There are two ways that a vacation golf home can pay you back –- and then some. One, of course, is if you choose the right market at the right time and your property increases in value until it comes time to sell. The other way is if you choose a vacation home in a location favored by other vacationers who are willing to pay a nice percentage of your carrying costs to rent it from you. You really hit the jackpot if you can accomplish both.
        Count me as a skeptic on the issue of whether a vacation home can ever really pay for itself on an annual basis. That is because you pay taxes, homeowner fees, insurance and maintenance costs on your property in order to make it rent-worthy, and those expenses bite into your net income. And if you are an absentee landlord, you will need to hire a local or on-site agency to clean up your home after each renter departs. Those agencies will typically charge anywhere from 25% to 40% of your rental fee, turning $1,000 per week in revenue into as little as $600.

Myrtle Beach tops list for return on investment from rental income
        Still, if you want to own a vacation for your own use a couple of weeks a year and defray the costs of a mortgage, then your best bet is to choose a market consistently favored by other vacationers, preferably during most months of the year. And for coastal-located golf homes, no market fits that description better than does Myrtle Beach, SC, according to a recent study by vacation rental property managers Vacasa that was published in last Sunday’s New York Times’ Real Estate section.
        The Times used capitalization rate, or cap rate, to determine which of the Vacasa markets was home to the most profitable rental properties. The higher the cap rate the more profitable the property. Ocean Shores, WA, more beach than golfing destination, and Myrtle Beach, a supermarket of golf courses with excellent beaches, tied for the top spot with cap rates of 7.4% each. The average rental property in Myrtle Beach sells for $249,000, which means that such a property –- I rounded off to $250,000 -- returns on average $18,500 per year in net rental income (what is left after expenses).
Condos like this one in Pawleys Plantation, south of Myrtle Beach, are popular among vacation renters, with golf on site and a beach just six minutes away.
        The cap rate does not factor in the cost of a mortgage; purchasers who can pay all cash for a property will make out better. Those who require financing will have to work the calculator a little harder, but can still count on at least paying for much of their carrying costs with rental income. Keep in mind, though, that some Myrtle Beach properties are located in designated flood zones, and Federal flood insurance –- which coincidentally covers up to $250,000 in structural damage -- can cost into the thousands of dollars each year. And you never know when the hot water heater might go and require an expensive replacement. On the other hand, if you maintain your vacation home as a business (see below), you can deduct certain expenses from your income taxes.
        Understand that if you intend to “profit” through the rental of your vacation property, you will be limited in terms of how often you and your family members and friends can use the home for “personal” (vacation) purposes. The business web site Kiplinger has a tight explanation that is worth reviewing: “If you limit your personal use to 14 days or 10% of the time the vacation home is rented, it is considered a business. You can deduct expenses and, depending on your income, you may be able to deduct up to $25,000 in losses each year. That's why many vacation homeowners hold down leisure use and spend lots of time "maintaining" the property; fix-up days don't count as personal use.”
        The almost $6,000 delta between what a $250,000 Myrtle Beach property can generate each year and the carrying costs on a mortgage is persuasive. (In theory, more expensive homes could return even more.)  So too is the ability to deduct necessary expenses. Other golf-friendly coastal areas worthy of consideration on a cap rate basis are Panama City, FL ($419,900, 6.1%), Gulf Shores, AL ($409,900, 5.8) Ocean City, MD ($285,000, 5.4) and Cocoa Beach, FL ($339,000, 4.7).

        The back nine at Bethpage Black on Sunday confirmed something about top golfers and rank amateurs as well: Half-glass full golfers win, and half-empty types come close, when the pressure is on. Brooks Koepka looks as if he is always going to win, even when he wobbles, as he did late on Sunday afternoon. Dustin Johnson never looks as if he is going to win, even when fate – and an opponent -- hand him an opportunity on a silver platter. Call it killer instinct or positive thinking or just plain confidence; Koepka has it, Johnson does not, in spite of his awesome golfing talent.

Six strokes...and then there was one
        Within just a few holes, Koepka’s seemingly invincible six-stroke lead over his only competitor, Johnson, nearly evaporated, leaving them separated by a mere stroke with a few holes to go for Johnson (and one more than that for Koepka). Make no mistake about it, Johnson played great golf, perhaps the best round of the day given the afternoon winds that seemed especially to bedevil Koepka off the tees. But almost from the moment Johnson learned he was a miraculous single-stroke away, the momentum shifted for him; he missed a makeable putt for par on 16, and one could not avoid the feeling that we had seen this movie before.

Choke holds in the majors 
        Indeed we had, most notably in 2010, 2011 and 2015. In 2010, Johnson entered the final round of the U.S. Open at Whistling Straights with a three-stroke lead. During that round, he grounded his club in a bunker that was not clearly marked, incurred a two-shot penalty and shot 82. 82! – going into the final round of a major championship with a sizable lead. At the 2011 Open Championship at Royal St. George’s, Johnson was in contention on the back nine, just two shots behind Darren Clarke, as the American stood on the par-5 14th hole. After a nice drive, Johnson pulled out a 2 iron in the fairway and pushed it so far right it sailed out of bounds to end his chances for the British title. (He double-bogeyed the holed, something big hitters should never come close to doing on a par 5.)
        But the most notorious collapse was that Sunday in 2015 at Chambers Bay in Oregon when a 12-foot putt to win the U.S. Open turned into a three-putt loss. Folks, this isn’t you or me on the 18th hole for the club championship at East Jabip Golf and Country Club. This is one of the best golfers in the world –- actually #1 in the world until Koepka jumped past him on Sunday afternoon -- three putting from 12 feet. “Choke” is neither an unkind nor unfair label for that and Johnson’s other mishaps under pressure. Golf is undeniably a mental game; Johnson has immense golfing ability, and a well-earned US Open victory at Oakmont, but something almost always seems to be going on north of that neck of his at the moments of greatest pressure, and it is not pretty.
        “Baseball,” as former Major League Baseball Commissioner Bart Giamatti once wrote, “will break your heart.” Golf will break your spirit if you let it. Brooks Koepka has demonstrated he does not let it. Dustin Johnson is another story.