enjoy it. "People often end up not using their vacation homes as much as they thought because it's just too much of a haul to get there," says Chang. Before you start house hunting, travel to the destination two or three times to make sure you can tolerate and afford the flight or drive. According to the National Association of Realtors, buyers typically shop for vacation properties within 200 miles of their home. Speed-reading the rules and regulations. If you can't live without your life-size collection of garden gnomes or giant college-football flag, rethink your dream of living in a golf community where the list of do's and don'ts is inches thick. First scrutinize the rules governing your property--which will likely dictate everything from the color of your siding to the size of your hedges. Then look into the protocol for the course itself. Can you walk it? Is it open year-round? How early can you book your first tee time? "Deed restrictions are consistently more strict in golf communities than in other private communities," says Suponcic. "In my opinion that's a good thing because it maintains the value of your property." Illustration: John Corbitt Neglecting to add up all the fees. The mortgage might be the least of your concerns when you buy into a golf community. Common fees include homeowners-association dues, membership fees, social fees and monthly food minimums. You might also get hit with special assessments for anything from replacing the front gate to renovating the clubhouse. Before you get your heart set on a house, factor these fees into your budget, suggests Doug Fischer, an agent with Coldwell Banker in Palm Desert, Calif. To avoid surprises, find out how much the association has saved for various expenses and whether any unfunded improvements are on the calendar. Counting on rental income. Rental income is a great way to offset the costs of a second home, but before you assume you can rent out your house most of the year, you'll need to do some research. Many communities forbid short-term rentals or limit them to twice a year. Next, consider the logistics. Who will manage the property when you're gone? You could hire someone, but if your house doesn't have a private pool, social membership and tennis membership, it's a tough sell, says Fischer. The final hitch: "If you're planning to be at your house during the prime weeks of the season," says Steve Laver, president of Storied Places, a developer of golf and ski properties, "you'll have to choose between renting it out during the high season or using it yourself." Assuming everyone is ga-ga for golf. When house hunting, give yourself time to check out nearby restaurants, shops and other attractions. Unless you're looking in an area that's known almost entirely for its golf, you need to make sure golf isn't the only attraction. This is important to renting out the house, selling it down the road and getting the most out of your vacation in the meantime. "The best investments are in places that offer something year-round," such as skiing and golf, says Chang. Sarah Max is a freelance writer specializing in real estate and investing.

How much golf home can you afford?

Find out by getting a handle on the expenses, big and small, that come with second-home ownership

By Amy Gunderson
Golf Digest
June 2006

It's a scenario familiar to anyone who plays the game: You return from a golf vacation and immediately start thinking how great it would be to go back to the same wonderful place a few times a year--or even a few times a month.

Is this the year you do something about it? Are you ready to buy your very own golf course getaway? We've got what you need to know about financing the purchase, securing insurance, becoming a landlord, and dealing with taxes. We'll also help you navigate the expenses, many of them unanticipated, that accompany ownership in a first-rate golf community.

How will you pay for your property? At the toniest clubs, management seems almost unfamiliar with the concept of financing. "Our experience is that owners pay cash for their homes," says Phil Edlund, president of Las Campanas, a community in Santa Fe, N.M., with two Jack Nicklaus-designed courses and 1.5-acre home sites starting at $250,000. But most second-home buyers finance at least part of the purchase. As long as you don't plan on earning some extra cash by renting out the property, there isn't much difference between mortgage rates on a loan for a primary or secondary residence. Mortgage lenders eye investment properties as more risky ventures, so loan rates are typically three-eighths to half a percentage point higher than a standard mortgage.

New to the mix of loans is the reverse mortgage, which allows those 62 years and older to tap the equity of their primary home without the drag of a monthly loan payment. These loan products have soared in popularity over the past year, says Keith Gumbinger, a vice president at HSH Associates, a loan-information provider in Pompton Plains, N.J. When you sell the primary house or pass away, the bank gets its money back, plus interest. The downside: The loans often come with hefty fees.

A home-equity loan is the more traditional way to use the current value of your primary home. The good news is that interest on home-equity loans is deductible on loan amounts up to $100,000. However, home-equity loans today carry interest rates more than 1.5 percentage points higher than a typical 30-year mortgage.

In addition to homes and condos, many golf communities are selling fractional ownerships. Seven Canyons in Sedona, Ariz., has one-tenth shares of 2,500-square-foot, three-bedroom houses for $425,000, and at Pronghorn in Bend, Ore., you can buy one-sixth of a two-bedroom home (plus den) for $254,500. Big lenders have so far steered away from financing these properties, partly because there is a sense that fractionals carry higher risk. Although fractionals are deeded ownership, a lender can't go in and repossess a tenth of a house. Instead a developer might offer its own in-house financing or refer buyers to a smaller lender specializing in this emerging market, typically at slightly higher rates.

Are you landlord material?

