There are people who have money and people who are rich.
-- Coco Chanel
There is nothing like finding a true bargain to quicken the pulse and puff out the chest. For those looking for property in most golf communities these days, there is plenty of potential for chest puffing and thumping. Developers and in-over-their-heads private owners are doing all they can to turn their dirt into quick liquid assets, and the quickest way is to lower their asking prices. Someday the textbook definition of “buyer’s market” may include a reference to 2010. In chasing bargains, however, some buyers of golf community property lose sight of the fact that a more expensive choice could be the better one.
Let me explain with an invented example. Jim and Nancy decide that the Pollyanna Springs golf community is the place they
Pollyanna Springs requires that property owners become members at their well-regarded private country club. Since Jim and Nancy both play golf, club membership is not an issue, although they aren’t crazy about the $50,000 initiation fee (non-equity). After
Is the resale lot worth the extra $50,000? Like so many things, it depends on the point of view, or more accurately the length of the view. Jim and Nancy, both in their early 50s, intend to make Pollyanna Springs their home until they are ready for an assisted living facility. With continued good health, they can look forward to 25 years in the home. Assuming an annual appreciation rate of 5% on both properties, the more expensive lot will surpass the value of the less expensive one by more than $50,000 in 14.4 years. If homes in Pollyanna Springs appreciate by an average of 6%, the more expensive lot will be worth $50,000 more than the developer’s lot in 12 years; at 8%, the crossing point is just 9 years. (Of course, appreciation rates of less than 5% will make the time period longer.)
Like many baby boomers, their Pollyanna Springs home will likely be the last that Jim and Nancy purchase. In contemplating which lot to buy, the couple should put a price on happiness.
