In those halcyon days of yesteryear -– the early 2000s -- when the value of golf community homes seemed to jump 15% annually, it made some sense to buy a condo, use it two weeks a year for the family vacation, and rent it out the rest of the year. The net rental income rarely paid for all

the carrying costs, especially if you took on a mortgage, but those who purchased in the most popular resort locations with the most short-term renters came close. Of course, the strongest lure during a roaring real estate market was the condo’s price appreciation potential.  The roaring ended with a thud in 2008, but now we are at a nexus of low interest mortgages, low condo prices and the strong possibility that values are poised to rise once again. And buy-to-rent scenarios may, for the coming year, make sense in those resorts best positioned to start re-attracting vacationers.

        Pawleys Plantation, a top golf community in Pawleys Island, SC, is one such possibility. Although my wife and I already own a couple of properties in the community and surely do not need another, I am sorely tempted by a two-bedroom, two-bath end-unit “golf villa” that has come on the market for just $110,000. A bit of simple math shows how good a deal this could be.

        First, the price: Comparable units along the 10^th fairway of the Jack Nicklaus Signature golf course at Pawleys Plantation are listed at $125,000 and above. Just before the recession, these units sold for around $200,000. This latest offering is a “short sale,” which means that the owner owes more on the unit than its market value, and the bank holding the note will have the last say on the sale. A buyer able to pay all cash will have a leg up.

        Second: It is possible to cover the carrying costs by renting out this unit to vacationing golfers and families. We estimate the total of taxes, homeowner association fees and other incidental costs will range up to about $600 per month, or $7,200 per year. Condo units of this type rent for an average $800 per week, more during the peak spring and fall seasons, slightly lower during the summer seasons, and lowest during the winter

(even though the golf course is open and playable year round). There is a catch, however, for those absentee landlords who will need to hire a local agency to manage the renting of the unit; these companies will charge anywhere from 15% to 50% of the rental income, depending on the level of services they offer. Assuming 15 weeks of rentals during the year, or $12,000 in gross income, and a management fee of 35%, or $4,200, the net rental income before taxes would be $7,800. That essentially covers the carrying costs, with a little to spare (about the equivalent of a short-term CD at your local bank). Please note that we have not calculated savings from mortgage interest deductions because who knows what the politicians in Washington will do during their "fiscal cliff" negotiations. Suffice to say that if the deductions remain for both interest and property taxes, the calculation is advantageous.

Most of the back nine at Pawleys Plantation plays beside and over the marsh that separates the golf community from the homes on the Atlantic Ocean, seen in the distance here beyond the 16th green.

 

        For those wondering if 15 weeks of rental income is a realistic number, we point to a VRBO (Vacation Rental by Owner) listing in Pawleys Plantation in the same group of units as the one for sale. Already, through June, the owner has rented the unit for more than 10 weeks, with the fairly busy summer and very busy fall seasons not yet booked. (The rate for the unit is $700 weekly, with an additional $90 cleaning fee at the end.)

        Third: The golf course at Pawleys Plantation is one of the best on the Grand Strand of Myrtle Beach, challenging and beautiful all in one, especially the back nine, which plays along and, at one point over, marshland. As you face the par 3 13^th hole, “the shortest par 5” in South Carolina, you look out across the marsh to Pawleys Island and the Atlantic Ocean about a half mile away, only a five-minute drive to its wonderful public beach. You may not be able to put a monetary value on it, but a couple of weeks a year, you can play hero to your golfing buddies or your family. That’s certainly worth something.

        Fourth: The ultimate payoff, assuming the overall economy continues to improve and the leisure residential market along with it, is that your condo will appreciate in price. Precise price forecasts are impossible, but we know what condos like this one sold for before the economy went squishy. If your condo recovers only half its former peak value, and you were to sell it in five years for, say, $150,000, don’t pull a muscle patting yourself on the back.