Working out the financing for a vacation home is only part of the challenge. When tax time rolls around there are a host of things to keep in mind, especially if you are a landlord. The key word is "usage." As with your primary home, you can deduct mortgage interest and property taxes on one vacation home regardless of whether you rent out the property or use it only for yourself. (You can deduct property taxes on more than one vacation home, but not mortgage interest.) And get this: If you rent out the property for 14 days or less each year, Uncle Sam gives you a break and you don't even have to declare that rental income.

Now here's where it gets tricky. Say you rent out the house more than 14 days a year and you also use the house yourself for more than 14 days in a year or 10 percent of the days it was rented out. In this case you have to report the rental income, but you can also take a number of deductions. "Any expenses associated with investment property would be deductible," says Mark Luscombe, principal tax analyst at CCH, a tax-information publisher. "Not only can you deduct the mortgage interest and real estate taxes as you do with a primary home, but also a portion of the homeowners-association fees and money spent on decorating the house and making repairs."

Let's say you are more landlord than resident. You rent out the house for more than 14 days but use it yourself for fewer than 14 days or 10 percent of the days the property was rented out. In that case you get all of those tax deductions and another benefit: You may deduct any losses on the house, if the expense of renting out the property exceeds the rental income.

Gordon Johnson of Lafayette, Calif., falls into this last category. He and his wife, Diane, have a two-bedroom house overlooking the ninth hole of the Jack Nicklaus private course at PGA West. They rent it out for three months of the year, earning about $16,000. But their expenses come to about $37,000 a year. By limiting their time in the unit to fewer than 10 percent of its rented days, they're able to consider themselves landlords--and deduct an annual loss of roughly $21,000 a year. If they want to spend more time at PGA West, they'll rent from friends rather than stay at their own place. True, it's bit of a hassle just to get the tax break. But Johnson isn't complaining. He estimates the house has doubled in value since he bought it three years ago.

Like the sound of that? Before you buy any income property, spend some time investigating the market. In some areas the rental season is limited. Renters flock to the Southern California desert from November through April, but in the summer it can be nearly vacant. Georgia's Ford Plantation, by contrast, attracts visitors year-round. Regardless of where you purchase, lenders generally take into account only about 75 percent of the estimated rental income when evaluating your application.

Beyond making mortgage payments, you might see a larger-than-expected chunk of your budget going toward insuring your second home. Insurance companies have always been slightly wary of second homes, partly when they are empty for a good portion of the year. But the good news is that houses in gated, secure golf communities eliminate at least part of the risk in the eyes of insurers. (To see average insurance costs by state, visit the Insurance Information Institute's website, iii.org.)

Fee options

Ownership costs go well past taking care of that roof over your head. There's your membership, for one. Some communities require owners to purchase a full golf membership, but others have lower-priced options that give you access to golf with a few limitations. A golf membership at Las Campanas in Sante Fe, valued at $90,000, is priced into home lots. If a buyer isn't interested, the price of the land is reduced by $30,000 in favor of a social membership. Lake Las Vegas Resort has tiered levels of golf and social membership ranging from a $21,000 initiation fee with $235 monthly dues all the way up to a $175,000 membership that carries monthly fees of $858.

When John Dee bought his 3,000-square-foot lakefront home in Florida's Bonita Bay four years ago, he opted for an $11,000 social membership over the $130,000 full golf membership. Instead of yearly fees of $8,000, he pays just $600. He can play as much as he wants April 15 through Dec. 31, but for the rest of the year he either plays as a guest of other members or hits other area courses. Considering how much that full membership fee would generate in an account earning 5 percent a year, he's happy with the tradeoff. "It would take a lot of golf to offset that," says Dee.

Besides golf fees there are homeowners-association dues, covering maintenance and insurance on common areas and the cost of keeping the community looking good. These vary from more than $400 a month in some Lake Las Vegas communities down to just $100 a month at the Club at Spanish Peaks in Big Sky, Mont. Some neighborhoods face additional charges if they have extra landscaping or their own entrance.

These fees don't disappear with fractional ownership. PGA West's new fractional development offers one-ninth slices of ownership with a minimum of three weeks' usage during the prime season between October and April for $259,000. Though owners may use the property for less than a month each year, homeowners-association fees total $1,100 a month.

Don't forget the cost of maintaining the house itself, something many part-time residents hand off to property managers. At Lake Las Vegas, weekly house checks run $125 a week, yard maintenance goes for $150 a month, and stocking your fridge costs $30 an hour. If you're hiring an agency to handle renting the property, too, expect it to take a 30 percent cut of the rent.

Looking at all those costs, it might be easy to decide the whole thing is too expensive. But don't forget that original appeal of owning prime golf real estate. When Harry Bassford bought a three-bedroom house at Bay Hill Club in Orlando in 1999, he admits the $235,000 price tag was more than he planned on spending. Yet he has seen comparable homes sell for $700,000 today. Not only does the first hole of the course make up his back yard, but so do some of the legends of the game. "Arnold Palmer is a member, and he's there just about every day. I played golf with him once," says Bassford. "I don't think anyone can top that."

Amy Gunderson is a freelance writer specializing in real estate and investing.