        Cathy Bergeron of The Litchfield Company in Pawleys Island has listed this property and others in Pawleys Plantation at our GolfHomesListed web site. Feel free to browse and register or sign in there for more details on the golf villa or any other golf homes for sale in the community.

        Golf is a tough enough game without unwanted distractions. When we play an unfamiliar golf course, we especially appreciate signs at the tee boxes that show the layouts of the holes. Better yet, we prefer yardage books. Anything that takes the guesswork out of shot-making and frees us, mentally, to concentrate on our strokes, will enhance the experience of a round on an untested golf course.

        Sometimes, though, as we found occasionally in 2012, golf courses can provide too much of a good thing in the way of guidance. And for your peace of mind and your golf game, that can be a bad sign.

The kids are all right…if you don’t slice

        We played the Linkside course at Pebble Creek Country Club in Greenville, SC, with Lyn Young, who owns the club’s two 18-hole layouts -– one private (Linkside) and one open to the public (Creekside). A sign at the tee box on the par 4 dogleg right 9^th hole issues an intimidating warning to those trying to cut the dogleg on the 390-yard hole: “Do Not Cut Corner…Children Are At Risk…You Are Responsible.” The sign scared me into aiming left and then, of course, I hooked the shot, leaving a long approach shot to the green. As we advanced down the fairway, I noted that the backyard of the house at the elbow of the dogleg was covered in netting anyway. And, on this day and at this time, there was no one in the backyard. Shoulda, woulda, coulda.

Where eagles cannot soar

        Arriving early in the afternoon for a four-day visit to Greenville, SC, I stopped for a warm-up nine holes at the Creek Country Club, just outside of town. The layout at the public Creek golf course was pretty straightforward… until I reached the tee box on the short par 4 6^th hole and was greeted with a sign that, in emphatic language, forbade me to attempt to reach the green that was just 275 yards from the tee -– the last 75 yards almost straight down a steep hill. I followed orders well, laying up 100 yards short of the green, almost to the end of the fairway and just 15 yards short of the steep drop down to the green. This was that rarest of par 4s for a medium length hitter like me -– a reachable green -- and I was tempted to go back to the tee and pull out the driver for a go at the green and a possible eagle. But I settled for a half wedge down the hill and a routine two putts for par.

Degree of difficulty = 7

        Sometimes it is better off not knowing what lies on the other side of a fairway hill. But when a golf course announces at the tee box that such a hole presents disaster potential, you don’t take your club back with a whole lot of confidence. At the par 4 4th hole at Hickory Knob State Park golf course near McCormick, SC, the fairway disappears about 190 yards from the tee. The tee box greets you with a sign that is half-demand, half-warning about the hole’s degree of difficulty: “Please limit your play on this hole to seven strokes.” This caused our foursome, before we teed off, to drive up to the edge of the fairway where we immediately understood the Hobson’s choice off the tee box; lay-up with an iron and leave a long approach shot over muck and mire (a dried out lake bed) or hit driver and take your chances with a shorter approach off a downhill lie from gnarly rough. Either way, a triple bogey is in play, but some things are better left unsaid at the tee box.

Announcing the Blindingly Obvious

        Some reminders before the golf swing are helpful. “Take it back slow and straight.” “Head down and follow through.” Even “Avoid that bunker on the right.” However, we found the tee sign at the finishing hole at Imperial Golf Club in Naples, FL, to be helpful to a fault: “Please Be Aware of Homes to the Left.” You can hide bunkers, streams, ponds and even the occasional green from the player’s view. But homes on a golf course are pretty tough to conceal, especially from members of a private golf club like Imperial.

A Sign of Respect

        Green Valley Country Club in Greenville, SC, features a stone marker beside most of its tee boxes. Many are dedicated in memoriam to former members, paid for by their former fellow members or family members. There is even one, at the 18^th tee box, for George Cobb, Sr., who originally designed Green Valley in 1955. But the stone marker at the 16^th (below) is targeted to all members and guests who pass that way. Amen.